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Pension Schemes (pension + scheme)
Kinds of Pension Schemes Selected AbstractsTHE TROUBLE WITH FINAL SALARY PENSION SCHEMESECONOMIC AFFAIRS, Issue 4 2006Nick Silver The decline in final salary pension schemes (FSS) is a result of increasing costs caused in part by legislative interference. In this paper it is argued that FSS have always been detrimental to the economy. In a misguided attempt to save FSS, the government risks bankrupting large sections of the British corporate sector. Other policy measures could allow greater flexibility for trustees of pension schemes and remove counter-productive legislation and encourage innovative market-based solutions to pensions problems. [source] THEORETICAL FOUNDATIONS OF PAY-AS-YOU-GO DEFINED-CONTRIBUTION PENSION SCHEMESMETROECONOMICA, Issue 2 2008Sandro Gronchi ABSTRACT The paper inquires into notional defined contribution pension schemes, which retain the pay-as-you-go financing method while adopting the award and indexation formulas typical of funded, defined-contribution systems. It examines the properties of the new arrangement and compares them with those of the traditional defined-benefit pay-as-you-go schemes. [source] Does it Matter What Type of Pension Scheme You Have?THE ECONOMIC JOURNAL, Issue 461 2000David Blake First page of article [source] Naïve Diversification in the Swedish Premium Pension Scheme: Experimental EvidenceAPPLIED PSYCHOLOGY, Issue 3 2009Ted Martin Hedesström In the Swedish Premium Pension Scheme (PPS) all citizens in paid employment allocate part of their public pension savings to mutual funds. In so doing they tend to distribute their choices maximally across different stock fund categories. It is hypothesised that this reflects the naïve application of a variety-inducing diversification heuristic. The results of two experiments simulating choices of fund categories in the PPS support this hypothesis by showing that participating undergraduates chose stock funds investing in overlapping and non-overlapping markets or industries in a way demonstrating failure to take into account covariation among fund returns. Administrators of the PPS and similar defined-contribution pension plans should provide participants with comprehensive advice on how to diversify their investment. Dans le régime de retraite suédois (PPS), tous les citoyens ayant un emploi salarié allouent une part de l'épargne de leur retraite publique à des fonds d'investissements. Ce faisant, ils tendent majoritairement à répartir leurs choix dans différentes catégories de fonds. On a fait l'hypothèse que cela reflète l'application naïve d'une heuristique de la diversification. Les résultats de deux expérimentations simulant des choix entre différentes catégories de fonds pour le PPS confirment cette hypothèse : les sujets (étudiants) ont choisi des fonds en actions et devaient investir sur des marchés ou dans des branches industrielles relevant ou non du même secteur économique et cela d'une façon qui mettait en évidence leur incapacitéà prendre en considération le fait que le retour sur investissement de différents fonds pouvait être lié. Les administrateurs du PPS et de plans de pensions avec versements programmés devraient fournir aux participants des conseils avisés sur la façon de diversifier leur investissement. [source] The Current Situation of Retirement Income Provisions in Japan: Social Security Pension Schemes and Corporate Pension PlansASIAN SOCIAL WORK AND POLICY REVIEW, Issue 2 2009Junichi Sakamoto Japan has been faced with rapid population ageing for decades. This has continuously reduced the level of social security pension benefits. Based on this it is often said that corporate pension plans should play a wider role forward in providing retirement benefits. However, we also have to know that there is a limit to what corporate pension plans can do in place of the social security pension schemes. In this paper we extract lessons from the history of social security pension schemes in our country and try to define the roles of corporate pension plans and social security pension schemes. In conclusion we should keep adequacy of social security pension benefits even if the contribution rate becomes a bit higher. Corporate pension plans just enrich people's life in retirement. We have to remember that corporate pension plans were not certain means for reducing the poverty in old age and that for this reason social security pension schemes by social insurance were invented. [source] National pension systems and mass opinion: a case study of confidence, satisfaction and political attitudes in NorwayINTERNATIONAL JOURNAL OF SOCIAL WELFARE, Issue 2 2004Ann-Helén Bay It is commonly assumed that popular support for national pension systems depends on widespread satisfaction with projected benefit levels among the working age population, and in particular that public support for the system will be jeopardised if the taxpayers do not feel confident about eventually receiving the promised benefits. On the basis of Norwegian survey data, two sets of questions are addressed in the article: (1) Is there a widespread lack of confidence in and satisfaction with the Norwegian National Insurance pension scheme? and (2) Is there an association between confidence and satisfaction