scholarly journals How Does Mortality Contribute to Lifetime Pension Inequality? Evidence From Five Decades of Swedish Taxation Data

2021 ◽  
Author(s):  
Jiaxin Shi ◽  
Martin Kolk
Keyword(s):  
Pension System ◽  
Socioeconomic Groups ◽  
Income Transfers ◽  
Pension Income ◽  
System P ◽  
Pension Benefits ◽  
Inequalities In Mortality ◽  
Pension Payments ◽  
Total Inequality ◽  
Taxation Data

As with many social transfer schemes, pension systems around the world are often progressive: individuals with lower incomes receive a higher percentage of their income as a subsequent pension. On the other hand, it is well known that those with lower earnings have higher mortality and thus accumulate fewer years of pension income. These opposite factors, therefore, both contribute to the progressiveness of a given pension system. Thus far, empirical research efforts to disentangle the effects of mortality inequality on lifetime pension income have been scarce. To close this gap, we use Swedish taxation data linked with death registers from 1970 to 2018 to study how education and pre-retirement earnings relate to lifetime pension income from age 60 onwards, as well as how inequalities in mortality between groups contribute to overall inequalities in lifetime pension income. The results show that both a progressive replacement structure and mortality differentials contribute to the overall distribution of life-course pension payments. A substantial proportion of the total inequality in lifetime pensions can be attributed to the fact that socially advantaged groups live longer, and this is particularly true for men. Mortality differences can explain up to 28% of the lifetime pension benefits between socioeconomic groups. We conclude that inequalities in mortality play an important part in determining the overall degree of between-group income transfers in a pension system.

scholarly journals Closing the gender gap in pensions: A microsimulation analysis of the Norwegian NDC pension system

2018 ◽  
Vol 29 (1) ◽  
pp. 130-143 ◽  
Author(s):  
Elin Halvorsen ◽  
Axel West Pedersen
Keyword(s):  
Gender Gap ◽  
Economies Of Scale ◽  
Pension System ◽  
Personal Income ◽  
Defined Contribution ◽  
Pension Income ◽  
System A ◽  
Actuarial Fairness ◽  
Annual Earnings ◽  
Pension Benefits

In this article, we use an advanced microsimulation model to study the distributional effects of the reformed Norwegian pension system with a particular focus on gender equality. The reformed Norwegian system is based on the notional defined contribution (NDC)-formula with fixed contribution/accrual rates over the active life-phase and with accumulated pension wealth being transformed into an annuity upon retirement. A number of redistributive components are built into the system: a unisex annuity divisor, a ceiling on annual earnings, generous child credits, a possibility for widows/widowers to inherit pension rights from a deceased spouse, a targeted guarantee pensions with higher benefit rates to single pensioners compared to married/cohabitating pensioners, and finally a tax system that is particularly progressive in its treatment of pensioners and pension income. Taking complete actuarial fairness as the point of departure, we conduct a stepwise analysis to investigate how these different components of the National Insurance pension system impact on the gender gap in pensions and on general (Gini) inequality in the distribution of pension income within a cohort of pensioners. Our analysis concentrates on one birth cohort – individuals born in 1963 – and we study three different outcomes: the distribution of annual pensions early in retirement (at age 70), the distribution of the total sum of pension benefits received over retirement, and the distribution of the average annual pension benefits received over the retirement phase. In addition, we look at three alternative income concepts. These are personal income, equivalised household income, and finally an original income concept developed for this study: personal income adjusted for the economies of scale enjoyed by couple households.

Social security, income inequality and growth

2011 ◽  
Vol 11 (1) ◽  
pp. 53-70 ◽  
Author(s):  
GILLES LE GARREC
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Low Income ◽  
Pension System ◽  
Industrial Countries ◽  
Lifetime Income ◽  
Actuarial Fairness ◽  
Retirement Systems ◽  
Pension Benefits ◽  
Shed Light

AbstractIn most industrial countries, public pension systems redistribute from workers to retired people, not from high-income to low-income earners. They are close actuarial fairness. However, they are not all equivalent. In particular, some pension benefits are linked to full lifetime average earnings, while others are only linked to partial earnings history. In the latter case, we then show in this article that an actuarially fair pay-as-you-go pension system can both reduce lifetime income inequality and enhance economic growth. We also shed light on the dilemma between inequality and economic growth in retirement systems: greater progressivity results in less lifetime inequlity but also less growth.

