scholarly journals What Makes Pension Reforms Sustainable?

2018 ◽  
Vol 10 (8) ◽  
pp. 2891 ◽  
Author(s):  
Aaron Grech

Policymakers pushing pension reforms have tended to justify changes on the basis that they would make systems more sustainable by lowering future spending on pensions. This is a rather narrow interpretation of sustainability that fails to consider that other fiscal programs may need to accommodate the impact of reforms that reduce pension system adequacy. In this light, this article argues that in order to correctly assess the sustainability of pension reforms, one needs to adopt a more holistic framework that encapsulates the interaction between pension system goals and constraints. In a number of countries, reforms focused solely on reducing future spending were followed by reforms that restored generosity. A holistic approach to assess pension sustainability could help limit this cycle of reform and increase trust in pension systems.

Author(s):  
Tetiana Ivashchenko

The most contradictions arise today over the pension system reforming. Each year the states spent significant resources to finance social and economic needs of the population. The positive effect of the nominal growth of the social and economic guarantees in Ukraine leveled nowadays in terms of financial, economic and political instability. Also the processes of depopulation have a very negative impact on the financial viability of the PAYG pension system. Given this, the research aim was to study and discuss tendencies in financial provision of the pension systems in the European countries and Ukraine under globalization. As a result in the process of research the main features of functioning and providing of the pension insurance systems in European countries and Ukraine were examined; the impact of the depopulation processes on the financial provision of the pension systems was determined; problems, related to introduction of the funded system of pension insurance were analyzed; the role of the minimum pension institute in provision of the effective pension system functioning was disclosed and recommendations in relation to optimization of pension insurance and providing сo-operation under globalization were developed.


2020 ◽  
Vol 30 (Supplement_5) ◽  
Author(s):  
◽  

Abstract Although at different paces, life expectancy is increasing in Europe and globally, this impacting on public spending, welfare and pension systems. In an ageing society, to sustain economic growth, reduce public spending and foster the sustainability of pension systems, many countries have recognized the need to increase people employment participation at higher working age. In addition, many nations are implementing large budget reductions to social welfare systems. How will these reforms impact on healthy ageing? It is of concern that the increase in pension age may force subjects with health problems to continue working in jobs characterized by adverse working conditions, which may further deteriorate their health. The workshop will bring together expertise in public health, epidemiology, statistics, policies analysis, economics and quantitative social sciences with topic knowledge on ageing. In particular, we will present the design and outputs of the multi-partner project “Pension reforms and spatial-temporal patterns in healthy ageing: quasi-natural experimental analysis of linked health and pension data”. Aim of the project is to evaluate the impact of labor and retirement-associated determinants on different dimensions of health and wellbeing of elder populations, so as to provide useful evidence to plan, implement and evaluate targeted prevention programmes and welfare policies. The workshop will be structured as follows: we will first set the scene by introducing a conceptual framework on the association between social determinants, working conditions, transition to retirement and health, both in its physical and mental components. The framework has been developed in the context of the project and fueled by retrieving, pooling and critically appraising the most updated evidence from the biomedical and economic literature. We will then provide two original contributions. In the first we will present original Italian national representative data exploring whether retirement and retirement age are associated with changes in health status, sickness absence, caregiving, social engagement, disease incidence or mortality. In the second contribution we will open up to the European level presenting analysis of secondary household panel surveys across 18 EU countries using Surveys on Health, Retirement and Ageing in Europe (SHARE), as well as specific quasi-natural experiment studies of reforms extending pension ages in different countries. At the end, we hope to engage in a fruitful discussion with the audience on the data presented, and to explore on how they can inform critical policy debates about health and economic consequences of pension reforms and potential inequalities at the European and global level. Key messages In an ageing society it is crucial to assess how pension reforms might impact on health. Quasi-natural experimental analysis of linked health and pension data might inform policy.


