scholarly journals Linking retirement age to life expectancy in a Bismarckian system – the case of Germany

2016 ◽  
Vol 237 ◽  
pp. R22-R29 ◽  
Author(s):  
Valentin Vogt ◽  
Jörg Althammer
Keyword(s):  
Life Expectancy ◽  
Simulation Model ◽  
Growth Model ◽  
Pension System ◽  
The Other ◽  
Leslie Matrix ◽  
Retirement Age ◽  
Detailed Calculation ◽  
Contribution Rate ◽  
Pension Insurance

In times of decreasing mortality, one way to stabilise a PAYG pension system is to interrelate the retirement age to the anticipated average lifespan. This paper investigates two approaches for Germany: one is to keep the average retirement duration constant, the other to define a constant share of the total lifespan for the retirement period. Our simulation model uses a Leslie matrix population projection, a Solow-Swan growth model and a detailed calculation of the German pension insurance budget. Our results show quite a significant impact on the insurance level and a rather small effect on the contribution rate, which is characteristic of a Bismarckian system.

scholarly journals NON-STATE PENSION INSURANCE AS A SUPPLEMENT TO SOLIDAR PENSION SUPPLY

2019 ◽  
pp. 102-109
Author(s):  
O. Boiko
Keyword(s):  
Life Expectancy ◽  
Pension Fund ◽  
Pension System ◽  
Insurance Companies ◽  
Retirement Age ◽  
Pension Insurance ◽  
Average Life Expectancy ◽  
The World ◽  
The Right ◽  
State Pension

The main prerequisites for the emergence of problems of the pension system functioning in Ukraine, namely the solidarity system, are considered in the article. The budget, expenditures and deficit of the Pension Fund of Ukraine in the period 2010-2018 are analyzed. The amount of pensions was calculated taking into account the change in the dollar exchange rate and the inflation rate for the analyzed period and it was proved that the increase in the size of the pension does not lead to its actual growth. Emphasis is placed on the principle of calculation of pensions and attention is paid to the concept of a single social contribution, which has the minimum and maximum possible sum of payment. Based on the data, the author compared the size of the minimum (state) pensions in different countries of the world and in Ukraine and showed that the size of the pension is the lowest among the compared countries. An important aspect of the study was the comparison of average life expectancy. This suggests that the increase in life expectancy is causing the states of the world to raise the retirement age in order to delay the payment of state pensions. Alongside this the alternative to state pensions are private pensions. During the working period, every citizen has the right to make savings in different financial institutions as they have the right to invest. Funds that have been saved and multiplied are the main source of retirement income. Voluntary pension institutions are also envisaged in Ukraine. However, despite the legislative support and the general need to have their own retirement savings, citizens do not actively take the opportunity to create additional pensions. The reasons for this are lack of awareness of the population by the state about the essence of the pension reform, the general economic situation in the country, as well as the lack of financial literacy of the population itself, the unwillingness to take responsibility for their future and the low level of income. On the basis of these data, the need for active involvement of both public administration and citizens in the cumulative system is substantiated. Keywords: retirement age, pension fund, cumulative insurance, life insurance companies.

scholarly journals ANALYSIS OF THE RELATIONSHIP BETWEEN WORKING TIME AND RETIREMENT TIME IN THE NUTS 2 REGIONS OF HUNGARY IN THE LIGHT OF GENDER AND REGIONAL DISPARITIES

2020 ◽  
Vol 8 (12) ◽  
pp. 309-320
Author(s):  
Felix A. Dorstelmann ◽  
Keyword(s):  
Life Expectancy ◽  
Pension System ◽  
Adult Life ◽  
Regional Disparities ◽  
Working Time ◽  
Retirement Age ◽  
Average Life Expectancy ◽  
Policy Measures ◽  
The Difference ◽  
And Gender

This paper examined the effects of raising the statutory retirement age at NUTS 2 levels, differentiated by gender in Hungary. The evaluation criterion was the ratio of working time to retirement time concerning adults average life expectancy. This criterion was used to examine whether and to what extent regional and gender disparities exist at NUTS 2 levels and whether these disparities should be considered in policy measures. The empirical results indicated differences between the genders and regions regarding the burden of raising the retirement age. Women spend more time in retirement than men in terms of average adult life expectancy. This finding illustrates the difference in life expectancy between the sexes in Hungary. Besides, regional disparities in participation in the pension system have been observed for both women and men. These disparities can cause unintended distributional effects when the retirement age is increased. In this context, it is recommended that further policy measures are taken to address gender and regional disparities.

