scholarly journals The fiscal effect of the recalculation of main old-age pensions stemming from L. 4387/2016

2021 ◽  
Vol 13 (2) ◽  
pp. 125
Author(s):  
Georgios Symeonidis
Keyword(s):  
Old Age ◽  
Pension System ◽  
Future Application ◽  
Long Run ◽  
New Type ◽  
Old Age Pensions ◽  
The Difference

L.4387/2016 introduced the recalculation of existent pensions based on a new type of formula and replacement. The difference between the amounts paid to pensioners at that time and the amounts calculated based on the new law, quoted as personal difference, was later legislated to be either cut, if it was positive, or paid in the long run, if it was negative. This coincided with legislation that froze pension indexation for the years up to 2022. Even though the pension indexation freeze is still valid, the pension reductions initially planned for 2019 were avoided. The pension increases, where applicable, were paid as planned, again in 2019. The extensive workload demanded to make the recalculation and the fiscal gap in contributions in the Greek pension system creates space for possible future application. In this view, this paper focuses on the fiscal effect of the reduction of the personal difference in combination with the freeze in pension indexation.

scholarly journals Old-age provision in transition: the case of Croatia

2018 ◽  
Vol 17 (4) ◽  
pp. 576-593 ◽  
Author(s):  
MARTIN WERDING ◽  
MARKO PRIMORAC
Keyword(s):  
Old Age ◽  
Economic Crisis ◽  
Future Development ◽  
Central Government ◽  
Pension System ◽  
Financial Strain ◽  
The Public ◽  
Long Run ◽  
Potential Impact ◽  
Old Age Provision

AbstractLike in a number of other transition countries, the Croatian pension system comprises a traditional public pay-as-you-go scheme and a mandatory funded scheme (second pillar) that will provide increasing amounts of supplementary pensions to those entering retirement in the future. Due to the continuing economic crisis, the public scheme is currently under enormous financial strain, with a sizeable impact on central government finances. At the same time, the level of benefits deriving from the overall system is likely to become inadequately low in the long run. In this paper, we describe the existing system and project its future development under current rules. We also discuss options for further reforming the system and highlight their potential impact on pension finances, public budgets and retirement incomes, as this may provide lessons, which are of interest elsewhere.

ADEQUACY OF DISABILITY PENSION SYSTEM IN LATVIA

2020 ◽  
Author(s):  
Olga Rajevska
Keyword(s):  
Old Age ◽  
Disability Pension ◽  
Social Protection ◽  
Pension System ◽  
People With Disabilities ◽  
Main Function ◽  
Eu Member States ◽  
The Social ◽  
Central Statistical ◽  
Old Age Pensions

The author analyzes the performance of the disability pension system in Latvia in order to assess the ability of the system to perform its main function: to prevent poverty among people with disabilities. It has been found that the system does not meet the criteria of adequacy and the causes of problem have been addressed. In the analysis, the author uses statistical data from Eurostat and the Central Statistical Bureau of Latvia, Mutual Information System on Social Protection (MISSOC) database, as well as considers statutory regulations. Particular attention is paid to such an element of the pension system as statutory minimum pension amount as a key tool aimed at ensuring the adequacy of the social protection of people with disabilities. Additionally, the author provides a comparative analysis of minimum disability pension provisions in the EU member states. Since the systems of old-age pensions and disability pensions in Latvia are closely connected, the author emphases the importance of the improvement of the adequacy of disability pensions in achieving more adequate old-age pensions.

scholarly journals Reality and expectations of old-age pension savings in the pension system of the Slovak Republic

2021 ◽  
Vol 21 (4) ◽  
pp. 411-436
Author(s):  
Peter Sika ◽  
Jarmila Vidová
Keyword(s):  
Old Age ◽  
Pension System ◽  
Slovak Republic ◽  
Age Distribution ◽  
Investment Strategy ◽  
Pension Funds ◽  
Investment Strategies ◽  
Short Term ◽  
Pension Systems ◽  
Long Run

