The role of a longevity insurance for defined contribution pension systems

2021 ◽  
Author(s):  
Solange Berstein ◽  
Marco Morales
Keyword(s):  
Defined Contribution ◽  
Pension Systems ◽  
Longevity Insurance

scholarly journals FINANCIAL PROVISION OF THE PENSION SYSTEM IN THE EUROPEAN COUNTRIES AND UKRAINE UNDER GLOBALIZATION

2012 ◽  
Vol 8 (1) ◽  
pp. 73-80
Author(s):  
Tetiana Ivashchenko
Keyword(s):  
Pension System ◽  
Negative Impact ◽  
Financial Economic ◽  
European Countries ◽  
Pension Insurance ◽  
Pension Systems ◽  
The Social ◽  
System Functioning ◽  
The Impact

The most contradictions arise today over the pension system reforming. Each year the states spent significant resources to finance social and economic needs of the population. The positive effect of the nominal growth of the social and economic guarantees in Ukraine leveled nowadays in terms of financial, economic and political instability. Also the processes of depopulation have a very negative impact on the financial viability of the PAYG pension system. Given this, the research aim was to study and discuss tendencies in financial provision of the pension systems in the European countries and Ukraine under globalization. As a result in the process of research the main features of functioning and providing of the pension insurance systems in European countries and Ukraine were examined; the impact of the depopulation processes on the financial provision of the pension systems was determined; problems, related to introduction of the funded system of pension insurance were analyzed; the role of the minimum pension institute in provision of the effective pension system functioning was disclosed and recommendations in relation to optimization of pension insurance and providing сo-operation under globalization were developed.

scholarly journals The Motherhood Pension Gap in a Defined Contribution Pension Scheme—the Case of Poland

2020 ◽  
Vol 12 (11) ◽  
pp. 4425 ◽  
Author(s):  
Anna Jędrzychowska ◽  
Ilona Kwiecień ◽  
Ewa Poprawska
Keyword(s):  
Gender Gap ◽  
Measurement Model ◽  
Future Research ◽  
Pension Scheme ◽  
Defined Contribution ◽  
Childless Woman ◽  
Second Child ◽  
Pension Systems ◽  
Gap Measurement ◽  
Individual Decisions

A gender gap in pensions has recently been discussed in the context of non-discrimination and the sustainability of pension systems. Such systems in Europe are evolving towards strengthening the role of individual contributions from periods of paid work. Among other factors, the women’s pension gap is affected by interruptions in employment arising from care responsibilities. The purpose of this article is to measure the pension gap associated with having children in defined contribution pension systems. Using financial mathematics, the retirement capital of a childless woman (without breaks in work) was determined and compared with mothers of 1–4 children. The results indicate that the motherhood pension gap is approximately 4.5%–9.5%, 7.5%–15%, 9%–20%, and 12.5%–25% for mothers of 1, 2, 3, and 4 children, respectively. Measuring these individual gaps allows the cost of investing in children to be estimated. Significant for systemic and individual decisions is that the gap size is highest by the first and the second child, however the decision about the third child—relevant to the demography as ensuring the generational replacement—means the whole pension gap could rise to 20%. This could help support a policy of counteracting adverse demographic trends in fertility rates through the building of socially sustainable pensions schemes. In terms of future research, it forms the basis for building a gap measurement model that takes into account various drivers of the gender gap.

Retirement concerns and financial literacy in Brunei

2020 ◽  
Vol 40 (3/4) ◽  
pp. 342-365
Author(s):  
Pg Md Hasnol Alwee Pg Hj Md Salleh ◽  
Roslee Baha
Keyword(s):  
Financial Literacy ◽  
Home Ownership ◽  
Pension Reform ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Content Type ◽  
Financial Advice ◽  
Knowing How ◽  
Retirement Plan

PurposeDespite the inclusion of financial literacy in retirement studies, there are limited studies that look into retirement concerns and how financial literacy plays a role in managing retirement concerns. Understanding retirement concerns prior to retirement is important given how it affects retirement satisfaction. Therefore, this paper aims at assessing the retirement concerns in Brunei and the role of financial literacy in managing those concerns.Design/methodology/approach700 government employees, divided into three groups, were interviewed: Defined Contribution Plan (DCP) employees retiring in the next 10–15 years, DCP employees retiring in 20–30 years' time and Defined Benefit Plan (DBP) employees retiring in the next 10 years. Pearson's chi-square tests and logistic regressions were used to ascertain significant relationships.FindingsThe results indicate the relatively younger DCP group is more likely to be financially literate compared to senior groups however, these respondents are more inclined to focus on private home ownership at this juncture. The findings also indicate the importance of knowing how much to save for retirement towards determining those with an additional retirement plan, and consequently reducing their retirement concerns. The value of financial advice is also significant in determining the amount to save for retirement and in possessing an additional retirement plan.Research limitations/implicationsResults cannot be generalised to the population, as purposive sampling was utilised due to the absence of a population frame.Practical implicationsThe implications of the paper may provide value to policymakers to consider approaches to enhance the quality of financial advice and provide sound knowledge in computing the amount needed for retirement. Understanding the role of financial literacy vis-à-vis retirement concerns may also be useful for neighbouring countries with similar socio-cultural aspects such as Malaysia.Originality/valueGiven the limited research on retirement concerns and financial literacy, this paper is one of the few to emphasise on the importance of knowing how much is needed to save for retirement, in relation to retirement concerns. This may also be useful in other countries/communities with similar retirement context such as those with relatively low retirement planning or with similar retirement schemes. Further, with the 1993 pension reform, there is no known publication on retirement concerns and expectations in Brunei. Left unchecked, it may lead to poverty in old age and/or dependency on welfare institutions and family support.

