scholarly journals Fiscal effects of the Norwegian pension reform – A micro–macro assessment

2017 ◽  
Vol 18 (1) ◽  
pp. 88-123 ◽  
Author(s):  
DENNIS FREDRIKSEN ◽  
ERLING HOLMØY ◽  
BIRGER STRØM ◽  
NILS MARTIN STØLEN
Keyword(s):  
Labour Supply ◽  
Pension System ◽  
Pension Reform ◽  
Fiscal Sustainability ◽  
Microsimulation Model ◽  
Fiscal Impact ◽  
Cge Modelling ◽  
Long Run ◽  
Norwegian Population

AbstractThe main goal of the Norwegian pension reform of 2011 is to improve long run fiscal sustainability, not least through stronger labour supply incentives. We assess to what extent the reform is likely to live up to these intentions. To this end we combine a dynamic microsimulation model, which includes a complete description of the Norwegian population and the pension system, with CGE-modelling of the effects on all government revenues and expenditures. We find that the reform is likely to make a great fiscal impact in the long run, and higher employment plays an important role in this respect.

Iceland's New Plan for Debt Relief: Jubilee or Waiting for Godot?

2014 ◽  
Vol 5 (4) ◽  
pp. 517-530
Author(s):  
Maria Elvira Méndez Pinedo
Keyword(s):  
Pension System ◽  
Pension Reform ◽  
Debt Relief ◽  
Economic Recovery ◽  
European Law ◽  
Future Scenario ◽  
The Public ◽  
Long Run ◽  
Waiting For Godot ◽  
Loan System

Despite Iceland's economic recovery, nearly 48% households continue to struggle to make ends meet. This study argues, first, that the main reason behind over-indebtedness in this country is a loan system without parallel in Europe, based on a triple cost of credit (fix/variable interest, indexation of credit to inflation and negative amortization). Second, the problem is examined in the context of European law as some alleged malpractices of indexation have been referred to the EFTA Court. Third, the focus shifts to the debt-relief programme presented by the Icelandic government in 2013/2014 after the relative failure of previous debt-relief measures. It is argued that this plan will fail in the long run as long as the indexation of credit to inflation is not abolished. The private pension system in Iceland relies indirectly on indexed mortgage credit issued by the public Housing Financing Fund. Since a ban on indexation and a holistic pension reform are not expected soon, all present debt write off benefits will surely be eaten up by higher inflation. As long as indexation of credit is legal, the future scenario resembles less a debt-relief jubilee and more the theater play “Waiting for Godot ”.

scholarly journals Contribution volatility and public pension reform

2017 ◽  
Vol 17 (4) ◽  
pp. 513-533 ◽  
Author(s):  
TRAVIS ST. CLAIR ◽  
JUAN PABLO MARTINEZ GUZMAN
Keyword(s):  
Local Governments ◽  
Pension System ◽  
Pension Reform ◽  
Pension Plans ◽  
Fiscal Sustainability ◽  
Economic Downturn ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Unfunded Liabilities

AbstractIn the wake of the economic downturn of 2008–2009, researchers and policymakers have focused considerable attention on the extent of unfunded liabilities in US public sector pension plans and the implications for the long term fiscal sustainability of state and local governments. In response to the growth in liabilities, many states have introduced legislation that cuts back on defined benefit (DB) plan commitments, in some cases even shifting the pension system from a DB to a defined contribution or hybrid plan. This paper explores the factors that have led states to engage in pension reform, focusing particular attention on one factor that has only recently gained attention in the research literature: contribution volatility. While unfunded liabilities have significant long-term solvency implications, in the short term fluctuations in the amount of required contributions pose substantial difficulties for the ability of plan sponsors to balance budgets and engage in strategic planning. We begin by quantifying the volatility in the required contributions US states were expected to make between 2001 and 2013 and comparing the volatility of pension spending to other relevant tax and spending measures. Next, we describe the various types of pension reforms that states have implemented and examine the fiscal pressures facing those states that have engaged in reform. States with greater fluctuations in their required payments have been more likely to reduce benefits and increase employee contributions; they have also been more likely to institute these reforms sooner.

