scholarly journals The Spanish public pension system as opposed to the alternative of private pension plans

2020 ◽  
Vol 6 (2) ◽  
pp. 13-26
Author(s):  
M. Cubas Pardo
Keyword(s):  
Pension System ◽  
Substantial Reduction ◽  
Pension Plans ◽  
Public Pension ◽  
Private Pension ◽  
Private Pensions ◽  
Public And Private ◽  
Public Pension System ◽  
Average Worker ◽  
The Impact

Many countries are currently facing the problem of sustainability of public pension systems due to demographic developments and changes in the labor market. In this context, private pension plans are often presented as an alternative. This paper aims to describe the functioning of the current public pension system in Spain and the impact that abandoning the current public system and adopting a pension system based on private contributions would have on workers and pensioners. To this end, a hypothetical case study is presented, for an average worker, comparing the contributions made in each of the systems (public and private) as well as the benefits received after retirement. The results show the different nature of public pensions, which act as an insurance and have a strong redistributive component, as opposed to private pensions, which have an investment nature. For the average worker, the adoption of a private system would entail losses in the purchasing power during his working life and a very substantial reduction in the amounts received during retirement, along with greater economic instability.

scholarly journals Individual Pension Funds and Capital Market Development in Turkey

2016 ◽  
Vol 9 (2) ◽  
pp. 95-109 ◽  
Author(s):  
Yilmaz Bayar
Keyword(s):  
Stock Market ◽  
Positive Impact ◽  
Pension Funds ◽  
Pension Plans ◽  
Public Pension ◽  
Private Pension ◽  
Securities Market ◽  
Causality Test ◽  
Pension Systems ◽  
The Impact

AbstractBeginning with the 1980s, when the sustainability of the public pension systems became endangedered, many countries have developed their individual pension plans and/or occupational pension plans in order to supersede or support their public pension systems,. This study examines the impact of individual pension funds on the development of both debt securities market and stock market in Turkey during the period October 2006-May 2015, using Hatemi (2008) cointegration test and Toda and Yamamoto (1995) causality test with monthly data. We found that, in the long run, the private pension funds had positive impact on both development of debt securities market and stock market. Furthermore, causality appears to exist between the market for private pension funds, the debt securities market and the stock market.

scholarly journals Comparative Analysis of Retirement Benefits in Private Pension Funds and Public Pension System

2019 ◽  
Vol 57 (2) ◽  
pp. 145-164
Author(s):  
Stevan Luković ◽  
Srđan Marinković
Keyword(s):  
Comparative Analysis ◽  
Success Rate ◽  
Pension Fund ◽  
Pension System ◽  
Public Pension ◽  
Private Pension ◽  
Investment Strategies ◽  
Retirement Benefits ◽  
The Public ◽  
Public Pension System

AbstractThis paper identifies the conditions under which the private pension funds generate superior retirement outcomes compared to public pension system. The research objective is to determine the probability of success of the selected investment strategies in achieving the public pension system replacement rate, and the probability of the realization of extremely unfavourable outcomes. The methodology used in this paper includes the comparative analysis of simulated financial results of the four selected investment strategies implemented in the private pension fund model and the defined retirement benefits generated within the public pension system. For the simulation of the financial results at retirement, Monte Carlo simulation technique has been used. The authors have found that the success rate of the private pension fund in achieving superior financial results in comparison to public pension system is high, but only for the contribution rates higher than 10%. At low contributions rates, the extremely aggressive strategy is the only one that generates moderate success rate. Also, the probability of realization of extremely unfavourable financial results is lowest for the conservative strategy, which suggests that for the relatively high levels of the contribution rate, it is the most appropriate option for the pension fund members.

