Private Pension Funds in Hungary

2005 ◽  
Vol 55 (3) ◽  
pp. 287-315 ◽  
Author(s):  
Ichiro Iwasaki ◽  
Kazuko Sato
Keyword(s):  
Trade Unions ◽  
Pension System ◽  
Pension Reform ◽  
Legal Framework ◽  
Pension Funds ◽  
Negative Influence ◽  
Private Pension ◽  
Pension Scheme ◽  
Special Interest Groups ◽  
Governance Reform

The new pension system launched in Hungary in 1998 is epoch-making for having introduced a mandatory private pension scheme (MPPS). However, the political decision-making on pension reform and the scheme operations have been greatly influenced by conflicts of interests among ministries, political conflicts between parties, and the presence of special interest groups, including trade unions and financial institutions. This situation may have had a certain negative influence on the legal framework of the MPPS and on the management performance of private pension funds. In order for the MPPS to be sustainable in the future and to make insurance beneficiary profits a top priority, the corporate governance reform of pension funds and reinforcement of the monitoring system over them, and political neutralisation of the public pension system are necessary.

scholarly journals Tax Incentives as a Part of Governments’ Applied Mechanisms for the Third Pension Pillar in Estonia, Latvia, and Lithuania

2020 ◽  
Vol 1 (14) ◽  
pp. 146-155
Author(s):  
Evija Dundure ◽  
Biruta Sloka
Keyword(s):  
Pension System ◽  
Tax Incentives ◽  
Pension Funds ◽  
Private Pension ◽  
Pension Scheme ◽  
Pension Systems ◽  
The Third ◽  
Baltic Countries ◽  
Tax Exempt ◽  
The Baltic

The main objective of the improvements to public pension systems is to create a balanced three-pillar pension structure and increase public accountability for pension capital formation. Most pension systems are based on the first two pension system pillars – mandatory contributions in the state compulsory unfunded pension scheme and the state-funded or accumulated pension scheme in pension funds. However, the pension level adequacy has been reached by adding the third pension system pillar - voluntary investments in private pension funds. Governments are private pension system policymakers by defining a legal framework and providing tax incentives for voluntary investments for retirement. In the Baltic countries – Estonia, Latvia, and Lithuania, the third pension pillar is at an early stage of its development, and as such, should be particularly stimulated. This research focuses on the tax incentives utilized by the governments of Estonia, Latvia, and Lithuania and aims to ascertain and compare the effectiveness of the tax incentive policies applied to the third pension pillar by the governments of the three Baltic countries. It questions the effectiveness of the incentive mechanisms the governments of the Baltic countries have chosen, which include involving most of the population in the private pension saving programs. The research methods used are the analysis of scientific publications on the previously conducted research, acts of legislation of Baltic countries, as well as an analytical study of statistical data on the development of voluntary pension fund contributions in Estonia, Latvia, and Lithuania. The research results indicate that the tax incentives are the mechanism to motivate the population to create savings in the third pension pillar in all three Baltic countries. However, Latvia being the country with the highest coverage rate of the third pension pillar has the most unfavorable conditions for creating savings. There are no tax incentives on returns on investment and tax-exempt withdrawals in Latvia, while Estonia and Lithuania have all positions tax-exempt. A more detailed analysis of the tax incentives at the contribution stage explains the underdeveloped third pension pillar in Lithuania, as Lithuanian personal income tax reliefs are targeted at low or medium wages or gross income. The research has highlighted the impact of tax incentives on voluntary savings for retirement in the three Baltic countries, opening a discussion about the effectiveness of governments' applied mechanisms.

scholarly journals ANALYSIS AND PROSPECTS OF PRIVATE PENSION FUNDS IN RUSSIA

2014 ◽  
pp. 82-87
Author(s):  
A. Pudovkin
Keyword(s):  
Growth Factors ◽  
Pension System ◽  
Pension Reform ◽  
Pension Funds ◽  
Private Pension ◽  
Pension Insurance ◽  
Pension Schemes ◽  
The Russian Federation ◽  
Key Drivers ◽  
Near Future

The article under the title "Analysis and prospects of private pension funds in Russia" deals with the pension system of the Russian Federation and the problems that the private pension funds will be facing with the introduction of the new pension reform. In addition, the article also deeply studies the private pension funds market in Russia. The study presented in the article also aims to thoroughly analyze the key drivers of the recent boom of the private pension funds sector. In addition, the study also reflects on the prospects of development of private pension funds and the major growth factors for the future taking into considerations the latest pension reform. It is exactly the pension capital that constitutes the major role to the growth of the the private pension funds market. In addition, taking into account the latest developments in the pension legislature, which imply no pension capital available to the private pension funds for the period 2014-2015 years, it is easy to foresee that the only growth factor left is pension reserves. Overall it obviously means that private pension funds should develop private pension schemes. Moreover, private pension insurance may become the major driver of the whole pension industry in the near future.