Author(s):  
Thomais Massala ◽  
Nick Pearce

How were comprehensive pension reforms in the UK successfully developed, enacted and implemented from 2002 to 2015, despite changes in government composition and the financial crisis? Why were they not subject to policy conflict, electoral competition and policy reversal? Drawing on actor-centred historical institutionalism and thirty interviews with key actors, we demonstrate the critical role played by a limited number of politicians and policy entrepreneurs and their ideas and agency. Institutional continuity with the Beveridgean policy legacies of the pension system and the United Kingdom’s `growth regime’ enabled a coalition space to open up for policy agreement. between the government and Opposition parties, and for partisan electoral competition over the reforms to be `bracketed’. The incremental and interlocking nature of the reform package reduced interest group opposition and enabled a centralisation of decision-making power. A long-term timeframe for reform cemented the formation of an elite coalition and buttressed political control. Cross-party support for the reform package, coupled with judicious phasing of the implementation of auto-enrolment and fiscal reforms, enabled it to withstand the impact of the financial crisis and the austerity that followed it, and to minimise opposition among the critical electoral constituency of older voters. The dominance of the reform process by political actors and policy entrepreneurs in the UK nonetheless came at a price, as institutional continuity and incrementalism foreclosed alternative reforms. We demonstrate the importance of political statecraft and policy entrepreneurship in the UK pensions’ reform process, but within boundaries set by its institutional context.


2001 ◽  
Vol 10 (4) ◽  
Author(s):  
Marie Valentová

This article examines the introduction of old age pension reforms in the Czech Republic and Slovenia. It is designed firstly to define similarities and differences in enacted legislation affecting the pension systems of the observed countries after the fall of the communistic regime and secondly to compare the influence of the most significant factors which have caused these similarities or differences. Namely this article focuses on a comparison of three factors such as a demographic, political and traditional ones.


2020 ◽  
pp. 161-176
Author(s):  
Vasyl Zelenko

In this article, the problems of functioning of accumulative pension systems in the EU countries and Ukraine are investigated. The EU countries are characterised by the presence of developed multi-tier pension systems, which significantly vary in different parameters. The common problem for the EU and Ukraine is depopulation, which creates crises in solidarity pension systems. It caused the necessity of pension reforms in many European countries to implement the accumulative components. The European Commission has established unified approaches towards the assessment of pension systems in the EU. While introducing the accumulative pension system, Ukraine intends to apply the best European experience in the pension sector.


Author(s):  
В. Ю. Бабышев

В статье рассматриваются экономические последствия демографического старения. Обосновывается актуальность данной темы. Исследовательской проблемой данной статьи является оценка силы влияния демографического старения на финансовое состояние пенсионной системы в мире. Проводится проверка тезисов «макроэкономики старения» относительно финансового состояния пенсионных систем при увеличении доли лиц старше трудоспособного возраста. Проведен географический анализ отклонений места стран в рейтинге достаточности пенсионного дохода и рейтинге Melbourne Mercer Global Pension Index от места стран в рейтинге демографического старения. В качестве информационной базы используется рейтинг достаточности пенсионного дохода по 48 странам, рейтинг Melbourne Mercer Global Pension Index по 25 странам и разработанный ООН коэффициент демографической нагрузки пожилыми. Сделан вывод об отсутствии значимой корреляции старения населения, с одной стороны, и финансового состояния пенсионных систем, с другой. Дополнительно сделан вывод, что существует определенная зависимость между силой влияния демографического старения и экономикогеографическим регионом. Дается возможное теоретическое обоснование ошибочности тезисов «макроэкономики старения». Рассмотрены недемографические факторы влияния на финансовое состояние пенсионных систем. This article discusses the economic consequences of demographic aging. The relevance of this topic is substantiated. The research problem of this article is to assess the strength of the influence of demographic aging on the financial condition of the pension system in the world. Abstracts of the «macroeconomics of aging» theses are reviewed with respect to the financial condition of pension systems with an increase in the share of people over working age. A geographical analysis of deviations of the place of countries in the rating of sufficiency of retirement income and the rating of the Melbourne Mercer Global Pension Index from the place of countries in the ranking of demographic aging is carried out. The retirement income sufficiency rating for 48 countries, the Melbourne Mercer Global Pension Index rating for 25 countries and the UN developed Old age dependency ratio (OADR) are used as the information base. It is concluded that there is no significant correlation between the aging of the population on the one hand and the financial condition of pension systems on the other. Additionally, it was concluded that there is a certain pattern between the strength of the influence of demographic aging and the economic and geographical region. A possible theoretical justification of the thesis of the thesis «macroeconomics of aging» is given. Non-demographic factors of influence on the financial condition of pension systems are considered.


