The Impact of Structural Factors on the Financial Stability of European Pension Systems

The study presents an assessment of the impact of structural factors on the financial stability of pension systems in European countries. The purpose of the study is to determine the internal structural factors that have the most significant impact on the financial stability of pension systems in European countries. A review of the scientific literature dealing with the study of the financial stability of European pension systems is carried out. The correlation between the concepts of "financial stability" and "financial resiliency" is determined, the structural factors of pension models are identified and their grouping is carried out. The ranking of European pension systems by the level of their stability (including periods of financial crises) is carried out. The reasons for the decline in the stability and resiliency of European pension systems at this stage of development are identified. The study shows the internal structural factors that have a positive or negative impact on the degree of financial stability and financial resiliency of European pension systems. The conclusions obtained in the study can be used in the formation of the state pension policy of European countries and the choice of directions for reforming pension systems

Underestimating Lifespans? Why Longevity Risk Exists in Retirement Planning and Superannuation Policy

<p>The pace of increasing life expectancy in recent decades came as a surprise to demographers, as mortality rates unexpectedly improved at the oldest ages in developed countries. The most common policy response, although one not yet planned for New Zealand, is to increase eligibility age for the public pension. Given the complexity and uncertainty of processes driving mortality improvement, future lifespans cannot be known. However, it is questionable whether policy makers and individuals understand the extent of past and likely future lifespan increase. Available evidence suggests individuals tend to underestimate how long they may live. Population mortality forecasts are generally conservative and poorly explain longevity uncertainties. Longevity risk - the possibility that future lifespans will be longer than anticipated - threatens individuals' pre-retirement financial planning and public pension policy. This thesis examines the extent of longevity risk, its causes, significance and remedies, in these two domains, for New Zealand. The theoretical existence of longevity risk has been acknowledged, but has not been subject to critical analysis in New Zealand or elsewhere. Here, a unique generalisable methodology exploiting insights available from international mortality comparisons is designed, combining actuarial and demographic theory. After assessing the flaws in the time-dependent or period approach to measurement of life expectancy that are known in theory but underexplored in practice, the method emphasises the lifecourse or cohort approach. The three factors that determine longevity risk - plausible population lifespan prospects, the lifespan assumptions used by policy makers and individuals' subjective lifespan expectations - are identified and the relationships between them analysed for New Zealand. An interpretation of the consistency of New Zealand's past mortality trends and future projections with those of other British settler countries, supplemented by a review of the consequences of mortality variance within New Zealand, shows that plausible lifespans in New Zealand are likely to be higher than those in the official projections on which policy makers rely. The first survey to ask how long New Zealanders think they will live shows that collectively, New Zealanders are more likely to underestimate future lifespan than not, based on a variety of beliefs about mortality that are not consistent with the evidence on increasing lifespans. Longevity risk from underestimation of future lifespans is revealed in New Zealand policy making and in individual New Zealanders' retirement plans. The most likely cause is the repeated misuse of life expectancy indicators in an environment lacking public discourse about increasing longevity. A remedy would be switching from using flawed period life expectancy indicators to using cohort life expectancy or modal age at death. Using plausible estimates for future lifespans based on more optimistic estimates than the official projections most often referenced would be important but mitigate longevity risk to a lesser extent. A more extensive public debate than has been held so far about eligibility age for New Zealand's public pension would itself, if using appropriate indicators for future lifespans, provide an opportunity to address longevity risk.</p>

Underestimating Lifespans? Why Longevity Risk Exists in Retirement Planning and Superannuation Policy