scholarly journals Capital Funded Models of Pension Insurance on Selected Examples Part 2

2017 ◽  
Vol 0 (0) ◽  
Author(s):  
Tomasz Sowiński
Keyword(s):  
South America ◽  
Pension System ◽  
Mirror Image ◽  
The Other ◽  
Simple Analysis ◽  
Pension Insurance ◽  
Economic Concept ◽  
Pension Schemes ◽  
The One ◽  
Almost All

Abstract In the first part of this study on the capital funded models of pension schemes, the economic concept [in theory] and the Chilean and Argentinian concepts of pensions schemes implemented in those countries were presented. On the one hand, extremely similar to each other, and on the other different with so many detailed solutions that it might as well be said they are completely dissimilar. If we chronologically consider the Chilean system as the primary one, than the Argentinian system is its mirror image, however, reflected in a mirror from the house of mirrors. It is not an uncommon opinion that these are the only countries in which the capital funded model was implemented, but as it was concluded in the first part of the study, almost all of South America became in its own way an unusual testing ground for the implementation of the capital funded concept of pension insurance. Just as the Chilean and Argentinian solutions seem apparently similar to each other, the solutions of the remaining countries in the scope of pension insurance have many variations, specific only to them or to the countries on that continent. To provide a fuller comparison, the tabular summaries will include apart from the two already described countries, the following six countries: Peru, Columbia, Uruguay, Bolivia, Mexico and El Salvador, and also the already described solutions in Chile and Argentina to facilitate a more complete and simple analysis of the presented data. The two best known and continuously analyzed pension insurance systems in South America are, similarly as the Polish and Swedish concepts, though with a definitely different distribution of accents, the Chilean and Argentinian systems. Both are the execution of the so-called capital funded model. Both were implemented in large capitalistic countries located on the same continent. In both countries, the previous pension system were at the verge of efficiency and their economic situation, economies and budgets were also in a state requiring intervention and repair programs. It is worth analyzing even in those cases the differences between the implementation and execution methods and procedures of those pension insurance models that are similar in assumption, and what is very important, the effects or lack of effects in those elements of both implemented models with which they differed.

scholarly journals The path forward for sustainability of the pension system in a historical context

Upravlenie ◽  
2021 ◽  
Vol 9 (1) ◽  
pp. 40-48
Author(s):  
J. Mertl ◽  
R. Valenčík
Keyword(s):  
Pension System ◽  
Current System ◽  
Historical Context ◽  
Retirement Age ◽  
System Reform ◽  
Pension Insurance ◽  
Individual Productivity ◽  
Merit System ◽  
Pension Insurance System

The long-term sustainability and stability of the pension insurance system can be provided on the basis of a pay-as-you-go system, specifically the NDC variant, which can combine the main type of solidarity (between those who can and want to be gainfully active and those for whom the insured event has occurred) with income solidarity. When reforming the pension system in this manner the opportunity arises to begin gradual changes through fully merit system reform and therefore significantly motivating of extending the period of productivity (putting off retirement) through the upgrade of this system for persons who have reached the retirement age as specified by law.This paper aims to substantiate and explore possible changes in this direction that will not endanger anyone’s entitlements when the reforms are implemented (they have got the form of Pareto improvement), as they derive their funds by extending the time of individual productivity. To this end, the possibility of introducing an extension on top of current system of pay-as-you-go insurance, which could be entered voluntarily by persons who have already reached or are near statutory retirement age, is proposed, and modeled. The extension would operate on the principle that the paid premiums will be transformed into a lifetime annuity. The system would be significantly motivating which for most people means extending life at the fullest, associated with the option to retain beneficial social contacts and gradually relax their gainful activity without experiencing an untoward decrease in income.

scholarly journals Pension policies in a model with endogenous fertility

2018 ◽  
Vol 19 (1) ◽  
pp. 109-125 ◽  
Author(s):  
GIAM PIETRO CIPRIANI ◽  
FRANCESCO PASCUCCI
Keyword(s):  
Overlapping Generations ◽  
Pension System ◽  
Retirement Age ◽  
Endogenous Fertility ◽  
Contribution Rate ◽  
Negative Effects ◽  
Overlapping Generations Model ◽  
The Social ◽  
Policy Measures ◽  
Set Up

AbstractWe set up an overlapping-generations model with endogenous fertility to study pensions policies in an ageing economy. We show that an increasing life expectancy may not be detrimental for the economy or the pension system itself. On the other hand, conventional policy measures, such as increasing the retirement age or changing the social security contribution rate could have undesired general equilibrium effects. In particular, both policies decrease capital per worker and might have negative effects on the fertility rate, thus exacerbating population ageing.

