scholarly journals Measuring intra-generational redistribution in PAYG pension schemes

Public Choice ◽  
2021 ◽  
Author(s):  
Jonas Klos ◽  
Tim Krieger ◽  
Sven Stöwhase
Keyword(s):  
Pension System ◽  
Pension Scheme ◽  
Global Measure ◽  
Pension Reforms ◽  
Pension Schemes ◽  
Recent Reform ◽  
Index Value ◽  
Pension Benefits ◽  
The Ideal

AbstractVoters in ageing societies expect pension reforms to be both inter-generationally and intra-generationally fair. In this paper, we propose a global measure of intra-generational redistribution in pay-as-you-go pension schemes as a basis for voters’ evaluations of reforms. Our novel index only requires information on contributions by and pension benefits paid to retirees, enabling us to measure intra-generational redistribution isolated from possible inter-generational redistribution. We rely on the contribution records of approximately 100,000 Germans, who progressed into retirement in 2007–2015, to measure the level of intra-generational redistribution in the German statutory pension scheme (GRV). A recent reform of the childcare benefit provision, which became effective in 2014, confirms the predictions of our index. The reform introduced additional benefits for a substantial subgroup of German mothers, owing to which the index value for women, but not for men, jumps up. Our findings suggests that GRV fulfills the ideal of a Bismarckian pension system without intra-generational redistribution for men, while women benefit significantly from intra-generational redistribution.

scholarly journals Political Stress and the Sustainability of Funded Pension Schemes: Introduction of a Financial Theory

2021 ◽  
Vol 14 (11) ◽  
pp. 525
Author(s):  
Ishay Wolf
Keyword(s):  
Financial Markets ◽  
Risk Sharing ◽  
Pension System ◽  
Pension Scheme ◽  
Political Pressure ◽  
Financial Position ◽  
Pension Schemes ◽  
Systemic Risks ◽  
High Earning ◽  
Entire Society

This study introduces multiplayer game in the modern pension market. Particularly, this study claims that low earners and high earners have different interests when playing in funded pension market scheme. This differentiating is enabled by avoiding the entire society as a single earning cohort. This study using financial position, demonstrates a socio-economic anomaly in the funded pension system, which is in favor of high-earning cohorts at the expense of low-earning cohorts. This anomaly is realized by a lack of insurance and exposure to financial and systemic risks. Furthermore, the anomaly could lead to a pension re-reform back to an unfunded scheme system, due mostly to political pressure. This study found that a minimum pension guarantee is a rebalance mechanism for this anomaly, which increases the probability of a sustainable pension scheme. Nowadays when countries try to balance between social expenses and awaking financial markets, one may find this theory highly relevant. It is obviously one of the cases where social targets meat financial equilibrium and here they are in the same side. Specifically, it is argued that implementing the guarantee with an intra-generational, risk-sharing mechanism is the most efficient way to reduce the effect of this abnormality.

scholarly journals The transition to NDC in Italy: assessing distributive and financial effects

2021 ◽  
pp. 1-16
Author(s):  
Carlo Mazzaferro
Keyword(s):  
Net Present Value ◽  
Pension System ◽  
Pension Scheme ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Ratio Distribution ◽  
Actuarial Fairness ◽  
Notional Defined Contribution ◽  
High Level ◽  
Pension Benefits

Abstract Moving from a Defined Benefit (DB) to a Notional Defined Contribution (NDC) pension formula creates significant re-distributive effects. We estimate the amount and the intensity of these effects in the case of the Italian transition to NDC, which began in 1995. Based on administrative data of the main Italian pension scheme (FPLD), we study the evolution of yearly inequality within old-age pension benefits. Furthermore, we study the adequacy and the actuarial fairness of the pension system, by estimating the replacement rates and the Net Present Value Ratio distribution for workers who retired in the period 1996–2019. Our results show that the very generous interpretation of acquired rights determined by the 1995 reform has contributed to maintaining a high level of adequacy and a significant level of intergenerational imbalance. The financial costs of this imbalance are estimated and its extent is significant.

scholarly journals Development of service pension policy in Latvia from 1996 until 2016

2018 ◽  
Vol 51 ◽  
pp. 03011
Author(s):  
Inese Upite ◽  
Feliciana Rajevska
Keyword(s):  
Social Insurance ◽  
Pension System ◽  
Pension Scheme ◽  
Policy Planning ◽  
Pension Policy ◽  
State Budget ◽  
Pension Schemes ◽  
Social Pension ◽  
The Social ◽  
The Government

The government made a decision to terminate the development of the service pension in 1997. However, during 1998–2016 the scope of service pension beneficiaries was extended. Thereby along with the overall social insurance pension system, the social pension scheme has been established and developed for a certain range of people funded by the state budget – the system of the service pension. The aim of the article is to explore the development of the service pension policy during 1996–2016. To accomplish it, in the framework of the study concepts related to the service pensions and the tendencies of reformation of the service pension schemes were studied. The international practice and the experience of several countries were explored, as well as the analysis of legal acts, policy planning papers and statistics was performed. The purpose of the service pension has changed and diversified, moreover, the issues regarding the service pension coverage are promoted by a group of politicians, escaping a wider discussion in public and even in the government.