ACTIVITIES OF NON-STATE PENSION FUNDS IN THE FIELD OF EARLY NON-STATE PENSION PROVISION

2020 ◽  
Vol 16 (5) ◽  
pp. 248-252
Author(s):  
EKATERINA YUDINA ◽  
Keyword(s):  
Early Retirement ◽  
Pension System ◽  
Pension Reform ◽  
Federal Budget ◽  
Legal Framework ◽  
Pension Funds ◽  
Retirement Pension ◽  
Insurance Premiums ◽  
State Pension ◽  
State Pension Funds

The system of early retirement pensions was inherited from the USSR and every third Russian pensioner receives a preferential pension. It is assigned to metallurgists, oil workers, coal miners, ballerinas, trolleybus drivers, teachers - the lists of early retired pensioners are huge. The conduction of pension reform involved seeking resources within the system itself. To solve the problem of financing preferential pensions, a system of early non-state pension provision was created, implemented through non-state pension funds. However, the existing legislative regulation does not stimulate employers of hazardous and dangerous industries to create corporate pension programs due to the fact that they will not exempt employers from paying additional insurance premiums in favor of employees on preferential lists. As a result, there are no employers in the country who will not only pay wages on time, transfer insurance premiums in a timely manner, but for this category in an increased amount, but will also form additional contributions for the same employees under the early non-state pension system. The non-state pension paid in the frame of this system does not replace the early insurance old-age pension, that is, it does not entail a decrease in federal budget costs. The purpose of this study is to consider the main legal acts and the process of development of legislation on early non-state pension provision. The result of the study is practical proposals for improving the legal framework of the early retirement pension system.

scholarly journals Problematic aspects of the regulatory and legislative framework for calculating pensions in Ukraine

2019 ◽  
pp. 71-80
Author(s):  
Lina Diakovych
Keyword(s):  
Pension System ◽  
Pension Reform ◽  
Legal Framework ◽  
Retirement Age ◽  
European Economic Area ◽  
Defined Contribution ◽  
Average Life Expectancy ◽  
Legislative Framework ◽  
State Pension ◽  
Pension Payments

Introduction. In order to further move towards the European Economic Area, Ukraine needs to take pension reform measures. Pension provision in Ukraine has to be profoundly reformed in terms of regulatory and legislative framework for calculating pensions in Ukraine. What is of particular importance is improving Ukraine’s laws and methods for calculation and pension payments to citizens. Another important focus of the reform agenda is to define categories of people eligible for old-age pensions, disability pensions, and long- service pensions. Purpose. The purpose of the article is to interpret the regulatory and legislative framework for calculating pensions in Ukraine; to describe changes in pension payments before and after the reform was implemented; to highlight ways of improving pension payments in terms of regulations and legislation. Methods. The research methods used in the article include: analysis; comparison; historical method to consider the legislative framework for calculating pensions at different periods of time. Results. The regulatory and legal framework for calculating pensions in Ukraine is a complex system comprising the Constitution of Ukraine, the Laws of Ukraine, the Labour Code of Ukraine, decrees, Presidential decrees, International agreements and laws of the USSR. Some of these regulations and legislation need to be revised and amended in order to bring them in line with contemporary practices and modern standards. It is claimed that since 2017, Ukraine’s government has been implementing the pension reform aimed at relieving the pressure on the working-age population and improving living standards for retired people. In particular, the retirement age has been raised, eligibility criteria for preferential pensions have been revised, and methods for calculating pensions have been changed. The Ministry of Social Policy of Ukraine argues that the new pension reform is expected to enhance social, labour and post-retirement relations, to increase tax revenues through reporting real salaries, to develop a framework of social justice when calculating pensions. The author points out that the regulatory and legislative framework for calculating pensions is outdated at this stage and it requires changes. The considered changes are as follows: the establishment of a working group for entitlement of preferential pensions; the introduction of wage differentials by industries and occupations; the increase of pensions in line with inflation and age; the implementation of notional defined contribution pension system; the introduction of the new Labour Code and Pension Code, which are expected to regulate labour and post-retirement relations and meet modern standards. It is also indicated that continued employment should be enforced by legislation and a system of granting advantages and social security benefits to those who retire later needs to be developed. In terms of legislation, sufficient regard should be given to non-state pension schemes, defined contribution pension systems, and the principle of fairness when it comes to pension entitlements. It is also crucial to adjust pension amounts and retirement age to align with the sustainability ratio and the average life expectancy. Discussion. Further research of regulatory and legal framework for calculating pensions in Ukraine should be focused on the development of the Pension Code and improvement of the existing laws relative to pension calculation and payment. The author also suggests differentiating minimum wages by industries and regions and countering the illicit labour market and campaigning against payments ‘in envelope’, because official wages are the basis for calculating pensions.