De pensioenbescherming van flexibele werknemers in België

2006 ◽  
Vol 22 (2) ◽  
Author(s):  
Annelies Debels ◽  
Hans Peeters ◽  
Gert Verschraegen ◽  
Jos Berghman
Keyword(s):  
Statistical Analysis ◽  
Old Age ◽  
Pension System ◽  
Panel Study ◽  
Research Strategy ◽  
The Third ◽  
Temporal Flexibility ◽  
Part Time ◽  
Coordinated Regulation ◽  
Pension Benefits

Old age protection of flexible workers in Belgium Old age protection of flexible workers in Belgium This article investigates to what extent the Belgian pension system is adapted to the proliferation of a-typical forms of employment. Are there any differences between the old age protection of flexible and non-flexible workers? What are the effects of flexible employment on participation in the three pension pillars and on the level of pension benefits? To answer these questions, the article pursues a double research strategy: an analysis of Belgian legislation and relevant collective labour agreements is complemented with a statistical analysis on the Panel Study of Belgian Households (PSBH). The analyses show that part-time employment results in a lower pension, while other forms of temporal flexibility such as temporary leave arrangements and temporary unemployment do not. In the second pillar we find that contractual and transitional flexible workers are discriminated. Finally, the results indicate that flexible workers do not compensate for lower pension protection through increased participation in the third pension pillar. Our findings suggest that a re-assessment of the system of ‘assimilated’ periods is required, as well as the development of a system of coordinated regulation for the three pension pillars.

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 Standardization of implementation of the mandatory privately managed pillar of the pension system of Ukraine

2021 ◽  
Vol 2021 (2) ◽  
pp. 114-130
Author(s):  
Anastasiia SVIRIDOVSKA ◽  
Keyword(s):  
Single Mothers ◽  
Old Age ◽  
Chernobyl Accident ◽  
Pension System ◽  
Real Effect ◽  
The Third ◽  
The World ◽  
Legislative Changes ◽  
State Pension ◽  
Pension Benefits

According to the current legislation, the modern Ukrainian pension system is not yet fully formed. In Ukraine, PFC contributions currently form a source of pension benefits for citizens. The solidarity pension system is crumbling . That is, as in the rest of the world, the nation is aging, the share of retirees is growing, and there is less able-bodied population. The search for new ways to save for old age is in the direction of creating a mandatory accumulation under the supervision of the state. Thus, today, a second level of the pension system, mandatory accumulative component, and a rather underdeveloped and unpopular non-state pension system, which forms the third level of the national pension system, do not function. However, in 2020, the work on the concept and bill on the mandatory savings system was intensified. Its introduction is seen as a tool that can increase both the level of pensions and their differentiation. But the world experience of such reforms shows that the real effect on payments from the savings system will have to wait at least 15-20 or even 25 years. The article examines the issue of introducing a funded pension level at the legislative level. According to the results of an expanded analysis of 19 draft laws on reforming the current pension legislation and proposals for new laws on these issues in the period from 2018 to 2021, we can conclude that there is no single concept of amending legislation, so most bills are either withdrawn or sent for further refinement. Currently, various aspects of the pension system of Ukraine are regulated by a large number of legislative acts, so there are signs of dispersion in these draft legislative changes. Most of the bills are developed to enhance the welfare of certain categories of citizens, including servicemen, single mothers, victims of the Chernobyl accident, war veterans and more. The issues of the accumulative pension system are mainly raised in the bills of 2020–2021.

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.

Financialisation and social protection? The UK’s path towards a socially protective public–private pension system

2019 ◽  
pp. 47-70
Author(s):  
Paul Bridgen
Keyword(s):  
Current Literature ◽  
Social Protection ◽  
Pension System ◽  
Financial Sector ◽  
Private Pension ◽  
Social Regulation ◽  
Defined Contribution ◽  
Public Provision ◽  
Private Provision ◽  
System P

Consideration of pension financialisation in recent years has focused on the rise of defined contribution pensions, highlighting the greater level of individualised interaction this has encouraged between citizens and the financial sector. This development has generally been seen as unequivocally neo-liberal, complementary to retrenching reforms replacing private provision for public. This chapter, in contrast, argues for a less rigid, more fluid understanding of UK pension financialisation, one that has entailed the interaction of financialising and progressive social protection agendas in a politics more diverse and negotiated than proposed in the current literature. The result in 2019 is a UK public-private pension mix under which at least some traditional social protection objectives are met through social regulation rather than public provision. To emphasise the continuing role for agents in today’s system, the paper finishes by proposing two ambitious, but feasible, regulatory reforms designed to enhance the system’s socially protective features.