2016 ◽  
Vol 17 (1) ◽  
pp. 110-120 ◽  
Author(s):  
AGNIESZKA CHŁOŃ-DOMIŃCZAK

AbstractThe paper shows the impact of changes in multi-pillar pension systems in six Central and Eastern European countries for individual pension wealth. It demonstrates that the post-crisis changes in pension system reduced pension wealth of workers in Poland and increased in Lithuania and Slovakia. The change did not have significant impact on pension wealth in Estonia and Romania. The magnitude of this effect is highest in those countries where the reduction of the fully-funded pension contribution was permanent. Loss or gain in pension wealth varies with age of participants – it is higher for younger people, who will accumulate their pension wealth to a larger extent after the change. The level of the change in pension wealth depends also on the wage level – higher earners lose more relative to the average wage level. The difference in pension wealth depends also on the difference between rates of return in fully funded and pay-as-you-go (PAYG) components of the pension system. The net outcome of post-crisis pension system modifications depends both on the magnitude of fully-funded contribution reduction, but also on the design of PAYG component and the way individual pension rights are accrued. These results indicate the rise in implicit liability of pension system in Slovakia to be higher than the reduction of the explicit liability caused by the pension system change and the lower rise of implicit liability in Poland and Latvia.


2014 ◽  
Vol 4 (3) ◽  
pp. 119-130 ◽  
Author(s):  
Shouji Sun ◽  
Jiye Hu

The impact of pension assets on financial development is both quantitatively and qualitatively. On quantitatively, pension funds increase capital supply to financial market. On qualitatively, pension funds as institutional investors could promote corporate governance, information disclosure and transaction efficiency. Based on regression results of 55 countries and regions, we find that different pension systems formed different size of pension fund; every 1% increase of the pension funds’ assets could bring about 0.15%-0.23% increase of the market value, which could explain cross-countries difference of financial development. Based on panel data analysis, we find that the impact of pension fund on financial development is very significant especially in civil law and underdeveloped countries. By using co-integration analysis and vector auto regression model (VAR) with time series data of Chile, we find positive relationship between pension funds and financial development again. The empirical results indicate that legal origin, endowment and pension fund views are not exclusive but compatible. A country cannot change its legal origin and endowment, but it can change pension policies and reform social security system. A funded pension system with accumulates pension assets could promote a country’s financial development and economic growth.


PLoS ONE ◽  
2021 ◽  
Vol 16 (3) ◽  
pp. e0248138
Author(s):  
Haoyu Hu ◽  
Wei Wang ◽  
Dawei Feng ◽  
Hualei Yang

There are a few existing studies on whether domestic migration improves China’s pension system’s fiscal sustainability in the context of rapid urbanization and industrialization. In this paper, we systematically investigate the impact of migration on the solvency of the worker’s old-age insurance for urban employees by constructing actuarial and econometric models. We use panel data from 2002 to 2018, collected from 31 provinces in China. The results show that the association between migration and the solvency of pensions is an inverted-U shape along the urbanization process. Further regional comparison showed that the above-stated inverted-U curve is more pronounced in the central and western regions. We also established that the number of participants and the contribution base are the main contributors to these results. Our conclusions are important for future population policies and public pension systems in China.


2019 ◽  
Vol 12 (6) ◽  
pp. 130-151 ◽  
Author(s):  
T. V. Zhukova

The article puts forward the hypothesis about the wave nature of pension systems reforms since the early 1990 under the effect of demographic and economic factors. In response to the results of previous works on this subject and statistical analysis results, wave’s mechanism has been identified. Conditions for starting the wave of pension reforms established with long-term demographic trend in periods of tension (the higher growth rates of age dependency ratio and others). The start and dynamic of the wave are determined by macroeconomic shocks arise from decreasing phase of business-cycle. The growth phase of pension reforms are followed by the period of deceleration. There is a factor that slowdowns responses to macroeconomic shocks (the decisions about pension reforms are not accepted instantly). Pension system adjusts to new conditions until further tightening. Quantitative and quality analysis of pension reforms across countries would allow to test this hypothesis. To that end an appropriate instruments have been developed: the classifier of pension reform (67 items with scoring system to estimate the depth of the changes), evaluation system for economic factors influences via sensitive to pension systems indicators and associated macroeconomic shocks. A cross-section of 24 countries generates a mix of pension reforms for the period of 1994–2019, two waves of pension reforms (1990–2008 and 2009 – present) is revealed, the hypothesis of waves nature of pension reforms is confirmed. The heart of pension systems transformations in the first way is identified. These are lowering of government pensions obligations, shifting the risks from state to population with the introduction of DCschemes. The suggestions that the implementation of second pillar is positive only for countries with well-developed financial market.  The research of second-wave of pension reforms and projection of the third way will be dealt with in the next article.


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