scholarly journals Mortality dynamics and the statutory retirement age proposal: an actuarial view

2020 ◽  
Vol 31 (82) ◽  
pp. 165-179
Author(s):  
Filipe Costa de Souza
Keyword(s):  
Life Expectancy ◽  
Social Security ◽  
Pension System ◽  
Fair Value ◽  
Original Text ◽  
Retirement Benefit ◽  
The Social ◽  
Minimum Age ◽  
Actuarial Model

ABSTRACT This paper aimed to apply (dynamic and static) actuarial models to calculate the balanced contribution rates for the planned (at the minimum age) retirement benefit of the General Social Security System, based on the original and substitutive texts of the reform proposed by Michel Temer’s government. Even with the regular increases in life expectancy and the long-term nature of the analyses, national studies on social security are typically based on the static mortality hypothesis. The relevance of this study is evident due to the demographic changes, particularly the increase in life expectancy, experienced by the Brazilian population in recent decades and which put in question the sustainability of the national pension system. The use of dynamic actuarial models allows for more accurate discussions about the future of social security, besides contributing to the still scarce national literature. Static and dynamic actuarial models were applied to a representative individual, adjusting mortality tables from the United Nations covering 1950 to 2100. It was verified that the actuarially fair rates calculated by the dynamic actuarial model are typically higher than those obtained by the static model, especially for women. This difference is expected to increase as gains in life expectancy become more influenced by the reduction in mortality at more advanced ages. Moreover, if the social security reform is approved (in accordance with either the original or the substitutive text), there are indications from the dynamic model that the contributions rates currently charged would be excessive for men. In turn, these rates would be excessive for women considering the original text, and closer to the actuarially fair value considering the substitutive text. The development, disclosure, and regular updating of official dynamic tables (whether for mortality or other biometric assumptions) are also recommended.

scholarly journals An Analysis on Social Security in Brazil Based on Maranhão

2020 ◽  
Vol 11 (1) ◽  
pp. 1
Author(s):  
Fernando Silva Lima ◽  
Alessandra Silva Pires ◽  
Francisco De Assis Pereira Filho ◽  
Michelle Matilde Semiguem Lima Trombini
Keyword(s):  
Social Security ◽  
Economic Crisis ◽  
Pension System ◽  
Pension Reform ◽  
Constitutional Amendment ◽  
Retirement Age ◽  
Men And Women ◽  
Financial Situation ◽  
The Social ◽  
Minimum Age

This study begins with the question: can the new change in the old-age pension system improve the economic-financial performance of the National Institute of Social Security in Brazil? The hypothesis is that the proposed constitutional amendment (PEC) 287/16, which is being presented at the Chamber of Deputies known as the pension reform, including an attempt to change the minimum age for men and women, will not solve the problem of economic crisis and financial expenses of the National Institute of Social Security of Brazil, due to the fact that the greatest impact may be other expenses not identified in this study that revolve around the benefits of retirement. The general objective is to analyze the economic and financial situation of social security in Brazil based on the regional accounting records located in Imperatriz and São Luís do Maranhão between 2008 and 2017. The methodology was defined as descriptive, explanatory and average, such as bibliofigurey, documentary and field. One of the results regarding the increase in the retirement age shows that there is no relation between the income increase indicators when compared to the surplus (profit) or deficit (loss) between 2008 and 2017 in the Social Security of Maranhão.

scholarly journals Heterogeneous Scarring Effects of Full-Year Nonemployment

2017 ◽  
Vol 107 (5) ◽  
pp. 369-373 ◽  
Author(s):  
Fatih Guvenen ◽  
Fatih Karahan ◽  
Serdar Ozkan ◽  
Jae Song
Keyword(s):  
Social Security ◽  
Low Income ◽  
Social Security Administration ◽  
Earnings Distribution ◽  
Employment Effects ◽  
Long Period ◽  
Earnings Losses ◽  
The Social ◽  
Scarring Effects

Drawing on administrative data from the Social Security Administration, we find that individuals that go through a long period of non-employment suffer large and long-term earnings losses (around 35-40 percent) compared to individuals with similar age and previous earnings histories. Importantly, these differences depend on past earnings, and are largest at the bottom and top of the earnings distribution. Focusing on workers that are employed 10 years after a period of long-term non-employment, we find much smaller earnings losses (8-10 percent). Furthermore, the large earnings losses of low-income individuals are almost entirely due to employment effects.

scholarly journals Reliance on long-term care as a “new” social risk in national and EU law

2020 ◽  
Vol 123 ◽  
pp. 87-101
Author(s):  
Grega Strban ◽  
Sara Bagari
Keyword(s):  
Life Expectancy ◽  
Social Protection ◽  
Long Term Care ◽  
Social Risk ◽  
Eu Law ◽  
Term Care ◽  
The Social ◽  
Different Parts ◽  
The Eu

