Private Pension Funds' Problems

2004 ◽  
pp. 123-131
Author(s):  
O. Khmyz
Keyword(s):  
Financial Markets ◽  
Pension System ◽  
Pension Funds ◽  
Private Pension ◽  
System Reform ◽  
Financial Assets ◽  
The Past ◽  
Funds Management ◽  
Further Development

Private pension funds in Russia have been growing in number dramatically over the past few years. The increasing importance of private pension funds as holders of financial assets means that their impact on the functioning of financial markets is steadily growing. The article discusses the range of factors that can stimulate further development of the pension system reform — principles of private professional pensions' regulation as well as the structure and mechanisms of pension funds' management.

China pension reforms create new markets

2018 ◽  
Keyword(s):  
Financial Markets ◽  
Pension System ◽  
Pension Funds ◽  
Private Pensions ◽  
Demographic Ageing ◽  
Content Type ◽  
The Past ◽  
Pension Schemes ◽  
Urban And Rural Residents ◽  
The Government

Subject China's pension system. Significance The government on July 1 launched a scheme to redistribute pension funds from rich provinces with surpluses to poor ones with deficits. Pressure on the pension system is one result of rapid demographic ageing -- one of the most pressing issues facing China's government. The gap between pension contributions and benefits paid out could approach 100 billion dollars by 2020. Various reforms over the past few months aim to make pension schemes more sustainable. Impacts Private and commercial insurance, now encouraged by Beijing, will likely grow rapidly in the coming years. Insurance products and public pension funds investing in equities will contribute to the development of China's financial markets. The minimum benefits for the rural basic pension will rise, but enormous imbalances will persist between urban and rural residents. Although not currently open to foreign players, a huge market in private pensions could open in the future as the industry matures.

scholarly journals Challenges and Perspectives of Development of Private Pension Funds in Serbia

2019 ◽  
Vol 52 (1) ◽  
pp. 69-80
Author(s):  
Marija Đekić ◽  
Miloš Nikolić ◽  
Tamara Vesić
Keyword(s):  
Pension System ◽  
Private Insurance ◽  
Pension Funds ◽  
Private Pension ◽  
Successful Implementation ◽  
Pension Insurance ◽  
The World Bank ◽  
Investment Opportunities ◽  
Further Development ◽  
Compulsory State

Following the successful implementation of the Chilean reform, the World Bank proposed a solution from three pillars of the pension system: compulsory state, compulsory private and voluntary private pension insurance. Serbia, like many other developed and undeveloped countries, has only adopted the third pillar, in addition to the already existing state. The introduction of compulsory private insurance was also considered, however, there are no market conditions or financial possibilities for achieving this idea. Voluntary pension funds in Serbia were introduced by the 2005 laws. There are seven voluntary pension funds in Serbia, managed by four management companies. So far, the funds have achieved positive yields, although due to limited investment opportunities, these rates were very modest. In addition to limited investment opportunities, one of the problems is the accumulation of funds. The problem of population savings has many sides, and it is certain that some of the causes can be sought in bad experiences from the past. The paper analyzes the limitations and possibilities for further development of private pension funds.

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 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 COMPREHENSIVE ANALYSIS OF REGULATORY IMPACTS ON PERFORMANCE OF SLOVAK PENSION FUNDS

2021 ◽  
Vol 22 (3) ◽  
pp. 735-756
Author(s):  
Mário Papík ◽  
Lenka Papíková
Keyword(s):  
Pension System ◽  
Factor Model ◽  
Five Factor Model ◽  
Pension Funds ◽  
Private Pension ◽  
Government Interventions ◽  
Regulatory Interventions ◽  
Market Factors ◽  
Fama And French ◽  
Sustainability Challenges

Standard pay-as-you-go pension system is facing long-term and short-term sustainability challenges in several countries. Possible replacement of standard pension system might be in a form of private pension savings. Private pension savings are meaningful only if they provide sufficiently high returns. The aim of this manuscript is to analyse performance of Slovak pension funds and factors impacting this performance, especially government interventions. This manuscript is focused on enhanced Carhart four-factor model, Bollen and Busse four-factor model, and Fama and French five-factor model based on 23 pension funds from Slovakia from period starting September 2012 and ending September 2019. These models have been extended by other variables describing bond market factors and impact of regulatory interventions on performance of pension funds. Results of analysis have proved that legislative interventions have impact on performance of analysed pension funds. Each legislative intervention has caused average daily yield to decrease by about 0.01% to 0.03%. Findings described in this manuscript can contribute to better knowledge of pension funds for both contributors who need to decide whether to participate in the second pillar or not, as well as for regulators who develop legislation measurements in this area.

scholarly journals The uncertain reform to the Chilean pension system

2016 ◽  
Vol 17 (3) ◽  
pp. 957-974
Author(s):  
Ivan Obando Camino
Keyword(s):  
Financial Markets ◽  
Pension System ◽  
Negative Impact ◽  
Private Pension ◽  
Left Wing ◽  
Public Pension System ◽  
Reform Strategy ◽  
Major Industry ◽  
Private Pension System

Abstract: This paper describes the attempts to introduce some solidary features into the private pension system and the reform strategy followed thereof by left-wing governments in Chile since 2008. The negative impact on retirees of a private pension system driven by financial markets and profit-oriented actors has led to a continuing questioning of this system by experts and the population. The strong veto powers that major industry actors hold in the policy process determined that those governments adopted an institutional reform strategy based on layering. This paper surmises that this strategy may a have an impact on the pension system in the long-term by steering it gradually towards a public pension system. Keywords: Social security. Pension system. Solidarity system

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.

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