Hazel Bateman

UNSW Sydney | UNSW · School of Risk & Actuarial Studies

Background The role of social environment, i.e., the aggregate effect of social determinants of health (SDOHs), in determining dementia is unclear. Methods We developed a novel polysocial risk score for dementia based on 19 SDOH among 5,199 participants in the Health and Retirement Study, US, to measure the social environmental risk. We used a sur...

Physicians’ “know-do gaps” are a key factor driving the poor quality of healthcare in many developing countries, but there is little guidance on how to address these gaps. We designed a standardised patient audit study in China to evaluate the impact of physician over-service on their investment in learning and disease management decisions. We find...

Objective: To investigate the contribution of early-life factors on intrinsic capacity of Chinese adults older than 45 years. Methods: We used data on 21 783 participants from waves 1 (2011) and 2 (2013) of the China Health and Retirement Longitudinal Study (CHARLS), who also participated in the 2014 CHARLS Life History Survey to calculate a pre...

The family home is the most important asset on household balance sheets, aside from human capital. Choosing a suitable mortgage is therefore critical to financial well-being but households often make costly mistakes. We collect data in an online survey to test borrowers’ comfort with, and understanding of, mortgage debt. We analyze the impact of fi...

Many people have unsuitable life insurance cover or no cover at all. In this study, we survey consumers about their readiness to purchase life insurance. Consumers rate their own “decision state” from “pre‐aware” of life insurance to “aware,” “interested” or “capable” of deciding to purchase. We also collect data on factors associated with progress...

Overuse of health care is a potential factor in explaining the rapid increase in health care expenditure in many countries; however, it is difficult to measure overuse. This study employed the novel method of using unannounced standardised patients (SPs) to identify overuse, document its patterns and quantify its financial impact on patients in pri...

Australian regulations strictly limit early withdrawals from retirement plan accounts. However, in 2020, the Government made otherwise illiquid plan balances temporarily liquid, offering emergency relief during the pandemic. The COVID-19 Early Release Scheme allowed participants in financial hardship easy access to up to $A20,000 of savings over tw...

Objectives To measure the disease burden of ageing based on age-related diseases (ARDs), the sex and regional disparities and the impact of health resources allocation on the burden in China. Design A national comparative study based on Global Burden of Diseases Study estimates and China’s routine official statistics. Setting and participants Thi...

Using an online experimental survey, we test how Fact Sheets presenting standardised information on retirement income products – Average Annual Income, an Income security Product Rating, Potential Income Shape, Access to Capital, and Death Benefits – influence product knowledge, perceptions and choices from a menu of annuity, phased withdrawal and...

We study optimal retirement portfolio choice and welfare when individuals can choose between stocks, bonds, and either a life-contingent (life) annuity or a health-contingent (life care) annuity. We develop a life-cycle model of annuitization, consumption, and investment decisions for a single retired individual who faces stochastic capital market...

We investigate the importance of alternative motives for saving and spending patterns after retirement in the Netherlands and Australia. Using an online experimental survey, we elicit the impact on advised spending patterns and underlying saving motives of alternative retirement drawdown designs, ranging from complete flexibility in Australia to fu...

The effect of regulatory standards regarding the presentation of investment products on financial behavior is poorly understood. In two incentivized online experiments (N = 2,221) we examine the impact of information-based and tool-based guidance on the selection of retirement plan investment funds. Participants chose between funds that followed id...

Background Maintaining and optimising intrinsic capacity (IC) across a person’s life course is a core component of the World Health Organization’s model of healthy ageing. However, the contribution of cumulative health inequalities over time to subtle changes in IC in late life is not well understood. Methods We included 21,783 participants aged 4...

Objective Healthcare expenditures have increased very fast in many countries. Overuse of health care is a potential factor explaining the rapid increase. However, overuse, defined as ‘the provision of health care service when its likely risk of harm exceeds its potential benefit’ is difficult to measure ¹. This study employs a novel method using un...

Aging societies need efficient and flexible systems to finance care for the frail elderly. We study pre‐retirees' demand for flexible insurance that can finance informal long‐term care by paying income in poor health states instead of reimbursing formal care costs. We collect and analyze stated preferences for this long‐term care income product, an...