scholarly journals Approaches to Reforming Pension Systems in the World and Recommendations for Russia

2021 ◽  
Vol 13 (1) ◽  
pp. 125-135
Author(s):  
Kristina V. Shvandar ◽  
◽  
Anastasia A. Anisimova ◽  
Keyword(s):  
Pension System ◽  
Effective Interaction ◽  
Pension Plans ◽  
Population Coverage ◽  
Global Trends ◽  
Pension Systems ◽  
The Common ◽  
The Stability ◽  
Main Components

Global trends in the pension sector show that a funded pension, in addition to a pay-as-you-go component, increases the reliability of pension protection for retired people and improves the stability of the pension system. The article analyzes the main directions of reforms of both distribution and funded components. The common features of the considered pension systems are the presence of several levels and their effective interaction as well as the expansion of the role of accumulative pension systems. Reforms related to increasing the population coverage with accumulative pension plans are among the most common ones in the framework of the analysis. The main directions for improving the Russian funded pension system are highlighted, among which the voluntary payment of contributions and the ability to set the desired amount of contributions are the main components of the proposed changes, based on the analysis of international experience in reforming pension systems.

scholarly journals Are Cash Balance Pension Plans A Viable Retirement Program For Corporate America?

2012 ◽  
Vol 10 (8) ◽  
pp. 451
Author(s):  
John J. Lucas
Keyword(s):  
Pension Plans ◽  
Defined Benefit ◽  
Corporate America ◽  
Defined Contribution ◽  
Cash Balance ◽  
Benefit Plan ◽  
Recent Trends ◽  
Program Option ◽  
Cash Balance Pension Plans

Cash Balance Pension Plans are a defined benefit plan where employees have a hypothetical account that increases annually, as a result of compensation credit as well as interest credit. In essence, cash balance pension plans combine elements of both a traditional defined benefit plan and a defined contribution plan (Lucas, 2007). This paper examines the recent trends and legal ruling regarding cash balance pension plans. The paper also provides an examination of the role of the Pension Protection Act (PPA) of 2006 and its impact on cash balance pension plans. An evaluation will also be presented to determine if cash balance pension plans are a viable retirement program option in corporate America.

Non-DC notional accounts: relaxing the trade-off between fairness and solvency of pay-as-you-go pension systems

2020 ◽  
pp. 1-23
Author(s):  
Sergio Nisticò
Keyword(s):  
Growth Rate ◽  
Employment Growth ◽  
Fine Tuning ◽  
Defined Contribution ◽  
Rates Of Return ◽  
Overlapping Generations Model ◽  
Small Oscillations ◽  
Pension Systems ◽  
Constant Rate ◽  
Individual Accounts

Abstract Existing pay-as-you-go (PAYG) schemes based on notional accounts (NAs) have chosen the defined-contribution (DC) setting that forces the rate of interest credited to all individual accounts to change over time to ensure solvency. On the other hand, volatility of the rate of interest is the source of non-negligible disparities of individual internal rates of return (IRRs) both within and across generations. It is argued that these disparities represent a threat to the political appeal of PAYG DC systems, in particular in the present situation characterized by low growth rates of the contribution base. The paper uses a four-overlapping-generations model to prove that the DC setting is not a necessary ingredient of NAs and that their political appeal could be enhanced by extending their use to non-DC pension systems. In fact, redistributions can be avoided by crediting all individual accounts with a constant rate of interest while ensuring financial solvency by fine-tuning of the contribution rate to make the system's revenues grow at the same (constant) rate credited to all accounts. The proof requires constancy of the employment growth rate but not of average earnings. Changes in the employment growth rate produce small oscillations around perfect balance between contribution revenue and pension expenditure manageable with a small buffer fund.

Strengthening Market Principles in Welfare Institutions: How Hybrid Pension Systems Impact on Social-risk Spreading

2013 ◽  
Vol 42 (4) ◽  
pp. 665-683 ◽  
Author(s):  
PATRICIA FRERICKS
Keyword(s):  
Old Age ◽  
Social Protection ◽  
Pension System ◽  
Social Risk ◽  
Target Level ◽  
Pension Systems ◽  
The Past ◽  
Welfare Institutions ◽  
Risk Spreading

AbstractIn the past two decades, the question of how pension systems should be designed to offer ‘adequate and sustainable pensions for all’ has been raised. As a result, European pension systems, in which market principles in general have played a marginal or even negligible role in the past, were redesigned, with market-based pensions becoming part of the pension calculation norm, i.e. the institutionalised and nationally defined target level for old-age protection. However, since the hybrid pension systems are institutionalised very differently, pension systems’ ingredients, characteristics and nexus are far from being homogeneous, and the role of market principles in hybrid systems differs. These differences significantly determine the degree of social protection of the various social citizens and the number of future pensioners with adequate pensions. An illustrative comparison of the contrasting Dutch and German institutional setups indicates differences in the manner in which market principles have been strengthened in the pension system, and the related effects these differences have on social-risk spreading.

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