scholarly journals How the Pension System Responds to Pandemic Shocks: A Case Study of Georgia

2021 ◽  
Vol 17 (5) ◽  
Author(s):  
Maka Ghaniashvili
Keyword(s):  
Life Expectancy ◽  
Pension System ◽  
Pension Reform ◽  
Age Distribution ◽  
Financial Strain ◽  
Significant Step ◽  
Pros And Cons ◽  
Pension Benefits ◽  
The Impact ◽  
Fiscal Risks

The paper focuses on the impact of the pandemic crisis on pension system in Georgia and analyzes the pros and cons of the ongoing pension reforms in the country. Decreased birth rates and increased life expectancy over the next decades will significantly change the picture of the age distribution of the population in many countries. As life expectancy increases and the birth rate decreases, more people retire than are added to the workforce. A change in the demographic picture necessitates fundamental pension reform. At the same time, the world is facing a crisis caused by the COVID-19 pandemic. The future is uncertain, both medically and financially. Despite optimistic forecasts, the second wave of the COVID-19 pandemic has begun in many countries which further increases the degree of uncertainty. Funded pension schemes suffer from the crisis because lower returns diminish their asset values, while low yields on public debt instruments increase the present value of their liabilities. This can generate both explicit fiscal risks— in the case of government guarantees—and implicit fiscal risks through lower private pension benefits or financial strain on the sponsoring employers. Our research is focused on the pension system and its development problems in Georgia, taking into account that since 2019, 1st January, the existing financial, demographic and economic challenges have determined the establishment of a new pension system. Main sources for the research are data gathered from the international organizations and local governmental and statistical data softwares. Our research results show that the pension reform launched in 2019 in Georgia is a significant step forward in reducing social imbalances and fiscal pressures in the medium / long term. However, for further development, it is important to systematically assess the effectiveness of pension policies, taking into account factors such as changes in demographic structure, expected fiscal spending, the inequality gap and the crisis caused by the COVID-19 pandemic.

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 You Win Some, You Lose Some: Pension Reform in Bachelet’s First and Second Administrations

2019 ◽  
Vol 11 (2) ◽  
pp. 204-230 ◽  
Author(s):  
Silvia Borzutzky
Keyword(s):  
Political Ideology ◽  
Pension System ◽  
Pension Reform ◽  
Presidential Power ◽  
Pension Policy ◽  
The Will ◽  
The Government ◽  
The Impact ◽  
Government Coalition

This article analyses and compares President Bachelet’s successful efforts to reform the Chilean pension system in 2008 and her failure to achieve the same objective in 2017. The article addresses the impact of electoral promises, policy legacies, policy ideology, presidential power, the role of the private sector, and the role that the government coalitions had in the process of pension reform during the Bachelet administrations. We argue that the 2008 reform was possible because of Bachelet’s personal commitment to reform and the presence of a stable governing coalition that had the will and capacity to legislate. In the second administration, although the policy legacies and ideology had remained the same, the reform did not materialise due to intense conflict within the administration and within the government coalition, as well as conflict between the administration and the coalition. These conflicts, in turn, generated a vicious cycle responsible for Bachelet’s declining popularity, limited political capital, and reduced support for reform. A stagnant economy further undermined these efforts. In brief, this article argues that when assessing success and failure in pension policy reform it is important to analyse not only policy legacies and political ideology but also the strength of the executive, the cohesion of the governing coalition, and the country’s economic performance.

scholarly journals Informality and the Challenge of Pension Adequacy

2019 ◽  
Vol 19 (149) ◽  
pp. 1
Author(s):  
Christoph Freudenberg ◽  
Frederik Toscani
Keyword(s):  
Pension System ◽  
Pension Reform ◽  
Positive Impact ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Real Rate ◽  
Labor Market Reform ◽  
The Impact ◽  
Term Labor ◽  
Pension Adequacy

Past reforms have put the Peruvian pension system on a largely fiscally sustainable path, but the system faces important challenges in providing adequate pension levels for a large share of the population. Using administrative microdata at the affiliate level, we project replacement rates in the defined benefit (DB) and defined contribution (DC) pillars over the next 30 years and simulate the impact of various reform scenarios on the average level and distribution of pensions. In the DB pillar, the regressive minimum contribution period should be re-thought, while in the DC pillar a broadening of the contribution base and/or an increase in contribution rates would help increase replacement rates relative to the baseline forecast of 25-33 percent. A higher net real rate of return than assumed in the baseline would also have a significant positive impact. In the medium-term, labor market reform to tackle informality, and a broad pension reform to restructure the system and avoid competition between the DB and DC pillars should be a priority. Given low pension coverage, having a strong non-contributory pillar will remain important for the foreseeable future.