Deficit will rise absent labour reform in Argentina

2017 ◽  
Keyword(s):  
Public Opinion ◽  
Social Security ◽  
Informal Sector ◽  
Pension System ◽  
Pension Reform ◽  
Fiscal Sustainability ◽  
Social Security Reform ◽  
Content Type ◽  
The Social ◽  
Fiscal Imbalance

Subject The outlook for pension reform. Significance In 2016 Congress passed Law 27.260, which established measures to improve pensioners’ welfare, and set a three-year deadline to create a new pension system, which would be universal, comprehensive and sustainable, and maintain the current system’s pay-as-you-go feature. The pensions deficit represents a significant portion of the fiscal imbalance, so any policy to improve fiscal sustainability will require social security reform. However, the current pension system is considered unfair by most pensioners and active workers. Impacts The social security reform will face opposition in Congress and resistance from public opinion. A strong result for the new Unidad Ciudadana party in the October elections could delay the reform. The large informal sector will militate against reducing the pensions deficit.

scholarly journals Impact Of Retirement Benefit Act (RBA) On Investment Returns To Pension Funds In Kenya

2010 ◽  
Vol 9 (4) ◽  
Author(s):  
Lucy Jepchoge Rono ◽  
Julius Kibet Bitok ◽  
Gordon N Asamoah
Keyword(s):  
Pension System ◽  
Pension Reform ◽  
Pension Funds ◽  
Insurance Fund ◽  
Retirement Benefits ◽  
Fund Managers ◽  
Long Run ◽  
Investment Returns ◽  
Mean Differences ◽  
The Impact

This study focused on the analysis of the impact of RBA guidelines on the return on investments of both pension funds under management and those for pension schemes. A random sample of 175 fund trustees and a census of 13 fund managers from registered fund management companies participated in the survey. The questionnaire was administered through the drop-and-pick method. Data were analyzed using SPSS (Statistical Package for Social Sciences) and summarized in descriptive statistics, such as mean, standard deviation, frequencies, percentages, and t-tests for mean differences were used. The study determined that annual investment return for retirement benefits schemes in the past three years ranged between 10 and 27.52%, sometimes falling below the annual inflation.  The Kenya pension funds are in compliance with the prescribed broad guidelines with regard to maximum percentages of total asset value of fund by the RBA Act. They are, however, moderately in compliance with the regulations requiring that that they maintain an actuarial solvency of 80% and above. The overall weighted returns before the implementation of RBA Guidelines was low (average scale of 1.9) while the weighted returns after the implementation of RBA Guidelines was high, at an average scale of 3.7. An analysis of the trend, however, showed that long-run performance has slowed down. The highest growth was realized for mortgage and cash returns as opposed to rights issues and bonus shares. There is need to fashion out the appropriate mix of reforms suitable for Kenya that will ensure the long-run sustainability of its pension systems. The challenge is for the country to adopt a unified, harmonized, and transparent regulatory framework that will integrate the pension system in order to ensure sustainability in its financing and mobilizing of adequate funds to cater for the ever-increasing population of beneficiaries in this regard, comprehensive pension reform policy with wider target radar and one that will consolidate and harmonize the various legislations touching on retirement benefits industry in line with Retirement Benefits Act. The Regulator needs to implement measures to ensure pension funds are insulated from inflationary and other risks.  An effective way is to institute a pension risk insurance fund that will underwrite and compensate such losses as will be prescribed. Further, there is need for a systematic indexation of benefits to inflation. RBA should strengthen its compliance and enforcement function in order to ensure that it appropriately deals with emerging present and future regulatory challenges.

Zur Rentenproblematik: Lösungswege und Reformvorschläge

2001 ◽  
Vol 50 (2) ◽  
Keyword(s):  
Pension System ◽  
Pension Reform ◽  
Married Couples ◽  
Developed Countries ◽  
Pension Scheme ◽  
National Account ◽  
Demographic Development ◽  
Long Run ◽  
The Future ◽  
Uniform Taxation

AbstractThis economic policy forum is assigned to the problems of pensions. Eckart Bomsdorf remarks that the pension scheme system in Germany will be stretched to its limit in the future. Like in many other highly developed countries, the reason for this is the demographic development. The number of people who receive pensions is increasing, while the number of contributors is stagnating or even decreasing. The latest pension reforms try to counteract this development. They will work until 2010, after this, however, these measures will not be sufficient to secure Germany’s pension system. Some additional measures can make the statutory pension system in Germany fit for the future. Increasing the retirement age and a new pension formula, which takes the demographic development into consideration sufficiently, are of particular importance.In his contribution, Axel Börsch-Supan states that after the Pension Reform 2000 has successfully passed both chambers of the German parliament, the German pension system still rests mainly on an expanding pay-as-you-go financing mechanism. He argues that the long-run stabilization of the German pension system will need further reform steps with three main elements: (1) A reformed pay-as-you-go pillar which is actuarially fair, features a transparent national account set-up, and freezes contribution rates; (2) A deeper second funded pillar which is based on US 401(k)-style grouped accounts that finances the impending aging burden; (3) An internally consistent regulatory framework for the German capital market including uniform taxation of all retirement savings according to the EET principle.The topics of Friedrich Breyers contribution are often neglected elements of the pension reform: dependents relief and pension splitting within the social security system. The reform introduces the choice of splitting, where each spouse receives half of the total pension claims, which both have acquired during the marriage. The author asks whether the method of income tax splitting should be applied to the health insurance as well as the pension system in order to strengthen the equivalence principle. It is shown that only with mandatory splitting in the pension system the preferential treatment of married couples as opposed to singles would be eliminated.

