Products October 1, 2013

Penbridge Database Adds United of Omaha

October 1, 2013 (PLANSPONSOR.com) – United of Omaha Life Insurance Company, a subsidiary of Mutual of Omaha Insurance Company, joined the Penbridge Advisors Pension Risk Transfer (PRT) Database.
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The agreement provides United of Omaha with a new means of communicating with database users, who in turn now have access to Omaha information and PRT products. The database also provides members and users with updated lists of PRT providers, inventory of available products, contract parameters, financial due diligence information, screening tools, research, pricing data, and various other features. 

Penbridge first launched its operations (see “New Firm Offers Pension Risk Transfer Advice“)—and the database—earlier this year, and has since developed business with other insurance providers such as Prudential, Pacific Life, American General, Transamerica and MetLife.

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The growth in business comes at a time of ongoing change and ambiguity in the PRT space. A recent white paper published by Penbridge (see “Preparing Assets for Pension Risk Transfer“) found that little consensus exists among the U.S.’s top pension fund advisers as to how assets should be valued during pension-related risk transfers. No method of valuation received the support of more than a third of survey participants.   

United of Omaha’s participation in the database will add to the existing information available to the growing number of corporate pension plans considering annuitizing all or part of their pension liabilities, Steve Keating, Penbridge co-founder and principal, said.

Access to the PRT database is available at www.penbridgeadvisors.com/join.

Benefits October 1, 2013

Does an Older Work Force Mean Less Productivity?

October 2, 2013 (PLANSPONSOR.com) – An increasing portion of the work force is older than age 60, but this is not negatively affecting workforce productivity.
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According to “The Impact of Population Aging and Delayed Retirement on Workforce Productivity” from the Center for Retirement Research at Boston College, the two main reasons for the increase in older workers is the size of the Baby Boom generation and labor force participation rates among those ages 60 to 74 have increased.

Gary Burtless, author of the paper, said, “There are enormous differences between the labor force participation rates of older Americans depending on their level of schooling. Research shows that people with limited education have low employment rates in old age, while those with college and advanced degrees tend to remain in the work force longer.”

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If less productive workers selectively exit the work force at younger ages, he said, the average productivity of the older workers who remain may compare favorably to the average productivity of the young. A surge in the percentage of the potential work force that is old may simply increase the proportion of the workforce that consists of comparatively skilled older workers.

“If worker productivity has been harmed by the surge of older workers into the labor force, the fact is not evident in the earnings statistics for the elderly themselves,” said Burtless.

He explained that using hourly wages as a standard benchmark for measuring individual worker productivity, research showed workers between ages 60 and 74 are currently paid more than an average worker who is between 25 and 59. The hourly pay premium for older men was about 20% in 2010 and about 10% for women.

Burtless added that while other benchmarks show a somewhat less favorable picture, all show considerable improvement in the relative position of aged workers compared with the nonaged. None of the indicators of male productivity, he said, suggest older male workers are less productive than average workers who are between 25 and 59.

“The expectation that older workers will reduce average productivity may be fueled by the perception that the aged are less healthy, less educated, less up-to-date in their knowledge, and more fragile than the young,” said Burtless. While these images contain some grains of truth, he said, they do not necessarily describe the people who choose or who are permitted to remain in paid employment at older ages.

The full paper, as well as an executive summary, can be found here.

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