scholarly journals 8.8. PECULIARITIES OF BUILDING PENSION SYSTEMS IN DEVELOPING COUNTRIES: AN EXAMPLE OF MALAYSIA

2020 ◽  
Author(s):  
С.В. Фрумина
Keyword(s):  
Developing Countries ◽  
Private Sector ◽  
Military Personnel ◽  
Pension System ◽  
Private Pension ◽  
Pension Scheme ◽  
Public Servants ◽  
Pension Systems ◽  
Retirement Accounts ◽  
Pension Schemes

В статье представлена характеристика пенсионной системы Малайзии как одной из развивающихся стран, столкнувшихся с демографическими проблемами. Автор рассматривает устоявшиеся в Малайзии пенсионные схемы: пенсионную схему для государственных служащих, для работников частного сектора, для военнослужащих, для самозанятых граждан и добровольные частные пенсионные схемы. Акцент делается на формировании пенсионных счетов. The article describes the pension system of Malaysia, as one of the developing countries faced with demographic problems. The author considers pension schemes established in Malaysia: a pension scheme for public servants, for private sector employees, for military personnel, for self-employed citizens and voluntary private pension schemes. The emphasis is on the formation of retirement accounts.

Irish Citizens’ Attitudes to Pension Reform and Redistribution

2013 ◽  
Vol 13 (2) ◽  
pp. 203-220 ◽  
Author(s):  
Yosr Abid ◽  
Cathal O'Donoghue
Keyword(s):  
Pension System ◽  
Pension Reform ◽  
Adult Population ◽  
Stated Preferences ◽  
Public Pension ◽  
Pension Scheme ◽  
State Pension ◽  
Pension Benefits ◽  
Citizens Attitudes ◽  
Selection Of

In order to assess people's preferences regarding potential reforms of the Irish state pension system, we surveyed a sample of the Irish adult population about their opinion on a selection of measures and issues related to the redistributive principles and parameters of the pension scheme. Even though very few people are well informed about the pension system, we observe a kind of homogeneity regarding perceptions about the way public pension benefits should be provided. As far as we know, this article represents the first attempt to elicit people's preferences for reforming the state Irish pension system using stated preferences techniques.

Pension reforms in urban China and Hong Kong

2007 ◽  
Vol 27 (2) ◽  
pp. 249-268 ◽  
Author(s):  
WAI KAM YU
Keyword(s):  
Hong Kong ◽  
Urban China ◽  
Pension Scheme ◽  
Welfare Policies ◽  
Pension Reforms ◽  
Pension Schemes ◽  
Path Dependent ◽  
Welfare Reforms ◽  
Dependent Processes ◽  
Economic Globalisation

This study of recent pension reforms in Hong Kong and urban China particularly addressed three questions. What are the causes of the pension reforms in these two economies? What are their key features? What difficulties have been faced by the Hong Kong and Beijing governments during their implementation? As well as enhancing our understanding of the pension schemes in these two countries, the paper makes a contribution to the debate on whether government welfare reforms in responses to economic globalisation are converging on one pattern, an ideal mix of pension schemes. This paper shows that both convergent and path-dependent processes explain the forms of the measures introduced by the Hong Kong and Beijing governments. They have responded not only to the challenges brought by economic globalisation but also to the legacy of previous policies. Moreover, the welfare effectiveness of the new schemes has been undermined both by the two governments' non-welfare policies, particularly to promote economic growth, and by the constraints created by the previous welfare measures. The paper also argues that to develop only a non-contributory comprehensive pension scheme is not the solution to the problem of how best to provide old-age income security, but that this welfare goal principle should be more strongly upheld in pensions reforms.

scholarly journals Restructuring of the Disability Pension Scheme Following a Concept of an Integrated Public Social Insurance System in Poland

2020 ◽  
Vol 2 (1) ◽  
pp. 9-17
Author(s):  
Roman Garbiec
Keyword(s):  
Disability Pension ◽  
Social Insurance ◽  
Pension System ◽  
The State ◽  
Pension Scheme ◽  
Social Insurance System ◽  
Insurance System ◽  
The Social ◽  
Polish Government ◽  
Pension Benefits

AbstractThe disability pension system in Poland has operated largely unchanged since the 1970s. A compelling need to reform the system and adjust it to the challenges of the 21st century is an axiom in the Polish social policy. Unfortunately, restructuring of this system has never been, and is not a top priority for the Polish government. Ignoring this problem is a headwind against economic growth in Poland as the state is overburdened with significant social taxes. A need for the state to provide subsidies to cover current expenditures of the Social Insurance Trust Fund (FUS) is a permanent concern of the national economy. This paper highlights legislative errors and omissions in the Polish social insurance system, and the share of the state's budget devoted to financing of this system and benefit payments over the years 1991-2018. In the main part of the article, financial aspects of the operation of the pension system in Poland were presented. At the end of the article, a preliminary concept of a reform of the existing disability pension system was outlined, whose aim is in particular to improve its financial effectiveness and introduce uniform rules for the payment of pension benefits in Poland.