and people's political attitudes towards the National Insurance pension scheme? Although we do not find any signs of a dramatic erosion of confidence towards the system, we do find that overall satisfaction with projected benefits is low among the working age population. Contrary to what one might expect, however, confidence and satisfaction from the point of view of individual interests appear not to be associated with a political preference for privatisation. [source] Welfare municipalities: economic resources or party politics?INTERNATIONAL JOURNAL OF SOCIAL WELFARE, Issue 1 2001Norwegian local government social programs of the 1920s This article analyses the introduction of Norwegian local government social security programs for the elderly, disabled persons, widows and single mothers in the 1920s. The role of local government as an agent and initiator of welfare state development has been for the most part neglected within the welfare state literature. Indeed, the first social security programs in Norway were introduced by local governments, affecting nearly half of the population. Even if these programs were not very generous compared with the social security programs of our time, many of them were equal to, or even more generous than, the national pension scheme introduced in 1936. This article examines what distinguished the social security municipalities from those that did not implement such programs, and the variation in generosity profiles. The conclusion is that the main determinant regarding the implementation and generosity of the local social security programs is the political strength of the two Norwegian socialist parties at the time , the Social democratic party and the Labour party , both being too impatient to wait for a national social security plan, and both being willing to mobilise economic resources through taxation and borrowing. [source] Social Security in Rwanda: Overcoming IndifferenceINTERNATIONAL SOCIAL SECURITY REVIEW, Issue 3-4 2003François-Xavier Ngarambe The current social security system in Rwanda, set up in 1962, has until recently been viewed with indifference by most Rwandans. This is because employees in the formal sense, who are the ones concerned by the pension and occupational risk branches, represent only a tiny minority of the population, attempts to provide medical cover for the population are still in their infancy, and in a context where unemployment is the rule and work the exception, the risk of unemployment is uninsurable. Faced with this situation the first challenge was to increase people's awareness of the problem by launching a debate in which social security was seen as part of efforts to combat poverty and underdevelopment. The greater awareness which this produced has enabled us to introduce a plan which we hope, on the basis of the first results, will lead to better things in future. Fundamental changes have just been made to the pension scheme, the management institution has been restructured and modernized, and efforts in the field of healthcare are producing their first fruits. Perhaps now, at long last, after years of indifference and inertia, a new day is dawning for social security in Rwanda! [source] On the Cost of Adverse Selection in Individual Annuity Markets: Evidence From SingaporeJOURNAL OF RISK AND INSURANCE, Issue 2 2002Wai Mun Fong New evidence is presented on the cost of adverse selection in individual annuity markets using Singapore data. The Singapore annuity market is an interesting setting to examine the cost of adverse selection for three reasons. First, unlike many Western countries, the Singapore government provides very limited public financial assistance for retirees. Second, while social security contributions mandated under the Central Provident Fund (CPF) result in a high forced savings rate, a large proportion of CPF savings, are used up for housing. Third, to ensure that retirees have sufficient funds to meet basic needs, individuals who reach age 55 are required to set aside a minimum amount of their CPF savings, which can be withdrawn at age 62. The CPF Board allows various options for investing the minimum sum, but the most attractive option is to purchase an annuity. The institutional setting in Singapore in effect provides insurers with a large captive market for annuities. It is conjectured that this should be reflected in a significantly lower cost of adverse selection for annuities sold in Singapore as compared with other countries. The results herein, using data for CPF-approved insurers, are strongly consistent with this conjecture. On average, money's worth of annuities is higher than annuities sold to a similar age-gender mix in the United States, United Kingdom, and Australia. Adverse selection accounts for less than 13 percent of the cost of longevity insurance compared to 30,50 per- cent documented in many previous studies. These results suggest that one way to resolve the adverse selection problem is to adopt a universal individual defined contribution pension scheme that mandates or provides strong incentives for retirees to purchase annuities. [source] Zur nachhaltigen Finanzierung der GRV: Der Beitrag der Altersgrenzenanhebung im RentenreformprozessPERSPEKTIVEN DER WIRTSCHAFTSPOLITIK, Issue 4 2008Oliver Ehrentraut In this article we analyze