<p>The pace of increasing life expectancy in recent decades came as a surprise to demographers, as mortality rates unexpectedly improved at the oldest ages in developed countries. The most common policy response, although one not yet planned for New Zealand, is to increase eligibility age for the public pension. Given the complexity and uncertainty of processes driving mortality improvement, future lifespans cannot be known. However, it is questionable whether policy makers and individuals understand the extent of past and likely future lifespan increase. Available evidence suggests individuals tend to underestimate how long they may live. Population mortality forecasts are generally conservative and poorly explain longevity uncertainties. Longevity risk - the possibility that future lifespans will be longer than anticipated - threatens individuals' pre-retirement financial planning and public pension policy. This thesis examines the extent of longevity risk, its causes, significance and remedies, in these two domains, for New Zealand. The theoretical existence of longevity risk has been acknowledged, but has not been subject to critical analysis in New Zealand or elsewhere. Here, a unique generalisable methodology exploiting insights available from international mortality comparisons is designed, combining actuarial and demographic theory. After assessing the flaws in the time-dependent or period approach to measurement of life expectancy that are known in theory but underexplored in practice, the method emphasises the lifecourse or cohort approach. The three factors that determine longevity risk - plausible population lifespan prospects, the lifespan assumptions used by policy makers and individuals' subjective lifespan expectations - are identified and the relationships between them analysed for New Zealand. An interpretation of the consistency of New Zealand's past mortality trends and future projections with those of other British settler countries, supplemented by a review of the consequences of mortality variance within New Zealand, shows that plausible lifespans in New Zealand are likely to be higher than those in the official projections on which policy makers rely. The first survey to ask how long New Zealanders think they will live shows that collectively, New Zealanders are more likely to underestimate future lifespan than not, based on a variety of beliefs about mortality that are not consistent with the evidence on increasing lifespans. Longevity risk from underestimation of future lifespans is revealed in New Zealand policy making and in individual New Zealanders' retirement plans. The most likely cause is the repeated misuse of life expectancy indicators in an environment lacking public discourse about increasing longevity. A remedy would be switching from using flawed period life expectancy indicators to using cohort life expectancy or modal age at death. Using plausible estimates for future lifespans based on more optimistic estimates than the official projections most often referenced would be important but mitigate longevity risk to a lesser extent. A more extensive public debate than has been held so far about eligibility age for New Zealand's public pension would itself, if using appropriate indicators for future lifespans, provide an opportunity to address longevity risk.</p>

Unions and Employers

This chapter reviews the main theoretical perspectives which focus directly or indirectly on the role of employers and unions in welfare state development. It also examines the conditions under which collective interests become organized and mobilized, and how well worker and employer interests have been organized and integrated into the overall political economy. The differences in the degree to which welfare states share public space are addressed; that is, the influence of the social partners on policymaking and implementation in different countries. It then explores wage bargaining, labour market policy, pension policy, and health care and shows how the interests of labour and capital are differentially affected and have varying influence across advanced economies. A final comparison of the developing societies and emerging market economies indicates that in these countries, corporatist intermediation is more fragile than in advanced economies, and organized labour and capital have less influence on employment conditions and social protection.

Bringing Back the State: Understanding Varieties of Pension Re-reforms in Latin America

ABSTRACTPension policy is a highly political issue across Latin America. Since the mid-2000s, several countries have re-reformed their pension systems with a general trend toward more state involvement, yet with significant variation. This article contends that policy legacies and the institutional political setting are key to understanding such variation. Analyzing the cases of Argentina, Bolivia, and Chile, this article shows that where a weak legacy, characterized by low coverage and savings rates, a weakly organized pension industry, and strong societal groups that oppose the private system, combines with a strong institutional setting, characterized by a government with large support in Congress and where the president concentrates decisionmaking, re-reform outcomes may lead to the outright elimination of the private pillar. Conversely, where a strong legacy combines with a weak institutional setting, re-reform outcomes will tend to maintain the private pillar and expand only the role of the public one.

Social policy in increasing the efficiency of pension provision in the Kyrgyz Republic

This article examines the pension policy, which is usually attributed to the direction of the state’s social policy. Designed to improve the well-being of the population and ensure a high standard and quality of life. The state pension policy is the basic and one of the most important state guarantees for the stable development of society, since it directly affects the interests of the able-bodied and disabled population. The results of an online survey revealed that the most important condition for creating an effective system of social support for pensioners in the current reality is the improvement of pension policy, as well as the system of social services, the development of new social technologies to provide assistance to the population, in particular the elderly, and the formation of a network of specialized institutions. social services to the population, an increase in the volume and expansion of the list of social services provided by them.

Automatic Indexation of the Pension Age to Life Expectancy: When Policy Design Matters

Increasing retirement ages in an automatic or scheduled way with increasing life expectancy at retirement is a popular pension policy response to continuous longevity improvements. The question addressed here is: to what extent is simply adopting this approach likely to fulfill the overall goals of policy? To shed some light on the answer, we examine the policies of four countries that have recently introduced automatic indexation of pension ages to life expectancy–The Netherlands, Denmark, Portugal and Slovakia. To this end, we forecast an alternative period and cohort life expectancy measures using a Bayesian Model Ensemble of heterogeneous stochastic mortality models comprised of parametric models, principal component methods, and smoothing approaches. The approach involves both the selection of the model confidence set and the determination of optimal weights. Model-averaged Bayesian credible prediction intervals are derived accounting for various stochastic process, model, and parameter risks. The results show that: (i) retirement ages are forecasted to increase substantially in the coming decades, particularly if a constant period in retirement is targeted; (ii) retirement age policy outcomes may substantially deviate from the policy goal(s) depending on the design adopted and its implementation; and (iii) the choice of a cohort over period life expectancy measure matters. In addition, the distributional issues arising with the increasing socio-economic gap in life expectancy remain largely unaddressed.