There have always been people who cannot take care of their daily needs and are reliant on care. However, due to higher life expectancy and low birth rates, changes in lifestyle and increased mobility, reliance on long-term care is becoming a general risk in life. Therefore, it must be provided with social protection. In this respect, the criteria for shaping the (new) social risk of reliance on long-term care are also fulfilled. Although different benefits are already provided within different parts of the social security system, the paper discusses that the best option is to define reliance on long-term care as an independent social risk. Furthermore, we must ensure that providing long-term care will not turn out to be a double social risk. The issue has to be addressed at the national and at the EU level.

scholarly journals Demographic forecasting of population projection in Greece: A Bayesian probabilistic study

2019 ◽  
Vol 29 (Supplement_4) ◽  
Author(s):  
D Lamnisos ◽  
K Giannakou ◽  
T Siligari
Keyword(s):  
Public Health ◽  
Life Expectancy ◽  
Total Fertility Rate ◽  
Total Population ◽  
Fertility Rate ◽  
Replacement Level ◽  
Demographic Aging ◽  
The Social ◽  
Support Ratio

Abstract Background Demographic aging is an emerging issue in Greece, characterized by low fertility and increased life expectancy. Undoubtedly, demographic aging is a challenge for public health not only due to the financing of public pensions, but also for the increasing utilization of health care. Methods The total fertility rate and life expectancy at birth are projected probabilistically using Bayesian hierarchical models and United Nations population data for Greece from the period of 1950 to 2015. These are then converted to age-specific mortality rates and combined with a cohort component projection model. This yields probabilistic projections of total population by sex and age groups, total fertility rate (TFR), female and male life expectancies at birth and potential support ratio PSR (persons aged 20-64 per person 65+) by the year 2100. Results The total population in Greece in 1950 was around 7.5 million, increasing to 11 million based on the 2011 population census but is projected to decline to 7.5 million at 2100. TFR has followed a strong downward trend with 1.4 children per woman in 2005-2010 and is projected to have a slight increase to 1.6 and 1.8 children per woman for 2050 and 2100 with all values being below the replacement-level fertility. Life expectancy is expected to increase to 84 years for men and 88 years for women in 2050, and 90 years for men and 94 years for women in 2100. PSR is expected to decline dramatically from 3 in 2011 to approximately 1.5 in 2050 and 2100. Conclusions Over the years, Greece has lost its youthful structure and has acquired the characteristics of an aging population, reflecting the population distribution of Western countries. Demographic aging is harmful for the economic growth, the social security system, the social assistance, and it is closely linked to national defense and public health. A long-term multidimensional program is recommended to confront the demographic issue based on the previous international experience. Key messages Total fertility rate will be below replacement level and potential support ratio will decline dramatically. A long-term multidimensional program needs to be developed to address the demographic aging.

scholarly journals Actuarial fairness in social security calculations: application of a multiple decrement model to compare the social security factor and minimum age rules

2018 ◽  
Vol 29 (78) ◽  
pp. 469-486
Author(s):  
André Luiz Lemos Andrade Gouveia ◽  
Filipe Costa de Souza ◽  
Leandro Chaves Rêgo
Keyword(s):  
Social Security ◽  
Constitutional Amendment ◽  
Social Welfare Policy ◽  
Social Security Reform ◽  
Standard Family ◽  
The Social ◽  
Actuarial Fairness ◽  
Minimum Age ◽  
Current Scenario ◽  
Social Security Benefits

Abstract It has been shown that under the social security factor rule current contribution rates are insufficient to cover social security benefits, since the actuarially fair rates are 30.69% and 35.27% for men and women, respectively. However, if the social security reform were approved as submitted, the fair rates would be reduced to 22.25% and 21.60%, respectively. Besides the minimum age, part of this reduction is due to the proposed rules allowing pension values lower than the minimum wage. These results served the objective of this work, which was to compare the actuarially fair social security rates for the General Social Welfare Policy (GSWP), based on the social security factor rules and the minimum age proposal present in Proposed Constitutional Amendment n. 287/2016. The demographic changes that have taken place in Brazil in recent years raise questions about the sustainability of the national social security system and approving social security reform has been a government priority. Therefore, there is an undisputed need for an actuarial study that calculates actuarially fair rates and compares the current scenario with the reform proposals. Multiple decrement actuarial models were used to calculate the fair rates considering a standard family (25-year-old worker, spouse, and two children), in which the man is three years older than the woman. The IBGE 2015 Extrapolated (mortality) and Álvaro Vindas (disability) tables were adopted as biometric assumptions, and a real wage growth rate of 2% p.a. and real interest rate of 3% p.a. were used.