Drohende Altersarmut – neue Aufgaben für die Rentenversicherung?

2012 ◽  
Vol 61 (2) ◽  
Keyword(s):  
Life Expectancy ◽  
Old Age ◽  
Equivalence Principle ◽  
Pension System ◽  
The Elderly ◽  
Pension Scheme ◽  
Pension Insurance ◽  
Poverty Risk ◽  
Employment Trajectories ◽  
Old Age Poverty

AbstractOliver Arentz and Steffen Roth state that poverty among the elderly is currently an exception in Germany. Nevertheless, it is foreseeable that future pensioners will have less income and assets at their disposal. Reasons are the effects of the demographic change to the pay-as-you-go pension scheme, gaps in employment biographies and low pay employment. With that in mind, they discuss the reform package advocated by the Federal Ministry of Labour and Social Affairs. Furthermore they derive guidelines for a sustainable reform of the pension schemes.Bert Rürup also argues that poverty in old age is up to now not a relevant social problem in Germany. Nevertheless, there are clear indications that poverty among the elderly will increase in the future due to a bundle of reasons. Because of this there is no silver bullet to solve this problem. In the conception of an adequate strategy to reduce and to prevent a rise of poverty in old age, however, the equivalence principle as the basic principal the German statutory pension scheme has to be questioned critically.Jan Goebel gives an overview of the current development of old-age poverty in Germany and classifies widely discussed concepts for the reform of statutory pension insurance. Although current indicators generally point to an increase in old-age poverty, the empirical data show no growth at present in poverty risk for persons aged 65 and older. However, it is expected that the income position of older people will be worsen due to the declining pension payments of new retirees and the increase in discontinuous employment trajectories as well as the insufficient spread in private old age provision. One of the reforms discussed for preventing rising poverty risks in old age is to consider life expectancy in the pension formula. This appears to be a promising means of reducing inequality within the group of pensioners, he states. The implicit redistribution within the statutory pension system due to the empirically well-known correlation between living standards and life expectancy will decrease, and the equivalence principle can be strengthened.

Transformation of the Principles of Formation of Insurance Pension Rights in the Context of Increased Retirement Age

2019 ◽  
pp. 67-79
Author(s):  
A. K. Solov’ev
Keyword(s):  
Pension System ◽  
Demographic Factors ◽  
Population Ageing ◽  
Retirement Age ◽  
Time Interval ◽  
Pension Insurance ◽  
Insurance System ◽  
The Future ◽  
The Impact ◽  
Pension Insurance System

The presented study examines the impact of macroeconomic and demographic factors and increased retirement age on the formation of the pension rights of insured persons within the distributive component of the compulsory pension insurance system.Aim. The study aims to use actuarial calculations to substantiate the procedure for the formation of insurance pension rights within the compulsory pension insurance system in the context of population ageing.Tasks. The authors develop methodological approaches to the actuarial substantiation of the formation of pension rights within the distributive component of the compulsory pension insurance system. They also formulate proposals for improving pension legislation to increase the efficiency of the formation of insurance rights within the compulsory pension insurance system and for the Pension Fund of the Russian Federation to achieve fiscal balance, raising the level of pension for the period up to 2050.Methods. This study uses general and special scientific methods of cognition – analysis (economicstatistical, financial, systemic, comparative) of theoretical and practical materials and synthesis, expert assessment, actuarial modeling and forecasting – to examine the formation of pension rights by insured persons within the context of the pension system in various aspects (legal, historical, temporal) and to develop proposals for implementing measures aimed at improving the efficiency of the formation of pension rights in the long term.Results. Analysis of the leading approaches and principles in the formation of the pension rights of insured persons and legislative regulation of this process within a time interval of more than 30 years as well as the conducted actuarial calculations show that it is necessary to create a new mechanism for calculating pension rights in the context of population ageing. There is an obvious need to develop constructive measures based on the results of actuarial calculations to improve pension legislation.Conclusions. Examination of the way the formation of pension rights of insured persons transformed over time makes it obvious that this process is continuously affected by macroeconomic and demographic factors, including natural population ageing, and the measures taken to increase the retirement age. The resulting situation calls for the development of a set of measures aimed at improving the efficiency of pension reforms in the future to fully make allowance for the pension rights of insured persons in the amount of the future pension.