scholarly journals REFORMING THE PENSION SYSTEM OF UKRAINE TAKING INTO ACCOUNT THE EXPERIENCE OF POLAND

2021 ◽  
pp. 128-141
Author(s):  
T. Kravchenko ◽  
◽  
O. Moroz ◽  
Keyword(s):  
Banking Sector ◽  
Pension System ◽  
Pension Reform ◽  
Private Insurance ◽  
Private Pension ◽  
Insurance Companies ◽  
Pension Insurance ◽  
Financial Condition ◽  
Development Scenarios ◽  
Investment Returns

The state, stages of formation and problems of the pension system of Ukraine are considered. The main directions of pension reform are identified, taking into account the experience of Poland. The attitude of citizens to the current state and readiness for changes in the pension system of Ukraine is analyzed. The survey showed that the respondents are ready and support the reform of the Ukrainian pension system and the introduction of the accumulative component, but there is a big problem in the form of distrust of private pension funds and private insurance companies. It is determined that the pension system is no longer able to withstand the load and requires changes in the near future. Analysis of the pension system has shown that it has always been formed taking into account only short-term objectives, which makes it ineffective in strategic terms. It is substantiated that without the growth of the welfare of the population, the de-shadowing of the labor market and the introduction of accumulative pension insurance, the financial condition of the Ukrainian solidarity pension system will deteriorate every year. However, along with the expected positive effect of the introduction of the accumulative component in Ukraine, there are also risks, as fluctuations and instability of the domestic economy may lead to deterioration of the banking sector and insurance companies, which will reduce investment returns in the system or even partial loss of pension savings. Two development scenarios (pessimistic and optimistic) for the pension system of Poland and Ukraine are analyzed. It is determined that for the successful reform of the old solidarity system of Ukraine into a cumulative one it is necessary to: ensure sustainable GDP growth; create a centralized information system for collecting contributions; to personify and register all insured persons in the Pension Fund; identify the needs for qualified personnel, equipment and funds needed to meet the requirements of the new system; provide absolutely all conditions for the effective implementation of the private pension system.

Institution of Banking Pension Provisions: Preconditions, Nature, Competition with Traditional Institutions

2015 ◽  
Vol 2015 (2) ◽  
pp. 27-55
Author(s):  
Yuriy Ezrokh
Keyword(s):  
Financial Institutions ◽  
Pension Fund ◽  
Pension System ◽  
Pension Reform ◽  
Banking System ◽  
Pension Funds ◽  
Econometric Analysis ◽  
Traditional Institutions ◽  
State Pension ◽  
Pension Benefits

The article analyzes the pension reform implemented in Russia in 2013–2014, provides the modeling of possible pensions, determines the efficiency boundaries for the use of insurance and savings-insurance schemes offered by the Pension Fund of Russia. The author examines the activities and effectiveness in managing pension savings and reserves from non-state pension funds, especially the system of voluntary savings insurance. The study identifies the challenges faced by these financial institutions, which constrain the development of the Russian pension system. Drawing on logical and econometric analysis the author identifies the competitive opportunity for banks to participate in the Pension Benefits Act, calculates the proposals’ efficiency for future retirees and the banking system as a whole, determines the contribution of the proposed solutions to enhanced competition and more competitive banking environment.

scholarly journals Retirement Planning Behaviour of Working Individuals and Legal Proposition for New Pension System in Malaysia