The Sustainable Debts of Philip II

2017 ◽  
Author(s):  
Mauricio Drelichman ◽  
Hans-Joachim Voth
Keyword(s):  
Sixteenth Century ◽  
Strong Evidence ◽  
Military Expenditure ◽  
Debt Service ◽  
Fiscal Sustainability ◽  
Short Term ◽  
Systematic Analysis ◽  
Philip Ii ◽  
Long Run

This chapter addresses the sustainability of debt. A systematic analysis based on the International Monetary Fund's (IMF) methodology to evaluate fiscal sustainability shows that Castile was able to service its debts in the long run. While liquidity was scarce during periods of intense warfare, years of relative peace brought large surpluses. The data collected from Castile's annual fiscal accounts produced new yearly series of revenue, military expenditure, short-term debt issues, and short-term debt service. The resulting database spans a full 31-year period—enough to employ modern quantitative techniques. This analysis provides strong evidence that Castile's fiscal position in the second half of the sixteenth century was on a solid footing. The chapter then assesses whether the events that led to major downturns in Castile's financial fortunes could have been anticipated.

Assessment of Poland's Economic Policy During te Crisis

2013 ◽  
Vol 8 (3) ◽  
pp. 195-210
Author(s):  
Stefan Krajewski
Keyword(s):  
Economic Policy ◽  
Pension System ◽  
Fiscal Sustainability ◽  
Economic Policies ◽  
Role Of The State ◽  
The Usa ◽  
Reducing Costs ◽  
Polish Economy ◽  
Favorable Conditions ◽  
The Eu

The rapid weakening of economic activity, covering most states in the world, gives rise to a lively discussion on the choice of methods to tackle the crisis, the legitimacy and effectiveness of various economic policies, the role of the state and the scope of its intervention in the economy. The paper evaluates the Polish economic policy in recent years. This refers to the situation prevailing in the EU and the USA. I conclude that the Polish economy during the crisis remained relatively stable, without having to provide the emergency aid from the outside. The development of such a situation has been affected by different reasons, including: - The benefits of the so-called "backwardness rent", which resulted, among others, in the inflow of EU funds (Poland was in 2007-2013 and in will be in 2014-2020 the biggest beneficiary of the EU budget); - The effects of decisions on changes in the tax and social security, taken for political reasons (before the crisis); - The controversial withdrawal from the funded pension system, reducing the budget deficit and public debt; - The prudent monetary policy and anti-inflation policy pursued over many years. Actions taken in Poland are primarily focused on reducing costs, which differs quite significantly from the economic policy dominant in the U.S. and the "old" EU countries which generally pursue expansionary fiscal policy and a policy of cheap money. Polish solution facilitates the achievement of short-term fiscal sustainability, but does not create favorable conditions for the development in the long-term (insufficient investment, petrification of economic structure, lack of innovation). 

scholarly journals Actuarial deductions for early retirement

2021 ◽  
pp. 1-27
Author(s):  
Markus Knell
Keyword(s):  
Early Retirement ◽  
Pension System ◽  
Budget Constraint ◽  
Retirement Age ◽  
Single Individual ◽  
Internal Rate Of Return ◽  
Market Interest Rate ◽  
Long Run ◽  
Retirement Behavior ◽  
The Right

Abstract This paper studies how the rates of deduction for early retirement have to be determined in pay-as-you-go (PAYG) systems in order to keep their budget stable. The derivation of these deductions requires the use of a multiperiod intertemporal budget constraint that involves assumptions about the retirement behavior of past, present, and future cohorts. In general, it is not possible to calculate budget-neutral deductions from the budget constraint of a single individual who retires before the target retirement age—an approach that dominates the related literature. Only for specific cases one can use this second approach but then one has to adjust the discount rate to the assumption about collective retirement. If there is only one deviating individual, then the right choice is the market interest rate while for a stationary retirement distribution it is the internal rate of return of the PAYG system. In this case, the necessary deductions are lower than under the standard approach. This is also true for retirement ages that fluctuate randomly around a stationary distribution. Various long-run developments (e.g., increases in life expectancy or permanent changes in the average retirement age) might cause challenges for the sustainability of the pension system. These developments, however, can only be dealt with by adequate adjustments to the basic pension formulas and not by the use of deduction rates.

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