the effects of the latest reforms on the future development of the contribution rate as well as the public pension level. Furthermore, we quantify the extent of an increase of the average retirement age on the funding of the pension scheme, as the increase can temporarily dilute the financial burden due to demographic transition. [source] Perspektiven der Alterssicherungspolitik in Deutschland ,Über Konzeptionen, Vorschläge und einen angestrebten ParadigmenwechselPERSPEKTIVEN DER WIRTSCHAFTSPOLITIK, Issue 4 2000Winfried Schmähl The paper outlines different concepts for designing pension policies linked to current reform proposals in Germany. The role of the state, mandatory or voluntary savings for old age and the primary objectives and types of income redistribution aimed at by the design of pension schemes are central. In contrast to the economic debate which is dominated by the topic pay-as-you-go (PAYG) versus funding, the author argues that it is especially important to deal with changes within the major German PAYG-financed scheme in order to realize positive economic and social effects, especially by a close contribution??benefit link as part of a broader reform concept. There are, however, limits to an overall reduction of the pension level in such a pension scheme, if a close contribution??benefit link is to remain politically acceptable. Here this is demonstrated by current reform proposals for substituting a major part of PAYG pensions by funded pensions in Germany. The paper also points out some hidden, implicit and long-term effects of such a strategy. Finally, the author refers to some often neglected effects in mainstream proposals for a major shift towards funding. [source] Does Public Income Induce More Consumption?,THE ECONOMIC RECORD, Issue 272 2010ELLIOTT FAN The Life-Cycle/Permanent Income Hypothesis predicts that income uncertainty reduces an individual's incentive to consume, while holding permanent income level constant. This implies that switching from a relatively unstable form of income to a stable one motivates consumption. This article explores this implication by quantifying and comparing the marginal propensity to consume (MPC) out of private income and income from a public pension scheme. It exploits the introduction of a public pension that provides a monthly fixed amount of payment , a relatively secure source of income. The results suggest that the provision of pension leads to a higher MPC for the beneficiaries' households, and the estimated MPC out of the pension income is significantly larger than the corresponding estimate for private income. Further examination suggests that households facing more non-tradable risks appear to be more prudent on consumption, highlighting the role of income uncertainty in households' consumption decisions. [source] Retirement Incomes: Private Savings versus Social TransfersTHE MANCHESTER SCHOOL, Issue 5 2000John Creedy It has long been known, from the work of Samuelson and Aaron, that if (approximately) the sum of the population and real earnings growth rates exceeds the real interest rate, all individuals can be made better off by using a pay-as-you-go pension scheme. The basic overlapping generations model that is typically used to examine such intergenerational transfers makes no allowance for labour supply responses to taxes and transfers, and so cannot be used to examine optimal tax and pension levels. The present paper allows for labour supply effects, whereby a tax imposed to finance current pensions introduces distortions to labour supply and a reduction in the tax base. The optimal proportional tax rate, and therefore the optimal combination of private savings and social transfers, is derived in terms of the time preference rate, the taste for leisure, real interest and productivity and population growth rates. It is found that the condition under which the optimal tax is positive is the same as the Samuelson,Aaron condition. A crucial ingredient in obtaining this result is an assumption that pension levels are adjusted in line with the growth of wage rates rather than, for example, being held constant in real terms. This in turn is found to imply that earnings grow at the same rate as the wage, so long as preferences are such that leisure can be expressed as a proportion of full income. [source] Developmentalism in Korea: A Useful Tool for Explaining the Role of Social Security in the Reduction of Poverty and InequalityASIAN SOCIAL WORK AND POLICY REVIEW, Issue 2 2008Sang Kyun Kim It is conventional wisdom that universalism is more effective than selectivism in addressing the problems of poverty and inequality. In providing income security for the elderly, retirement pensions calculated on the principle of social insurance represent universalism and social assistance benefits on the basis of means-test selectivism. Korea has both a contributory pension scheme and social assistance program for the elderly. The social assistance began in 1961. The contributory scheme, the National Pension, started belatedly in 1988 and its coverage expanded to the entire population in 1999. We can, therefore, expect that the social security system, especially the universal pension scheme based on social insurance, has some positive impacts on the reduction of poverty and inequality. This