This paper explores new mechanisms to fund long-term care using housing wealth. Using data from an online experimental survey fielded to a sample of 1,200 Chinese homeowners aged 45-64, we assess the potential demand for new financial products that allow individuals to access their housing wealth to buy long-term care insurance. We find that access...

We fielded an online survey in the Netherlands and Australia to explore the influence of an implied endorsement nudge, conveyed by a government regulated drawdown from pension wealth, on spending patterns in retirement. The implied endorsement nudge was effective. It influenced the preferred retirement spending patterns of around 30% of survey part...

Standardized information disclosures aim to help people compare complex financial products and make better choices. We investigate the extent to which information shown in a regulator-mandated dashboard helps retirement savers choose between alternative pension plans. We conduct incentivized experiments that collect participants’ repeated choices b...

Reverse mortgages provide an alternative source of retirement funding by allowing older homeowners to borrow against their home. However, a recent pilot program of reserve mortgage products in several large Chinese cities saw almost no take up. To ascertain the demand for reverse mortgages in China, we conduct and analyze two online surveys that fo...

People who engage with their retirement savings are more likely to opt out of unsuitable defaults. We use cluster analysis of matched survey and administrative data to identify groups of pension plan members that are alike in their attitudes towards retirement saving. We find that engaged and disengaged members separate into groups based on interes...

This paper explores whether implied endorsement can serve as an explanation for the stickiness of retirement drawdown defaults. Using an experimental survey fielded in both the Netherlands and Australia, we analyse the extent to which individuals stick to default drawdowns and whether they perceive government prescribed minimum withdrawals from the...

This paper explores whether implied endorsement can serve as an explanation for the stickiness of retirement drawdown defaults. Using an experimental survey fielded in both the Netherlands and Australia, we analyse the extent to which individuals stick to default drawdowns and whether they perceive government prescribed minimum withdrawals from the...

Providing a population with some form of income security for the later stages of their lifespan has been a part of the political agenda in developed economies for more than a century. This chapter describes and assesses Australian retirement income policy. As in other countries, policy has changed greatly in past decades and is expected to continue...

Over the past few decades, China’s pension system has evolved from separate schemes almost exclusively for urban and public sector workers to one with broad national coverage. In a similar time-frame, successive Australian governments have introduced reforms to Australia’s retirement income arrangements in an attempt to increase retirement savings...

The notion of whether people focus on the past, present or future, and how it shapes their behavior is known as Time Perspective. Fundamental to the work of two of its earliest proponents, Zimbardo and Boyd (2008), was the concept of balanced time perspective and its relationship to wellness. A person with balanced time perspective can be expected...

We explore how individuals assess the quality of financial advice they receive and how they form judgments about advisers. Using an incentivized discrete choice experiment, we show that first impressions matter: consumers more often follow advisers who dispense good advice before bad. We demonstrate how clients’ opinions of adviser quality can be m...

We examine the behavior of members of an industry-wide pension fund to assess both the prevalence of defaults and their impact on retirement savings. Our empirical investigations show that preferences, demographic characteristics and labor mobility matter greatly when it comes to the extent of active plan choice (or high defaulting) and overall lev...

Using proprietary Australian Taxation Office (ATO) data, this study examines audit pricing, service bundling and independence issues in the self-managed superannuation fund (SMSF) sector, the fastest growing and largest segment of the Australian $2 trillion retirement savings industry. We consider the impact of partner-level scale effects for a lar...

We investigate the role of individual capability and effort in the management of retirement ruin. In an experimental setting, we analyze how 854 defined contribution (DC) plan members reallocated wealth between a lifetime annuity and a phased withdrawal account when we increased the risk of exhausting the phased withdrawal account before the end of...

Retirement income stream products are difficult for consumers to choose because of their high perceived risk, irreversibility, high expenditure, little opportunity for social learning and distant consequences. Prior literature is unclear about consumers’ use of heuristics in decumulation decisions or whether sociodemographics can help identify vuln...