Abstract The aim of the authors is to provide a critical statistical-analytical view of the current pension system of the Slovak Republic with special regard to old -age pension savings in its fifteen-year existence, resulting in proposals for adjustments to its operation. It includes an analysis of the sustainability of pension systems, an analysis of the age distribution of savers as well as possible investment strategies of savers and the distribution of their property savings in pension funds. We model the investment strategy of a participant in old-age pension savings. We draw attention to the evaluation of old -age pension savings in pension funds during its existence and quantify the potential loss caused by an inappropriate investment strategy of savers. The an alysis showed that the Slovak participant in old-age pension savings invests mainly in conservative pension assets, which bring low volatility in the short term, which may not be optimal in the long run. In order to achieve change, we also outline the possibilities of changing the attitudes of savers to value their savings and propose reform steps that would contribute to ensuring a balance between the financial and social sustainability of the pension system.

scholarly journals Christmas Allowance as a Non-System Tool for Sustainability of Quality of Life of Slovak Seniors

2020 ◽  
Vol 12 (9) ◽  
pp. 3810 ◽  
Author(s):  
Jarmila Vidová ◽  
Peter Sika
Keyword(s):  
Quality Of Life ◽  
At Risk ◽  
Older People ◽  
Old Age ◽  
Social Impact ◽  
Pension System ◽  
Negative Impact ◽  
Slovak Republic ◽  
Old Age Pensions

Creating conditions for a sustainable level of quality of life for older people is considered the dominant priority when setting up the pension system with an emphasis on the income situation of Slovak seniors for old-age pensions. An old-age pension as a systemic benefit is an important element in maintaining the quality of life of older people. The amount of old-age pensions is currently at the center of discussions between institutions and the Government of the Slovak Republic. A major social but also economic problem in the coming decade will be how to maintain the income of older people, pensioners, needed to ensure their sustainable quality of life. In particular, it is necessary to ensure that pensioners receive sufficient income so that they do not become a population at risk of poverty as the groups at risk of poverty or social exclusion also includes people over the age of 65. The paper focuses on the analysis of the socio-economic situation of Slovak pensioners in the Slovak Republic in connection with material deprivation. At the same time we analyze the Christmas contribution as a non-systemic benefit which, on the one hand, has a positive social impact on the recipients of pension benefits who are entitled to the Christmas benefit but, on the other hand, has a negative impact on the general government budget.

A ‘most imperial’ contribution: New Zealand and the old age pensions debate in Britain, 1898–1912

2014 ◽  
Vol 9 (2) ◽  
pp. 189-207 ◽  
Author(s):  
Edmund Rogers
Keyword(s):  
New Zealand ◽  
Social Policy ◽  
Old Age ◽  
Pension System ◽  
Mother Country ◽  
Funded Pensions ◽  
Elderly Poverty ◽  
English Speaking ◽  
Old Age Pensions ◽  
Liberal Government

AbstractThe extent of imperial influences upon nineteenth- and early twentieth-century British life, including in the development of social policy, has attracted significant scholarly interest in the past decade. The bearing of New Zealand's 1898 Old-Age Pensions Act upon the British debate over elderly poverty exemplifies the contested transfer of social policy ideas from settler colony to ‘Mother Country’. Reformers in Britain hailed a model non-contributory pension system with an imperial pedigree. However, the widely acknowledged distinction between ‘old’ countries such as Britain, and ‘new’ countries of English-speaking settlement, characterized the New Zealand example's reception. While progressives identified the colony as a ‘clean slate’ lacking the obstructive historical inheritance of the Poor Law, critics of state-funded pensions warned against drawing policy-making lessons from New Zealand. Yet when a reformist Liberal government introduced an Old Age Pensions Bill in 1908, it used Britain's age to justify the legislation's relative conservatism.

Old Age Pensions

2018 ◽  
Author(s):  
Pierre Pestieau ◽  
Mathieu Lefebvre
Keyword(s):  
Old Age ◽  
Pension System ◽  
Labour Force ◽  
Labour Force Participation ◽  
Population Ageing ◽  
Pension Systems ◽  
Demographic Challenges ◽  
Old Age Poverty ◽  
Future Outcomes ◽  
Social Security Benefits

This chapter gives an overview of the type of pension system existing in Europe. Contributive and redistributive systems are opposed but the chapter shows that pension systems are more often a mix of both. The chapter shows how these systems have been more or less effective in tackling old age poverty in most countries and it points to the main challenges that these systems are facing, namely population ageing and low labour-force participation. The major reforms that have been implemented to ensure future sustainability of pension systems are presented but a number of additional changes that should be implemented are discussed. The chapter also presents projections for future outcomes and the link between demographic challenges and social security benefits is highlighted.