paper, however, raises doubt as to the conventional wisdom and thus reviews the developmental process of the Korean social security system for the aged. It was found that the dominant ideological controversy revolved, not around universalism versus selectivism, but around the option between developmentalism and other strategies. Our empirical analysis showed that the public pension had little impact on the reduction of poverty and inequality, particularly in comparison with advanced welfare states. This is not surprising at all, since poverty eradication and redistribution were not major objectives of the Korean social security system. The controversy between universalism and selectivism was relatively unfamiliar in the policy process of the Korean social security system. Even though the redistributive effect is getting larger as the National Pension system becomes mature, the developmentalist model has been proved to be a more useful tool for explaining the limited role of Korean social security. [source] THE TROUBLE WITH FINAL SALARY PENSION SCHEMESECONOMIC AFFAIRS, Issue 4 2006Nick Silver The decline in final salary pension schemes (FSS) is a result of increasing costs caused in part by legislative interference. In this paper it is argued that FSS have always been detrimental to the economy. In a misguided attempt to save FSS, the government risks bankrupting large sections of the British corporate sector. Other policy measures could allow greater flexibility for trustees of pension schemes and remove counter-productive legislation and encourage innovative market-based solutions to pensions problems. [source] HOW TO CLEAR UP THE PENSIONS MESSECONOMIC AFFAIRS, Issue 3 2003David Simpson All three pillars of the British pensions system are crumbling. The basic state pension is unsustainable in its present form. Defined benefit occupational pension schemes are fast disappearing, and with them the retirement hopes of millions of workers. A further 3 million low-income earners are not saving enough for their retirement. And uncertainty about pensions choices is widespread. In each case the primary cause of the problem is governmental or regulatory failure. The paper makes eight general and four specific proposals for restoring the system. [source] Correlation and the Pension Protection Fund,FISCAL STUDIES, Issue 2 2006Paul Sweeting Abstract In this paper, I use a stochastic approach to model the effect that correlations between pension scheme assets and firm values should have on the premiums chargeable by the Pension Protection Fund. In particular, I look at the effect on the aggregate premium that should be charged considering a representative universe of companies and their pension schemes. I find that ignoring the correlations, even if the volatility of pension scheme assets is allowed for, leads to potentially serious underestimation of the aggregate premium due. [source] Pricing Pension Insurance: The Proposed Levy Structure for the Pension Protection Fund,FISCAL STUDIES, Issue 4 2005David McCarthy The UK Pension Protection Fund (PPF), established by the 2004 Pensions Act to protect beneficiaries of defined benefit pension schemes when the sponsor becomes insolvent and the scheme is underfunded, is required to finance itself through a levy on participating schemes. In July 2005, the PPF issued a consultative document setting out its proposal for the structure of the levy. In this paper, we provide a critique of the proposal and, in particular, its heavy reliance on securing levy income from the weakest schemes. We propose an alternative structure for the levy that recognises the limits on capacity to pay and also mitigates some other undesirable features of the proposal. [source] Ageing and the tax implied in public pension schemes: simulations for selected OECD countriesFISCAL STUDIES, Issue 2 2004Robert Fenge Abstract A key figure suited to measuring intergenerational imbalances in unfunded public pension schemes is given by the ,implicit tax rate' imposed on each generation's lifetime income. The implicit tax arises from the fact that, quite generally, pension benefits fall short of actuarial returns to contributions paid to these systems while actively working. Under current pension policies, implicit tax rates will increase sharply for younger generations in most industrialised countries. In this paper, this is illustrated for the cases of France, Germany, Italy, Japan, Sweden, the UK and the USA. Nevertheless, there are remarkable differences across countries regarding both the level of implicit taxes and their development over successive age cohorts, which can be attributed to differences in ageing processes and in the institutional features of national pension systems. In addition, we can demonstrate how effective different approaches to pension reform are in smoothing the intergenerational profile of implicit tax rates. [source] The tax treatment of UK defined contribution pension schemesFISCAL STUDIES, Issue 1 2002Philip Booth Abstract The paper aims to clarify the tax status of pension schemes in the UK and, by using economic and other arguments, to establish a theoretical benchmark that could be considered the ,appropriate' tax regime for pension saving. We consider existing tax regimes for saving (such as the ,ISA' regime) and theoretical