Drohende Altersarmut – neue Aufgaben für die Rentenversicherung?

2012 ◽  
Vol 61 (2) ◽  
Author(s):  
Jan Goebel
Keyword(s):  
Life Expectancy ◽  
Old Age ◽  
Pension System ◽  
Living Standards ◽  
Pension Insurance ◽  
Poverty Risk ◽  
Employment Trajectories ◽  
Old Age Poverty ◽  
Pension Payments ◽  
Old Age Provision

AbstractThe article gives an overview of the current development of old-age pover ty in Germany and classifies widely discussed concepts for the reform of statutory pension insurance. Although current indicators generally point to an increase in old-age poverty, the empirical data show no growth at present in poverty risk for persons aged 65 and older. However, it is expected that the income position of older people will be worsen due to the declining pension payments of new retirees and the increase in discontinuous employment trajectories as well as the insufficient spread in private old age provision.One of the reforms discussed for preventing rising poverty risks in old age is to consider life expectancy in the pension formula. This appears to be a promising means of reducing inequality within the group of pensioners. The implicit redistribution within the statutory pension system due to the empirically well-known correlation between living standards and life expectancy will decrease, and the equivalence principle can be strengthened.

scholarly journals An Indexation Mechanism for Retirement Age: Analysis of the Gender Gap

Risks ◽  
2019 ◽  
Vol 7 (1) ◽  
pp. 21
Author(s):  
Mariarosaria Coppola ◽  
Maria Russolillo ◽  
Rosaria Simone
Keyword(s):  
Life Expectancy ◽  
Social Security ◽  
Gender Gap ◽  
Pension System ◽  
Residual Life ◽  
Retirement Age ◽  
Longevity Risk ◽  
Social Security Systems ◽  
Security Systems ◽  
Averaged Model

The management of National Social Security Systems is being challenged more and more by the rapid ageing of the population, especially in the industrialized countries. In order to chase the Pension System sustainability, several countries in Europe are setting up pension reforms linking the retirement age and/or benefits to life expectancy. In this context, the accurate modelling and projection of mortality rates and life expectancy play a central role and represent issues of great interest in recent literature. Our study refers to the Italian mortality experience and considers an indexing mechanism based on the expected residual life to adjust the retirement age and keep costs at an expected budgeted level, in the spirit of sharing the longevity risk between Social Security Systems and retirees. In order to combine fitting and projections performances of selected stochastic mortality models, a model assembling technique is applied to face uncertainty in model selection, while accounting for uncertainty of estimation as well. The resulting proposal is an averaged model that is suitable to discuss about the gender gap in longevity risk and its alleged narrowing over time.

Die finanzielle Entwicklung der Gesetzlichen Rentenversicherung – Simulationsrechnungen mit dem Rentensimulationsmodell MEA-Pensim

2012 ◽  
Vol 61 (3) ◽  
Author(s):  
Martin Gasche ◽  
Annette Holthausen ◽  
Johannes Rausch ◽  
Christina Wilke
Keyword(s):  
Simulation Model ◽  
Labour Market ◽  
Federal Government ◽  
Pension System ◽  
Financial Sustainability ◽  
Contribution Rate ◽  
Demographic Trend ◽  
Future Developments ◽  
Benefit Level

AbstractAgainst the background of the demographic trend the German Pension System is faced with the question of its financial sustainability. In order to predict future developments or potential reforms we apply a simulation model for the German Pension System (MEA-pensim), which enables us to replicate the pension system including all its crucial determinants (i. e. the population and the labour market). We present the model and discuss some selected simulations like the effect of different population and labour market developments on the contribution rate as well as the benefit level or the impacts of the proposal by the federal government to extend the supplementary period (Zurechnungszeit) for disability pensions.

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