Fair Cuts? The Impact of British Public Service Pension Reform on Workers in the Main Occupations

2012 ◽  
Vol 12 (1) ◽  
pp. 105-122
Author(s):  
Paul Bridgen ◽  
Traute Meyer
Keyword(s):  
Public Sector ◽  
Public Service ◽  
Pension System ◽  
Pension Reform ◽  
Average Salary ◽  
Reform Initiatives ◽  
Working Lives ◽  
Recent Reform ◽  
Post War ◽  
The Impact

Public service pensions have been a fundamental component of the British pension system in the post-war period and recent reform initiatives have caused political controversy. This article assesses the impact of the Conservative/Liberal government's public sector pension reform plans of 2011 for different public sector workers. It simulates their projected pension outcomes, assuming people contribute to the new system throughout their working lives. In particular, we examine the government's claim that the move away from final to average salary schemes will make pensions fairer for women and lower paid workers. The article shows that the reforms are indeed fair, if measured by the government's standards: retirement is delayed for all, but the lowest skilled and women lose least and some even gain higher pensions without paying proportionately more. Despite austerity, recent British pension reforms reflect a greater awareness of social inequality than many would expect and they have been built on more cross-party agreement than apparent at first sight.

Demographic change, PAYG pensions and child policies

2016 ◽  
Vol 17 (4) ◽  
pp. 469-487 ◽  
Author(s):  
PETER JOSEF STAUVERMANN ◽  
RONALD RAVINESH KUMAR
Keyword(s):  
Life Expectancy ◽  
Open Economy ◽  
Pension System ◽  
Small Open Economy ◽  
Overlapping Generations Model ◽  
Number Of Children ◽  
Payg Pensions ◽  
Child Allowances ◽  
Pension Benefits ◽  
Consequent Increase

AbstractThe aim of the paper is to investigate how child policies affect the population growth and to what extent these policies are useful to increase pension benefits of a pay-as-you-go pension system in a small open economy. Specifically, we analyze two different child policies: the provision of child allowances and an educational subsidy. We apply an overlapping generations model in its canonical form, where we consider endogenous fertility, endogenous growth and endogenous aging of the society. From the analysis, we conclude that with a child allowance, there is a consequent increase in the number of children and decrease in pension benefits and life expectancy. On the other hand, we note that with an educational subsidy, there is a decrease in the number of children, and an increase in the pension benefits and the life expectancy, respectively. The model developed aims to complement the models of the Unified Growth Theory.

scholarly journals Pension reform in an OLG model with heterogeneous abilities

2015 ◽  
Vol 16 (2) ◽  
pp. 144-172 ◽  
Author(s):  
TIM BUYSE ◽  
FREDDY HEYLEN ◽  
RENAAT VAN DE KERCKHOVE
Keyword(s):  
Human Capital ◽  
Open Economy ◽  
Pension System ◽  
Pension Reform ◽  
Labor Income ◽  
Replacement Rate ◽  
Welfare Losses ◽  
Low Weight ◽  
Pension Benefits ◽  
Low Ability

AbstractWe study the effects of pension reform on hours worked, human capital, income and welfare in an open economy populated by four overlapping generations: three active generations (the young, the middle aged and the older) and one generation of retired. Within each generation we distinguish individuals with high, medium or low ability to build human capital. Our simulation results prefer a pay-as-you-go pension system with a particular earnings-related linkage above a fully-funded private system. This pay-as-you-go system conditions pension benefits on past individual labor income, with a high weight on labor income earned when older and a low weight on labor income earned when young. Uncorrected, however, such a system implies welfare losses for current low-ability generations and rising inequality. Complementing or replacing it by basic and/or minimum pension components is negative for aggregate employment and welfare. Better is to maintain the tight link between individual labor income and the pension also for low-ability individuals, but to strongly raise their replacement rate. An additional correction improving the welfare of low-ability individuals would be to maintain for these individuals equal weights on past labor income.

scholarly journals Features of the pension system, the impact on the level, quality, and life expectancy

2019 ◽  
pp. 70-74
Author(s):  
Guliya Ibragimova ◽  
Elena Gerkina ◽  
Dayana Yakupova
Keyword(s):  
Life Expectancy ◽  
Pension System ◽  
The Impact

scholarly journals PROS AND CONS OF PENSION REFORM- GEORGIAN CASE

2020 ◽  
pp. 91-95
Author(s):  
ZURAB MUSHKUDIANI ◽  
DAVID MAMRIKISHVILI ◽  
IRAKLI GACHECHILADZE
Keyword(s):  
Current Issue ◽  
Pension System ◽  
Pension Reform ◽  
Economic Environment ◽  
The Public ◽  
Long Time ◽  
Heavy Burden ◽  
Pros And Cons ◽  
State Pension ◽  
Over Time

The paper studies pension reform in Georgia which has been going on since the 1990s, evolving over time and taking a modern look. The axiom is that the pension system in our country needed to be upgraded. The discussion on the current issue has been going on for a long time and the topic does not lose its relevance today. The establishment of a liberal economic environment can be considered as the basis for the accumulation of «accumulated pensions» in our country. Like all recent reforms, there are supporters and opponents of the reform, but unfortunately, for a number of reasons, the public expresses distrust and views the reform as a step backward. It is clear that pensioners› reliance on the basic state pension is a heavy burden for the country›s budget.

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.

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