regimes (such as a pure expenditure tax and a comprehensive income tax) and we compare the costs different tax regimes impose on defined contribution pension schemes. We conclude that an expenditure tax is an appropriate benchmark tax regime for pension saving, and that other tax regimes impose additional financial as well as administrative costs. [source] The Politics of Social Learning: Finance, Institutions, and Pension Reform in the United States and CanadaGOVERNANCE, Issue 4 2006DANIEL BÉLANDArticle first published online: 27 OCT 200 Because the traditional concept of social learning has faced significant criticism in recent years, more analytical work is required to back the claim that the lessons drawn from existing institutional legacies can truly impact policy outcomes. Grounded in the historical institutionalist literature, this article formulates an amended concept of social learning through the analysis of the relationship between finance, social learning, and institutional legacies in the 1990s debate over the reform of earnings-related pension schemes in the United States and Canada. The article shows how social learning related to specific ideological assumptions and policy legacies in the public and the private sectors has affected policymaking processes. At the theoretical level, this contribution stresses the political construction of learning processes, which is distinct from the technocratic model featured in the traditional literature on social learning. This article also distinguishes between high- and low-profile social learning while emphasizing the impact of private policy legacies on learning processes. [source] A comparative study of the relationship between pension plans and individual savings in Asian countries from an institutional point of viewINTERNATIONAL JOURNAL OF SOCIAL WELFARE, Issue 4 2010Mann Hyung Hur Hur MH. A comparative study of the relationship between pension plans and individual savings in Asian countries from an institutional point of view Int J Soc Welfare 2010: 19: 379,389 © 2009 The Author, Journal compilation © 2009 Blackwell Publishing Ltd and the International Journal of Social Welfare. This study identifies various saving plans used as alternative pension plans in Asian countries and examines the extent to which these saving plans contribute to their pension schemes. Data were collected from six Asian countries: China, Hong Kong, Japan, Korea, Singapore and Taiwan. The comparison concentrates on an examination of differences and similarities in individual countries' privately managed pension schemes and saving plans. This study suggests that a pension system does not have to be a privately managed plan to encourage individual savings. A critical point for individual savings was avoiding a defined benefit plan. On the basis of these findings, a typology of relationships between second and third pillars and provident funds and incentive systems for individual savings was developed. [source] New avenues to be opened for social protection in the Arab world: the case of Egypt,INTERNATIONAL JOURNAL OF SOCIAL WELFARE, Issue 1 2004Markus Loewe This article looks at social protection in the Arab world. Giving the example of Egypt, it asks why poverty is so widespread and why , despite the country's numerous social protection systems , social risks are a major contributing factor to it. It concludes that reforms are due. The existing systems are well funded but inefficient and more to the benefit of the better-off than the poor. A reform approach is proposed which builds on both conventional and more innovative strategies: campaigns should be launched to raise public awareness of social risks; social assistance spending should be increased; and the operating public pension schemes should be reformed. At the same time, new avenues have to be opened to meet the specific needs of informal sector workers who have extreme difficulty in being covered by social insurance or social assistance. To this purpose, micro-insurance is a promising approach for the Arab-world region. [source] Low Public Expenditures on Social Welfare: Do East Asian Countries have a Secret?INTERNATIONAL JOURNAL OF SOCIAL WELFARE, Issue 1 2000David Jacobs This paper explores the sources of low public expenditures on social welfare in Japan, Korea, Taiwan, Hong Kong and Singapore. Six factors are analysed based on aggregate data: the public/private mix of welfare programmes, the age structure, the maturity of old-age pension schemes, the population coverage of social security, the relative generosity of social security and the role of enterprises and families as alternative providers of welfare. The evidence allows putting some conventional statements about the virtues of East Asian welfare states into questions. Public expenditures on welfare are bound to rise a lot in Japan, Korea and Taiwan, while the level of protection in Hong Kong and Singapore is well below the standards of Western countries. [source] The recalibration of the Danish old-age pension systemINTERNATIONAL SOCIAL SECURITY REVIEW, Issue 2 2003Niels Ploug Pension reform in Denmark in the 1990s is of general interest owing to the development of a system of funded, defined contribution pension schemes based on collective agreement between the parties in the labour market. The