Private Retirement Plan Liquidity and Minimum Access Age, Digi Mart USA News: A key design issue for private retirement plans is their liquidity before retirement age. Researchers Marc Chan, Cain Polidano, Lan Tong, Ha Vu, Roger Wilkins and Son Nguyen examined how this liquidity is valued.
The authors estimate the effects of an Australian policy reform that reduced private pension liquidity by increasing the minimum access age according to birthdate. Using administrative data and a regression discontinuity design, the study analyzes outcomes around the age cutoffs.
The researchers find small reductions in withdrawals and no employment response. They also find reductions in contributions, which they say point to early access being a valuable source of precautionary liquidity, especially for financially engaged individuals.
Overall, the authors conclude that reductions in contributions largely offset the savings from reduced withdrawals. As a result, increases in the access age have little effect on net private pension savings.
