Socio–demographic Impacts on the Personal Savings Portfolio Choice - a Decision Tree Approach

Insufficiently developed financial system, poor standard of living and inappropriate education of citizens on the saving products, lead to low level of investment in the financial market of developing countries. In this paper special attention is paid to examining the socio-demographic profile of Montenegrin citizens that invest their funds in some of the offered form of savings, as well as examining main factors that restrict their investment. For this purpose, data collected through the survey of Montenegrin citizens were processed using Decision Tree method. Survey results have shown that there is a low level of savings, as well as that citizens prefer deposits and life insurance products rather than pension plans and debt securities. Also, the results indicate that the main causes of the current state of savings in Montenegro are low standard of living, citizens´ poor awareness and the financial system which causes the insufficiently attractive supply of savings.

Development of the taxation of retirement products in Bulgaria

Retirement products are long-term savings products. It is widespread government to encourage the saving via tax incentives. Bulgaria follows favourable taxation of saving in voluntary pension funds. The paper is searching answer whether the applied tax policy of personal retirement products in Bulgaria is efficient. The research is focused on three main areas: the nature of the tax incentives in the country; the development of the taxation of pensions across European Union and the areas for improvements of the tax policy taking into account the characteristics of the Bulgarian socio-economic environment. The efficiency of the tax advantages often is under doubt in the literature. These studies omit the fact that without tax reliefs the coverage and the efficiency of saving in personal pension plans will be low. One of the conclusions of the current research is that the tax incentives for personal retirement products have to be a part of the design of the plans and these reliefs need to be adapted to the changing economic environment. The paper reaches the conclusion that evolution of the taxation of pensions in the country is needed. The positive changes will increase the trust in the personal retirement products and will improve the adequacy and sustainability of the overall pension system in Bulgaria. This evolution can be done through set of measures that will encourage people to save and will be factor for improving the results from the saving in personal pension plans.

Increase of Urban Women’s Work Participation and Quality of Employment in Paid-Domestic Work: A Survey in Delhi-NCR and Kolkata-Asansol

A rise in female work participation in the urban sector creates a vacancy for care work at the household level and triggers a second round of job creation for females. In order to explore whether this process gives rise to decent employment for the female domestic workers (FDWs), a primary survey was conducted among domestic workers in the cities of Delhi, Noida, Kolkata and Asansol. The workers surveyed are, by and large, in low-wage, precarious employment, without social security and have an exhausting routine of work inside and outside the home. Apart from the lack of job security, sickness and disease also add to the uncertainty. Given the double burden of income-earning work and own domestic work, the FDW is crucially dependent on her health and strength, and often incurs health-related expenditure. But they contribute to their household income and have some autonomy in household decision-making. The informal working conditions for these workers, the need for social security and their low wage levels are all areas that need serious attention from policy-makers. Health insurance and pension plans would benefit the domestic workers, given that their work involves a requirement for robust health and the strength that youth brings with it.

Fair and balance rate for benefits not scheduled in defined contribution plans

ABSTRACT The objective of this study is to propose a methodology that, using multiple decreases, in addition to classified by actuarial profile and source of social security costs, calculates actuarially fair and balanced rates for unscheduled collective costing benefits from Defined Contribution (DC) pension plans. There are no studies in Brazil about costing rates for benefits not scheduled in pension plans of the DC modality. Any institution that pays collective cost social security benefits must determine an actuarial rate that is not insufficient, generating a financial imbalance in the fund, nor excessive, compromising the participant’s income. This work is the first study on costing rates for collective costing benefits from pension plans with DC modalities. Actuarially fair rates are obtained considering multiple decreases and equalizing the present value of contributions and the present value of pension and disability benefits, classified by actuarial profile and source of social security cost. The specific balance rate is determined for each source of social security costs and is obtained considering the actuarially fair rates for each actuarial profile. The general balance rate is obtained by the marginal contribution of each specific balance rate. The proposed methodology was used to calculate the rates of unscheduled benefits with collective costing in DC modality plans. The proposed methodology estimated that the legal changes, resulting from Constitutional Amendment 103/2019, indirectly increased by more than 4% the general balance rate of the unscheduled benefits of the Supplementary Social Security Foundation of the Federal Public Servant of the Executive Branch of the Federal Government (FUNPRESP-Exe).

Missing Participants and Beneficiaries From Private-Sector Pension Plans

This article examines the problem of missing and nonresponsive participants and beneficiaries from defined-benefit (DB) and especially defined-contribution (DC) pension plans, mainly in the private (for profit) sector of the United States. It focuses on the current search requirements of the three government agencies involved in finding missing participants and beneficiaries: the Pension Benefit Guaranty Corporation (PBGC), the Department of Labor (DOL) and its Employee Benefit Services Administration (EBSA), and the Internal Revenue Service (IRS). The article also reviews the efforts of the Social Security Administration (SSA) in this area. It then reviews proposed legislation, the Retirement Savings Lost and Found Act of 2020 (now S. 1730; RSLFA). The issue of missing participants and beneficiaries often becomes critical when an employer goes out of business or for some other reason stops sponsoring a pension plan. The missing participants are owed their earned retirement benefits. They, not the employer, own them.