resulting pension system seems to hold some answers to the critique of funded pension schemes. This paper analyses the process which led to the 1991 pension reform and relates the discussions and solutions found in Denmark to the international debate on pension reform. [source] The development and Reform of Social Security Pensions:The Approach of the International Labour OfficeINTERNATIONAL SOCIAL SECURITY REVIEW, Issue 1 2000Colin Gillion The reform and the development of pension schemes are affected by the values society places on the provision of income security in old age and the resources it is prepared to allocate for the purpose. This paper examines those values and the issues arising from them. The objective is to propose reforms which will simultaneously provide full coverage with good governance, prevent poverty in old age, and result in indexed, guaranteed and reliable pensions for those onaverage incomes, all with minimum economic distortion or adverse economic effects. The question of the most appropriate design has to be weighed against these other factors, which will determine not only what is feasible and what is not, but also where the most desirable balance lies. The optimum structure would seem to involve a mix of defined benefit and defined contribution schemes. [source] Detecting year-of-birth mortality patterns with limited dataJOURNAL OF THE ROYAL STATISTICAL SOCIETY: SERIES A (STATISTICS IN SOCIETY), Issue 1 2008S. J. Richards Summary., Late life mortality patterns are of crucial interest to actuaries assessing risk of longevity, most obviously for annuities and defined benefit pension schemes. The stability of public finances is also affected, as the governments have very substantial risk of longevity in the form of state benefits and public sector pension schemes. One important explanatory variable for late life mortality patterns is year of birth. Previous work has demonstrated various techniques for detecting such patterns, but always with long time series of mortality rates. The paper describes two alternative ways to detect such patterns, even with missing population data or the absence of a time series. The paper finds support for the idea that different birth cohorts have different rates of aging. [source] THEORETICAL FOUNDATIONS OF PAY-AS-YOU-GO DEFINED-CONTRIBUTION PENSION SCHEMESMETROECONOMICA, Issue 2 2008Sandro Gronchi ABSTRACT The paper inquires into notional defined contribution pension schemes, which retain the pay-as-you-go financing method while adopting the award and indexation formulas typical of funded, defined-contribution systems. It examines the properties of the new arrangement and compares them with those of the traditional defined-benefit pay-as-you-go schemes. [source] Perspektiven der Alterssicherungspolitik in Deutschland ,Über Konzeptionen, Vorschläge und einen angestrebten ParadigmenwechselPERSPEKTIVEN DER WIRTSCHAFTSPOLITIK, Issue 4 2000Winfried Schmähl The paper outlines different concepts for designing pension policies linked to current reform proposals in Germany. The role of the state, mandatory or voluntary savings for old age and the primary objectives and types of income redistribution aimed at by the design of pension schemes are central. In contrast to the economic debate which is dominated by the topic pay-as-you-go (PAYG) versus funding, the author argues that it is especially important to deal with changes within the major German PAYG-financed scheme in order to realize positive economic and social effects, especially by a close contribution??benefit link as part of a broader reform concept. There are, however, limits to an overall reduction of the pension level in such a pension scheme, if a close contribution??benefit link is to remain politically acceptable. Here this is demonstrated by current reform proposals for substituting a major part of PAYG pensions by funded pensions in Germany. The paper also points out some hidden, implicit and long-term effects of such a strategy. Finally, the author refers to some often neglected effects in mainstream proposals for a major shift towards funding. [source] The Current Situation of Retirement Income Provisions in Japan: Social Security Pension Schemes and Corporate Pension PlansASIAN SOCIAL WORK AND POLICY REVIEW, Issue 2 2009Junichi Sakamoto Japan has been faced with rapid population ageing for decades. This has continuously reduced the level of social security pension benefits. Based on this it is often said that corporate pension plans should play a wider role forward in providing retirement benefits. However, we also have to know that there is a limit to what corporate pension plans can do in place of the social security pension schemes. In this paper we extract lessons from the history of social security pension schemes in our country and try to define the roles of corporate pension plans and social security pension schemes. In conclusion we should keep adequacy of social security pension benefits even if the contribution rate becomes a bit higher. Corporate pension plans just enrich people's life in retirement. We have to remember that corporate pension plans were not certain means for reducing the poverty in old age and that for this reason social security pension schemes by social insurance were invented. [source] | ||||||||||||||||