Short, standardized financial product disclosures should make comparisons easier, support better choices and reduce welfare losses. Using incentivized experiments, we investigate how and when prescribed fee and return information in standardized disclosures prompt efficient switches between retirement plans. Our choice data suggests members rely ac...

The funds, entities, and regulators involved in the Australian superannuation industry together comprise a system that is complex and dynamic. The differentiation between roles and the distribution of responsibility amongst entities provides the system with a measure of resilience against the local failure of any one of the entities. However, the i...

Efficient investment of personal savings depends on clear risk disclosures. We study the propensity of individuals to violate some implications of expected utility under alternative “mass-market” descriptions of investment risk, using a discrete choice experiment. We found violations in around 25% of choices, and substantial variation in rates of v...

We implement a two-country online choice experiment on around 2000 respondents per country, first, to investigate the formation of subjective survival expectations; and second, to evaluate the relation between subjective survival expectations and attitudes to pension regulations. Each respondent provided subjective survival probabilities to a range...

Faced with an ageing population, governments are shifting the financial responsibility for retirement to their citizens. Employers, too, are shifting this responsibility to employees, with most now offering defined-contribution retirement plans. Yet it is widely acknowledged that consumers do not engage with retirement savings in ways that seem com...

Using a sample of 256 pension funds from Australia, Canada, the United States and Europe for the period 2004 to 2012, we use data envelopment, cluster and multivariate analysis to compare performance. We find high efficiency scores for many smaller corporate funds and lower efficiency scores for larger Australian industry and retail funds. Among US...

This paper focuses on the performance effect of business model reconfiguration in incumbent firms in an environment where IP protection is not an option. We utilize a direct measure of business model reconfiguration to test the performance effect. Furthermore, we look at the influence of contingency factors on this relationship. Business model reco...

We explore how individuals assess the quality of financial advice they are given and how they form judgments about the trustworthiness and expertise of their advisers. Using an incentivized discrete choice experiment, we demonstrate how clients’ opinions of adviser quality can be manipulated over time by using a simple and easily replicated confirm...

Low levels of non-default decision-making among superannuation members in Australia are assumed to be evidence of a lack of interest and capability. Using member records and survey data from a large Australian superannuation fund, we test the relationship between attitudes towards retirement savings and observable levels of non-default activities (...

This paper examines the default behaviour of the members of an industry-wide pension fund to assess both the prevalence of defaults and their impact on retirement accumulation. Preliminary empirical investigations indicate that preferences, demographic characteristics, and labor mobility can go a long way towards explaining the low active plan choi...

We develop and simulate a stochastic lifecycle model to investigate optimal annuity purchases at retirement. Retirees can invest in risky assets, purchase fairly priced immediate or deferred lifetime annuities, and are eligible for a targeted safety net pension. We match baseline parameters to current Australian settings and market outcomes. Except...

After declining worldwide since the late 1080s, defined benefits plans will not recover their previous dominance in Australia because they can only be offered by large and stable organisations. Since 1992, Australia has had compulsory superannuation that is mostly privately managed in addition, several policy measures have unduly weakened defined b...

Using proprietary Australian Tax Office (ATO) data, we document the size, asset allocation and expenses for a sample of 209,420 Australian self-managed superannuation funds (SMSFs) for the three years to June 2010. Two recent Government reviews have highlighted a lack of basic knowledge of the costs associated with running an SMSF. Our study aims t...

Using proprietary data, this study examines auditor industry specialisation, professional brand effects and non-audit services (NAS) in the self-managed superannuation fund (SMSF) sector, the fastest growing and largest segment of the Australian $1.75 trillion retirement savings industry. We consider the impact of industry leadership for a large sa...

In November 2014 the Senate disallowed the Corporations Amendment (Streamlining of Future of Financial Advice) Bill. Now is an opportune time to stand back and draw out implications for Australia from how financial advice is regulated in the leading common law countries. We also draw out implications from the debates in those countries about the re...

We investigate the role of capability and effort in the management of retirement ruin. In an experimental setting, we analyze how 854 DC plan members reallocated wealth between a lifetime annuity and a phased withdrawal account when we increased the risk of exhausting the phased withdrawal account before the end of life. We find that more numerate...