2016 ◽  
Vol 9 (4) ◽  
pp. 43 ◽  
Author(s):  
Kamal Halili Hassan ◽  
Rohani Abdul Rahim ◽  
Fariza Ahmad ◽  
Tengku Noor Azira Tengku Zainuddin ◽  
Rooshida Rahim Merican ◽  
...  
Keyword(s):  
Private Sector ◽  
Financial Literacy ◽  
Pension System ◽  
Retirement Planning ◽  
Private Pension ◽  
Pension Scheme ◽  
Age Group ◽  
Goal Clarity ◽  
Voluntary Basis ◽  
Private Pension System

<p class="MsoNormal" style="text-align: justify;">Problems have been identified pertaining to retirement scheme of the private sector employees in Malaysia where there is no legislated pension system in force. As a result of that, pension scheme and savings are more of a voluntary basis; although the principle is good but in practice many retirees suffer financially during their retirement. The objectives of this study are to examine factors contributing to individual’s retirement planning behavior and the private pension system in the private sector in Malaysia. Retirement planning behaviour in this study was measured with series of questions on behaviour about retirement planning. A total of 500 working individuals from private sectors in the age group of 40 years and above had participated in this study. The results identified several significant variables in the prediction of retirement planning among working individuals in Malaysia, including individual who had higher levels of education, higher levels of income, financial literacy, retirement goal clarity and attitude towards retirement. There is a correlation between retirement planning behavior and saving for old aged. As a response to the result collected from the survey, a legal proposition is put forward to address issues of pension during retirement among private sector’s employees.</p>

scholarly journals DEVELOPMENT OF NON-STATE PENSION FUNDS OF UKRAINE: PROBLEMS AND PERSPECTIVES

2021 ◽  
Author(s):  
Natalya Tataryn ◽  
Kateryna Zakorko ◽  
Sofia Kozar
Keyword(s):  
Pension Fund ◽  
Pension System ◽  
Public Awareness ◽  
Pension Funds ◽  
The State ◽  
Private Pension ◽  
State Pension ◽  
Private Pension System ◽  
State Pension Funds ◽  
Legal Entities

The article considers topical issues of determining the current state of development of the private pension system in Ukraine, and defines the concept of "private pension fund". In economic essence, the system of non-state pension fund is defined as an integral part of the system of accumulative pension provision, based on voluntary participation of individuals and legal entities in the formation of pension savings in order to receive additional pension contributions. Problems that hinder the development of private pension funds, namely the shadowing of wages and labor relations, lack of public awareness, lack of legislation are identified. The functioning of private pension funds in the country depends not only on reforming the existing pension system, but also on the growth of incomes, their de-shadowing and development of the financial market in general. The current pension system is not able to provide the population with the necessary pension assets. This problem can be solved by intensifying the activities of private pension funds. Emphasis is placed on the need and importance of a voluntary private pension system and its role in ensuring the development of the state economy. As world experience shows, in a market economy, the development of private pension funds is one of the important components to ensure effective functioning of the state. Private pension funds are powerful investment investors because they can mobilize additional investment resources. The main purpose of investing pension assets is to preserve the savings of the population. The main indicators of activity of non-state pension funds are analyzed, namely: pension contributions, pension payments, the number of concluded pension contracts, the amount of investment income, etc. Further trends in the development of private pension provision in Ukraine are noted, substantiated the necessary measures to intensify activities in modern economic conditions, proposed recommendations for solving existing problems of institutions. However, in implementing the proposed measures should be remembered participation of both individuals and legal entities.

scholarly journals The shape of the pension scheme in Poland in the light of the conventional multi-pillar typologies

2019 ◽  
Vol 44 (1) ◽  
pp. 47-65 ◽  
Author(s):  
Tomasz Jedynak
Keyword(s):  
Pension System ◽  
Pension Funds ◽  
Pension Scheme ◽  
Pension Systems ◽  
Reform Implementation ◽  
Four Levels

In recent years, a number of modifications that have a significant impact on the shape of the pension system in Poland are introduced and discussed (e.g. OFE [Open Pension Funds] reform, implementation of the PPK [Employee Capital Plans], introduction of civil pensions, etc.). The result of these changes is that the traditional, three-pillar way of presenting the shape of this system does not reflect its essence any more. On the basis of the typologies of multi-pillar pension systems proposed in the literature, the study propose a new concept for presenting the shape of the general pension system in Poland. It consists of four levels of pension security, distinguished by the criterion of the initiating subject. These levels together form the base and the supplementary part of the pension system.

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