Starting Over in Pensions: The Challenges Facing Central and Eastern Europe1

1997 ◽  
Vol 17 (2) ◽  
pp. 195-222 ◽  
Author(s):  
Robert Holzmann
Keyword(s):  
Eastern Europe ◽  
Transition Economy ◽  
Central And Eastern Europe ◽  
Pension System ◽  
Pension Reform ◽  
Pension Scheme ◽  
Retirement Income ◽  
The European Union ◽  
Pension Schemes ◽  
Open Questions

ABSTRACTAll countries in Central and Eastern Europe require rapid and drastic restructuring of their public pension schemes for macro- and microeconomic reasons. While initial considerations were geared towards streamlining the unfunded scheme, reducing many distortions and making it financially sound, some transition economies initiated reform plans for a move from unfunded to funded retirement income provision. The paper reviews the need for reform and surveys the discussion and current plans before addressing three central open questions: How to structure the first and unfunded tier? How to finance the transition toward the second and funded tier? What are the minimum financial sector requirements before funded provisions can be initiated? The success of the current pension reform efforts in Central Europe will have an important bearing on developments throughout Europe. A failure in one transition economy caused by bad design, unprojected deficits, or insufficient financial market preparation could discredit a funded pension system in the whole region; a successful move towards an unfunded-funded multi-tier pension scheme in Eastern Europe could positively stimulate the discussion of pension reform in the European Union.

The trend of future cost in group life and pension schemes

1952 ◽  
Vol 11 (01) ◽  
pp. 38-42
Author(s):  
W. Eschrich
Keyword(s):  
Pension Scheme ◽  
Future Cost ◽  
Life Assurance ◽  
Individual Employee ◽  
Pension Schemes ◽  
Group Life ◽  
Single Premium ◽  
The Cost ◽  
Pension Benefits ◽  
Deferred Annuity

The volume of group life and pension scheme business transacted by life offices in this country is considerable, and is increasing steadily. A great deal of work is being spent in the preparation of quotations for such schemes. Readers may, therefore, be interested in a method of reducing to a minimum an especially uninteresting part of the work arising in connexion with quotations for schemes in which the cost of pension benefits for future service or of life assurance benefits is calculated on the ‘single-premium’ basis.In these schemes it is customary for the amount of life assurance cover provided during any Scheme Year, and the amount of pension earned in respect of that year, to depend only on the salary of the member and not on his age. The employee normally contributes an amount, also fixed in relation to his salary, to purchase part of the pension by means of a deferred annuity providing a return of premiums without interest in the event of his death. The employer in each year pays the single premium required to purchase the balance of the pension accruing in respect of that year's service (usually by a deferred annuity without return of premiums in the event of the employee's death), and also to purchase the whole of the temporary life assurance granted during that year. The employer's premiums are recalculated each year on the basis of the ages attained in that year and thus for any individual employee the cost to the employer increases from year to year. Considering the scheme as a whole, this rise is partly or wholly compensated by deaths, withdrawals and retirements, and it may be quite reasonable to expect that the cost in the future will only rise by a small amount, or even decline.

Pension reform in france as a balance between adequacy and stability

2021 ◽  
Vol 72 (5) ◽  
pp. 95-102
Author(s):  
N. Zelenko ◽  
V. Zelenko
Keyword(s):  
Life Expectancy ◽  
Financial Stability ◽  
Pension System ◽  
Pension Scheme ◽  
Occupational Pension ◽  
Defined Benefit ◽  
Member States ◽  
Eu Member States ◽  
The Government ◽  
Pension Benefits

In this paper the authors analyze the main aspects and problems of reforming the French pension system. Most EU member states have been forced to review their system due to the coronavirus crisis, at least to make temporary adjustments. Given European aging population, declining birth rates and increased life expectancy, the associated increase in the age dependency ratio is creating tensions for underfunded defined benefit pension systems. This implicit pension debt has important macroeconomic implications. In France, the structure of the pension system provides for the existence of solidarity component, occupational pension schemes, as well as personal (which are not popular in this country). Sometimes there are significant differences in pension benefits between public and private sector workers with the same earnings, although this difference is much lower than in many other EU member states. Starting from July 1, 2017, no new pension reforms have been implemented in France, as the project proposed by the government and President Macron has received significant opposition from both trade unions and a large part of the population, as the creation of the so-called “Universal pension scheme” provides significant reduction in the rights of future retirees. In general, the choice of restrictive rules that reflect trends in wages, employment and life expectancy is critical for the proper updated system management. Preservation of the French pension system in the near future provides the increase in retirement age or extension of insurance to receive full pension benefits. The results of scientific research indicate the need to apply the adjusted strategy for further reforms, compared to their original versions. The reform proposed by the government and the president is aimed mostly at achieving long-term financial stability of the pension system. As for the adequacy of pension benefits, for some categories of citizens it can be decreased. Therefore, the reform envisages new configurations between the financial stability of the pension system along with ensuring the adequacy of the pension benefits amount.

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