The funds, entities and regulators involved in the Australian superannuation industry together comprise a system that is complex and dynamic. The differentiation between roles and the distribution of responsibility offers the system as a whole resilience against local failure. However the interconnections that bind and constitute the system have th...

This study explores antecedents to business model innovation and empirically tests theoretical findings. We relate firm characteristics to the propensity to innovate the business model. In order to test our hypotheses, we develop a quantitative model for business model innovation, utilizing the NK-model approach. We developed and analysed a unique...

This research studies whether individuals make choices consistent with expected utility maximization in allocating wealth between a lifetime annuity and a phased withdrawal account at retirement. The paper describes the construction and administration of a discrete choice experiment to 854 respondents approaching retirement. The experiment finds ov...

We report the results of two laboratory experiments that study how university student and staff participants chose retirement savings investment options using ‘user-friendly’ information prescribed by regulators. We demonstrate that choices of more than 20% of participants cannot be predicted using any of the prescribed information items but that 3...

Choices of retirement income stream products pose the usual challenges associated with credence goods. Moreover, high perceived (and actual) risk, irreversibility of most purchases, high expenditure, little opportunity for social learning and distant consequences make these choices even more intimidating to consumers. Nevertheless, governments worl...

China is experiencing rapid ageing as a result of declines in fertility combined with significant increases in longevity. According to current UN projections, more than a quarter of the population will be over 65 years old by 2050, and the old-age dependency ratio is expected to triple to almost 40 per cent. In recent years, the Chinese government...

We assess alternative presentations of investment risk using a discrete choice experiment which asked subjects to rank three investment portfolios for retirement savings across nine risk presentation formats and four underlying risk levels. Using Prospective Theory utility specifications we estimate individual-specific parameters for risk preferenc...

We implement a customized survey to a representative sample of 1,024 Australians to examine the relationship between financial literacy and retirement planning. Overall we find aggregate levels of financial literacy similar to comparable countries with the young, least educated, unemployed and those not in the labor force most at risk. However, unl...

This paper presents new evidence from a national survey of non-retired individuals with superannuation accounts between the ages of 25 and 65. Fielded in June of 2012, the survey responses suggest that Australians often are ill informed about many important features of the superannuation system. This lack of retirement system knowledge is consisten...

Existing research shows that adjustment to retirement is correlated with pre-retirement planning. This study presents new insights into the retirement preparedness of Australians at the later stages of working life. Recent surveys of those approaching and entering retirement show that the extent of planning around exiting the workforce, financial m...

This paper summarises and appraises federal legislation passed in 2012 under the headings of The Future of Financial Advice (FoFA) and MySuper. FoFA reforms, which follow a review of the industry by a Joint Parliamentary Committee, aim to improve financial advice and seek to ban conflicted advice. MySuper reforms, based on recommendations made by t...

Two timely reviews of Australia's transfer and tax systems were commissioned by the incoming government in 2008, although the GST, tax exemption of superannuation payments to people aged over 60, and pre-announced personal income tax cuts were placed outside the scope of inquiry. Most of the recommendations of the Harmer Pension Review have been im...

This paper documents developments in public sector pensions in Australia, and reports estimated unfunded liabilities associated with benefits promised to public sector employees. Australia’s experience with public sector pensions is unusual – currently, the defense forces and the judiciary apart, all new entrants to public sector schemes confront d...

We study the financial competence of Australian retirement savers using self-assessed and quantified measures. Responses to numeracy and basic and sophisticated financial literacy questions show large variation and compare poorly with international surveys. We graph the relationships between financial competence index scores and a wide range of dem...

Here we test the usefulness of a discrete choice experiment (DCE) for identifying individuals who consistently exhibit concave utility over returns to wealth, despite variations in the framing of risk. At the same time, we test the relative strengths of nine standard descriptions of investment risk. We ask a sample of 1200 retirement savings accoun...