The implications of demographic and economic projections on public pension spending in the European Union

2018 ◽  
Vol 34 (1) ◽  
pp. 19-39
Author(s):  
Beatriz Benítez-Aurioles
Keyword(s):  
European Union ◽  
Pension System ◽  
Labour Force ◽  
Public Pension ◽  
The European Union ◽  
The Public ◽  
Active Population ◽  
Public Pension System ◽  
Effects Of Aging ◽  
The Impact

AbstractThis paper analyses the implications that demographic and economic projections have on public pension spending in the European Union (EU). Using some stylised facts, we study the aging trends of the population, as well as labour force and employment projections. Indices of both demographic and economic dependence are built. All of this is used to determine the impact on public pension spending in the EU. Although we detect substantial heterogeneity of circumstances, we show that the states in which aging of the population weights more in explaining public pension expenditure growth as a percentage of gross domestic product (GDP) are generally the ones that make greater efforts to control this spending. Given the limited capacity of policies to increase active population or employment to offset the effects of aging, measures aimed at diminishing the generosity of the public pension system and at promoting private schemes have gained relevance.

scholarly journals The impact of alternative assets on the performance of Brazilian private pension funds

2021 ◽  
Vol 32 (86) ◽  
pp. 314-330
Author(s):  
Francis Amim Flores ◽  
Carlos Heitor Campani ◽  
Raphael Moses Roquete
Keyword(s):  
Pension System ◽  
Hedge Fund ◽  
Pension Funds ◽  
Pension Plans ◽  
Public Utilities ◽  
Private Pension ◽  
Investment Funds ◽  
Fund Managers ◽  
Almost All ◽  
The Impact

ABSTRACT This article assesses the impact of alternative assets on the performance of Brazilian private pension funds. Few studies touch on this topic in Brazil and most only investigate the addition of alternative assets and their impact on the performance. The market of open private pension funds in Brazil has been growing rapidly in recent years and gaining much relevance, especially after the announcement of the reformulation of the Brazilian pension system. In 2018, the Free Benefit Generating Plan (PGBL) and the Free Benefit Generating Life (VGBL) represented more than 94% of total assets in their sector. The Brazilian specially constituted investment funds (FIEs) of PGBL and VGBL private pension plans are characterized by their dependence on fixed income assets. Brazil currently faces an unprecedent low interest rate scenario - which, following a worldwide panorama, seems to be set for a long time - and pension fund managers must search for alternative investments that aggregate both risk premia and diversification. The results of this study may support managers in this little-discussed matter. We compare the performance of FIEs without additional alternative assets versus the portfolio with alternative assets, adding a hedge fund index, an equity mutual funds index, a commodity index, an electric power index, a public utilities index, a gold index, and a real estate index. Several performance measures were used, considering Brazilian regulations and a rebalancing strategy. Our results showed that almost all alternative assets used in this study improved the performance of the Brazilian FIEs of PGBL and VGBL private pension plans, especially the public utilities index and the hedge fund index. Some even improved the portfolio tail risk.

scholarly journals Aging and the Necessity of a Radical Reform of the Canadian Pension System

2009 ◽  
Vol 36 (1-2) ◽  
pp. 17 ◽  
Author(s):  
Jacques Henripin
Keyword(s):  
Pension System ◽  
Population Aging ◽  
Public Pension ◽  
Private Pension ◽  
Radical Reform ◽  
Public Pension System ◽  
Future Population

Compared to the 29 other members of OECD, Canadian workers must satisfy themselves with a rather timorous public pension system, particularly those who earn a middle or higher income. This weakness is somewhat corrected by private pension organizations, but only a third of employees are covered by them. The author proposes that all workers have access to such programs and even that they are mandatory. There would be many of them; they would function on the basis of capitalization; they would be public or private. The choice of the capitalization financial principle is almost essential, due to future population aging. The author displays his convictions about these proposals, as well as practical ways to implement such a program.

The impact of international migration on the public pension system: The case of Portugal

2019 ◽  
Vol 72 (1) ◽  
pp. 107-128
Author(s):  
José Alves ◽  
Daniela Craveiro ◽  
Maria Teresa Medeiros Garcia ◽  
Paula Albuquerque
Keyword(s):  
International Migration ◽  
Pension System ◽  
Public Pension ◽  
The Public ◽  
Public Pension System ◽  
The Impact
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