Nicaragua protests signal dialogue, not regime change

2018 ◽  
Keyword(s):  
Law Enforcement ◽  
Social Security ◽  
Regime Change ◽  
Investment Decisions ◽  
Security Forces ◽  
Content Type ◽  
The Social ◽  
Social Security Reforms ◽  
Economic Slowdown

Significance The protests pose the greatest threat to President Daniel Ortega since he took power in 2007. The president’s eventual withdrawal of the social security reforms that had sparked the unrest has, instead of restoring order, emboldened protesters, who are now pushing for further political concessions and have called for a mass anti-government demonstration to be held tomorrow. Impacts Businesses may postpone investment decisions until after the national dialogue, posing a risk of economic slowdown. Damage to the reputation of the security forces threatens to foster long-term resentment, undermining law enforcement. The protests may spur anti-corruption protests in other parts of the region, such as Guatemala.

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 The social security reform process in Italy: where do we stand?

2004 ◽  
Vol 3 (2) ◽  
pp. 165-195 ◽  
Author(s):  
AGAR BRUGIAVINI ◽  
VINCENZO GALASSO
Keyword(s):  
Social Security ◽  
Pension System ◽  
Social Security System ◽  
Economic Incentives ◽  
Security System ◽  
The Political ◽  
Reform Process ◽  
Italian Population ◽  
Positive Effects ◽  
The Social

A reform process is underway in Italy. Achieving financial sustainability of the social security system has been the first objective characterizing the reforms of 1990s, but these have also introduced rules which aim at a more actuarially fair system. Indeed the social security system prevailing in Italy, financed on a PAYG basis, was, at the end of the 1980s, clearly unsustainable and also extremely unfair to some group of workers, enacting a form of perverse redistribution which is typical of ‘final salary’ defined benefit systems. It was also a system characterized by strong incentives to retire early.In this paper we briefly describe the different regimes of the Italian pension system in its recent history and focus on some aspects of the reform process taking place during the 1990s. Since economists and policy makers are still struggling to assess the results and the long-term effects of these reforms we provide both a survey of this debate and some fresh evidence on the evaluation of the policy changes. We carry out this analysis with a particular emphasis on two aspects which are relevant in the debate. On the one hand we stress the role of economic incentives and the overall fiscal implications of changing the systems as well as these incentives. On the other hand we emphasize the intergenerational considerations and the political implications of the ageing process of the Italian population. From our description it emerges that the overall design of the Italian reform is probably a good one, and yet some more steps need to be taken to speed up some of the positive effects of the reform process that, due the adverse demographic trends affecting PAYG systems as well as the political arena, could easily evaporate.

scholarly journals REFORMS OF FINANCING PENSION INSURANCE SYSTEM IN CONDITIONS OF TRANSITION

2017 ◽  
Vol 1 (12) ◽  
pp. 51
Author(s):  
Aleksandar Stojanović
Keyword(s):  
Old Age ◽  
Pension System ◽  
Pension Reform ◽  
Current System ◽  
Intergenerational Solidarity ◽  
Pension Insurance ◽  
Current State ◽  
The Social ◽  
Pension Insurance System

A serious crisis of the pension system has been present in Bosnia and Herzegovina, as well as in many other countries for many years. The current system, which functions on the concept of intergenerational solidarity is financially unsustainable, due to negative demographic and economic movements, as well as reduced number of the employed, and an increase in the number of pensioners. As the main objective of the pension system (the social security of citizens, ie protection against the risk of old age, disability and death) is not fulfilled, it seems that the reform of the pension system is necessary. It is necessary to answer the question: how to transform the pension system of intergenerational solidarity in a system of individual capitalized savings in a socially painless and affordable way?! The implementation of the pension reform aims to establish a long-term sustainable pension system that will provide quality protection from risk, old age, death, disability, and at the same time be consentaneous with economic and demographic movements andensure an adequate level of benefit to citizens in the later age.The aim of the paper is to define the wider, objective picture of the current state of the position of the pension system, as well as providing basic guidelines for the reform and development courses in the future.

scholarly journals Privatizing Social Security: Advisable But It Can Be A Roller-Coaster Ride To The U.S. Taxpayer

2014 ◽  
Vol 12 (4) ◽  
pp. 385
Author(s):  
Mahamood M. Hassan
Keyword(s):  
Social Security ◽  
Stock Market ◽  
Future Generations ◽  
Roller Coaster ◽  
Treasury Bonds ◽  
The Social ◽  
The 1960S ◽  
The One ◽  
The U.S

The ability of the Social Security retirement program to pay the promised benefits to future generations has been debated since the 1960s. Various suggestions have been made, but the one that has attracted the most passionate opinions has been whether some or all of the Social Security Trust Funds should be invested in the stock market, which would yield higher returns than on the Federal government issued bonds (Treasury Bonds). In reviewing 88 years of financial market data going back to 1926, the author shows that investing in the stock market (using the S&P 500 as the proxy) will most probably produce higher returns for the U.S. taxpayer (investor) over the long term, but the investor will have to be prepared for a roller-coaster ride of highs and lows.

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