We investigate risk presentations in retirement savings decisions using a discrete choice experiment where subjects choose between a bank account, a growth account and a 50:50 account. Using nine standard formats for investment risk, we analyze responses to risk per se and to format changes. Switching between formats changes individuals' investment...

This research studies the propensity of individuals to violate implications of expected utility maximization in allocating retirement savings within a compulsory defined contribution retirement plan. The paper develops the implications and describes the construction and administration of a discrete choice experiment to almost 1200 members of Austra...

Henry makes recommendations for improving the progressivity of taxes on super and the adequacy of retirement incomes, but does not deal with problems of moral hazard and adverse selection in the super system. For example, the recommended 7.5 per cent tax on 'the earnings from assets supporting superannuation income streams' could interact with the...

While retirement income products have become more important in Australia in recent years, the growth in these has been predominantly in phased withdrawal products which offer no longevity insurance. The life annuity market has virtually disappeared, exposing Australians to much greater uncertainty about their well-being in later life than is necess...

We conducted a choice experiment to investigate whether retirement savers follow simple portfolio theory when choosing investments. We modeled experimental survey data on 693 participants using a scale-adjusted version of the latent class choice model. Results show that underlying variability in response was explained by age and “risk profile” scor...

We conduct a choice experiment to investigate the impact of the financial crisis of 2008 on retirement saver investment choice and risk aversion. Analysis of estimated individual risk parameters shows a small increase in mean risk aversion between the relatively tranquil period of early 2007 and the crisis conditions of late 2008. Investment prefer...

We conducted a choice experiment to investigate whether retirement savers follow simple portfolio theory when choosing investments. We modeled experimental survey data on 693 participants using a scale-adjusted version of the latent class choice model. Results show that underlying variability in response was explained by age and “risk profile” scor...

The Henry Review acknowledges the adverse-selection and supply-side problems stunting the Australian market for longevity insurance. We propose a resolution that would give workers a choice between either or both of two kinds of super account, one taxed under the current arrangements (or those proposed in the Henry Review) and the other only in ret...

This introduction to AAR's Forum on superannuation surveys the increased choice and flexibility available to retirement savers, with particular emphasis on the proposals announced in the May 2006 commonwealth budget. In an environment of greater reliance on defined-contribution superannuation arrangements, increased member choice means an increased...

The new Simplified Superannuation regulations for Australian superannuation provide tax concessions to retirement income streams which comply with legislated minimum drawdown rules. We evaluate these new drawdown rules against four alternatives, including three formula-based 'rules of thumb' used by financial planners. We find that the new regulati...

We investigate delegated investment management in private pension accounts using data from Australian accumulation (superannuation) funds. In Australian non-profit pension funds, trustees choose investment managers on behalf of members. We find that funds with many delegated managers have higher risk-adjusted returns than those with few. However fu...

We explain and discuss the Simplified Superannuation measures introduced in 2006 and 2007. These measures may well live up to their name, at least after the five-year transition. Their estimated cost over the next four years is a modest $7.2 billion. Yet long term problems remain. Accordingly, we propose a further round of reforms. The aims are to...

The past few decades have witnessed a global move towards private provision for retirement through individual defined contribution pensions at the expense of publicly provided and employer-sponsored defined benefit pensions. As a consequence, workers and retirees are becoming increasingly exposed to uncertainties in financial, labour and economic m...

Old Age Income Support in the 21st Century: An International Perspective on Pension Systems and Reform. By Robert Holzmann and Richard Hinz. The World Bank, 2005, ISBN 0-8213-6040-X, 232 pages, Price $25.00. - - Volume 5 Issue 1 - HAZEL BATEMAN

In Australia, pension fund trustees choose investment managers on behalf of members. We investigate the structure and performance of delegated investment choice in the Australian retirement incomes sector. We find that funds where trustees employ many managers generate higher risk-adjusted returns over the 3 year sample than those with few, but fun...

Abstract Over the past 100 years, retirement income provision in Australia has evolved into a multi-pillar arrangement comprising the Age Pension, the Superannuation Guarantee,and ,voluntary ,retirement ,saving. With fully funded ,superannuation and,a public,pension,that is both,less generous,than many,other countries,and means tested, Australia’s...