scholarly journals A new approach for satisfactory pensions with no guarantees

2019 ◽  
Vol 10 (1) ◽  
pp. 3-21
Author(s):  
M. Carmen Boado-Penas ◽  
Julia Eisenberg ◽  
Axel Helmert ◽  
Paul Krühner
Keyword(s):  
Risk Management ◽  
Interest Rates ◽  
Asset Management ◽  
Expected Return ◽  
New Approach ◽  
Low Interest Rates ◽  
Key Variables ◽  
Pension Benefits ◽  
Pension Payments ◽  
Over Time

AbstractThe increase in longevity, the ultra-low interest rates and the guarantees associated to pension benefits have put significant strain on the pension industry. Consequently, insurers need to be in a financially sound position while offering satisfactory benefits to participants. In this paper, we propose a pension design that goes beyond the idea of annuity pools and unit-linked insurance products. The purpose is to replace traditional guarantees with low volatility, mainly achieved by collective smoothing algorithms and an adequate asset management. With the aim of offering security to the insured, we discuss the optimisation of some key variables of the proposed pension product to target both a satisfactory level of the initial pension and stable pension payments over time. By combining such well-known products as unit-linked and annuities, we show that it is possible to design a pension product with both high-expected return and low risk for the policyholder. However, differently than in the classical unit-linked framework, we do not allow the individuals to choose the underlying funds. Instead, the funds are under the surveillance of an insurance company’s professional risk management, which induces better informed decisions.

“Benefit of the Doubt”: African-American Civil War Veterans and Pensions

2008 ◽  
Vol 38 (3) ◽  
pp. 377-399 ◽  
Author(s):  
Larry M. Logue ◽  
Peter Blanck
Keyword(s):  
African American ◽  
Civil War ◽  
African Americans ◽  
Pension System ◽  
American Civil War ◽  
Early Years ◽  
Union Army ◽  
War Veterans ◽  
Pension Income ◽  
Two Stages

Laws that provided pensions for Union army veterans were putatively color-blind, but whites and African Americans experienced the pension system differently. Black veterans were less likely to apply for pensions during the program's early years. Yet, no matter when they applied, they encountered two stages of bias, first from examining physicians and then, far more systematically, from Pension Bureau reviewers. The evidence suggests that pension income reduced mortality among African-American veterans, underscoring the tangible results of justice denied.

scholarly journals The Main Reasons and Goals of the Pension Reform in Georgia

Economics ◽  
2021 ◽  
Vol 104 (3-5) ◽  
pp. 7-16
Author(s):  
Nato Gegenava Nato Gegenava ◽  
Tamar Abuashvili Tamar Abuashvili
Keyword(s):  
Pension Fund ◽  
Pension System ◽  
Pension Reform ◽  
Power Level ◽  
State Funding ◽  
Retirement Age ◽  
Subsistence Level ◽  
Pension Income ◽  
Social Pension

The concept of pension reform is a government’s plan to improve the pension system and reflects the long-term risks and takes into account the socio-economic reality in the country. The aim of the reform is to protect better existing retirees from poverty through indexation, which is guaranteed to maintain the retiree's purchasing power level; Providing the next generation of retirees with a higher pension income, which will be directly proportional to the income received during the employment period and the profit of the pension fund. The private pension system will allow employed citizens to plan better their retirement age and not depend only on state funding and be able to mobilize a certain amount before reaching retirement age. The need for reform stems from negative factors such as: an increase in the number of people of retirement age, a decrease in the birth rate, a decrease in the working age population, migration processes, etc. Analysis of the existing system show that it is impossible to maintain or improve the existing replacement ratio only in the medium and long term at the expense of state funding. The private accumulation model will be an additional component of the pension system, which will contribute to a significant increase in the replacement rate. The existence of a private accumulation system will make it possible to define better the fundamental principle of social pension, which implies protection of the population of retirement age from poverty. To achieve this goal, it is important that the social pension does not fall below the subsistence level and also that the pension should be increased at least in parallel with inflation or in the event of economic growth above inflation. Keywords: Pension system, Reform, Pension fund, Government, Population.

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