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.

The Difference Principle, Capitalism, and Property-Owning Democracy

2018 ◽  
Vol 5 (1) ◽  
pp. 151-172
Author(s):  
Andrew Lister
Keyword(s):  
Welfare State ◽  
Equal Opportunity ◽  
Main Idea ◽  
Political Influence ◽  
Income Growth ◽  
Difference Principle ◽  
State Capitalism ◽  
Long Run ◽  
The Future ◽  
The Difference

Abstract Jason Brennan and John Tomasi have argued that if we focus on income alone, the Difference Principle supports welfare-state capitalism over property-owning democracy, because capitalism maximizes long run income growth for the worst off. If so, the defense of property-owning democracy rests on the priority of equal opportunity for political influence and social advancement over raising the income of the worst off, or on integrating workplace control into the Difference Principle’s index of advantage. The thesis of this paper is that even based on income alone, the Difference Principle is not as hostile to property-owning democracy as it may seem, because the Difference Principle should not be interpreted to require maximizing long run income growth. The main idea is that it is unfair to make the present worst off accept inequality that doesn’t benefit them, for the sake of benefitting the future worst off, if the future worst off will be better off than they are anyway.

The transition to a multi-pillar pension system: the inherent socio-economic anomaly

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ishay Wolf ◽  
Jose Maria Caridad y Ocerin
Keyword(s):  
Income Inequality ◽  
Old Age ◽  
Pension System ◽  
Economic Loss ◽  
Pension Scheme ◽  
Total Contribution ◽  
Content Type ◽  
Pension Systems ◽  
High Earning ◽  
Minimum Pension

Purpose This paper aims to analytically show that in an over-lapping-generation (OLG) model, low earning cohorts bear unwanted risk and absorb higher economic cost than high earning cohorts do. Design/methodology/approach This paper aims to consider the individual's risk appetite, using a simple utility function, based on consumptions and discount rates in each period. This paper calibrates the model according to teh Israeli pension system as a representative of a small open developed organization for economic cooperation and development country. Israel is considered as unique case study in the pension landscape, as it implements almost pure defined contribution pension scheme with continuous trend of pension market capitalization (Giorno and Jacques, 2016). Hence, this study finds Israel suitable for examining the theoretical mix of pension scheme. That model enables exploring combined solutions for adequate old age benefits, involving the first and the second pension pillars, under fiscal constraints. Findings It comes out that for risk-averse individuals, the optimal degree of funding is negatively correlated to asset returns' volatility and positively correlated to earning decile level. The neglect of risk and individual's current earning level will thus overstate the contribution level and funded percentage from total contributions. Moreover, even in an economy with minimum government intervention, and highly developed private pension fund with high average of rate of return, the authors find it is optimal that the pension system contains a sizeable unfunded pillar. This paper innovates by revealing a socio-economic anomaly in design of mix pension systems in favor of high earning cohorts on the expense of economic loss of low earning cohorts. Practical implications The model presented in this paper could be implemented in countries with mix pension systems, as an alternative to public social transfers or means tested, alleviating poverty and inequality in old age. Additionally, this model could raise the public awareness of the financial sustainability of the unfunded pay-as-you-go pillar to diversify financial risk in pension systems, especially for low earning cohort in society. Social implications One area of research that is particularly relevant in this context concerns the issue of alleviating poverty and income inequality. It is often stressed that the prevention of old age poverty is among the central targets of well-designed pension system (Holzmann and Hinz, 2005). The conceptualization of minimum pension guarantee used in this composition allows to clearly capturing the notion of such a poverty and social targets as an integral part of the pension system rolls. Originality/value This paper innovates by revealing a socio-economic anomaly in design of mix pension systems in favor of high earning cohorts on the expense of economic loss of low earning cohorts. That comes to realize through the level of total contribution rates and funded share that are generally optimal for high earning cohorts but not for low earning cohorts. This paper identifies that the effect of anomaly is most significant in a market characterized with high income-inequality level. This paper finds that imposing intra-generational risk sharing instrument in the form of minimum pension guarantee can re-balance pension design among different earning cohorts. This solution demonstrates balancing effect on the entire economy.

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