Estonia

Life expectancy has been rapidly increasing and remains uncertain in all OECD countries, including Poland. One of the many economic and social consequences of this process is the increase of the longevity risk in social security systems. This article focuses on the issues of managing longevity risk in the pension system in Poland, in particular - the construction of public and supplementary pension systems and its ability to adapt to the challenges associated with longevity risk. Particular attention has been paid to the analysis of public structures and supplementary pension schemes in the phase of payment of benefits (decumulation). The research work, of which the results are presented in the article, is based on literature studies, comparative analysis, statistical analysis; as well as descriptive and explanatory methods. Also, a model of the two stages of pension risk created by T. Szumlicz has been used. The author argues that both the public pension systems as well as the supplementary pension schemes in Poland do not secure adequate protection against the risk of longevity. While in the public retirement system, the aggregate longevity risk exists, and the participants of additional pension systems are exposed to individual longevity risk. The limitation of these risks requires significant structural changes both in the public and in the additional pension schemes in Poland.

The aim of this article is to describe the Lithuanian pension system, its reform process and its long-term financial sustainability. We define therefore the current reforms in the public pension system, influenced by the last economic crisis and social challenges. Also, we forecast the financial dynamics of the public pension system, in the light of raising social expenses (due to second pillar pension reforms) and of demographic trends (like ageing society and low fertility). Results reveal the long-term sustainability of the system, albeit at a cost of initial negative balances to be covered with public budget. Policy solutions could improve sustainability by encouraging and extending employment (especially for the disadvantaged) and by building trust in both public and private pension systems.

Neoliberal political movements advocate privatization of public pension systems. Globalization imposes pressure on nations to conform to neoliberal policy views with respect to the design and structure of social insurance, including public pension systems.The paper begins with an investigation of the economic, ethical and ideological dimensions of the privatization debates in the U.S.; it argues that privatization advocates may be largely moved by ideology, since the other reasons advanced appear weak or unfounded. The second part discusses the history of Social Security, the purposes for its creation, and some of its economic effects. Differences between public and private pension systems are considered. A brief international comparison of some aspects of public pension system finance and benefit structures is presented.The final section considers the ethical, macroeconomic and distributional implications of privatization, prefunding and payroll tax funding, and argues for a pay as you go system financed with income taxes. In order to promote equity, economic security, community, and social cohesion, public pension systems should be universal in coverage. In order to reduce the inequality, income insecurity, and aged poverty generated by market economies, public pension systems ought to be progressive: benefit/contribution ratios should be inversely proportional to income, and progressive income taxes should finance the system. To promote economic growth, the systems should be financed on a pay-as-you-go basis, and should not be prefunded except for an emergency reserve. The fiscal policy recommendations partially depend upon the theory developed by Abba Lerner in the 1940s, and recently advanced by Wynne Godley and Randy Wray: Lerner's “principle of functional finance.”

This article briefly explains the main features of public and private pension systems, as well as structural and parametric pension reforms. Its core compares performance, within Latin America, between private pension systems in ten countries and public pension systems in eight countries, based on nine indicators: labor force coverage, ages of retirement and pension levels, gender equality, administrative costs, wage contributions, compliance, portfolio diversification in investment of pension funds, rates of returns of investment, and financial equilibrium. Contrary to what is often maintained, the article concludes that public systems perform better than private ones in most of those indicators.

Even with well-developed capital markets, there is no private market mechanism for trading between current and future generations, so a potential role for public old-age pension systems is to spread economic and demographic shocks among different generations. This paper evaluates the smoothing and propagation of shocks of three pay-as-you-go public pension schemes, based on the actual U.S. and German systems, which vary in the extent to which they rely on tax adjustments versus benefit adjustments to provide annual cash-flow budget balance. Modifying the Auerbach-Kotlikoff (1987) dynamic general-equilibrium overlapping generations model to incorporate realistic patterns of fertility and mortality and shocks to productivity, fertility and mortality, we evaluate the effectiveness of the three public pension systems at spreading the effects of such shocks. We find that the systems, particularly those that rely to some extent on tax adjustments, are effective at spreading fertility and mortality shocks, but that this is not the case for productivity shocks, for which the pension systems actually tend to concentrate the economic impact. These results suggest that both system design and the source of shocks are important factors in determining the potential of public pension arrangements to spread the burden of shocks.

The latest trend in educational attainment has gripped almost the entire world, even the most developed countries. Their concentration is now not only on the highest possible achievements but also contribution to the economic development of society. The study aims to analyze the gender-based trends in education attainment, specifically below upper secondary education, post-secondary non-tertiary education, and tertiary education, for the period of 2007–2021 in ten economically developed countries with the highest gross domestic product (GDP), as well as examine the relationship between education attainment and GDP growth. The result shows that men have a higher percentage of attainment than women in below upper secondary education and upper secondary non-tertiary education. Conversely, women have a higher percentage of education attainment at the highest level: tertiary education. Moreover, the analysis indicates a direct relationship between below-secondary and upper-secondary non-tertiary education and GDP growth, while a direct relationship exists between GDP growth and tertiary education. Consequently, policies for reducing gender disparities should be in place to stimulate the enrolment of young adults in those professions that contribute more to the economic output. The research has its limitations in that other countries are not included in the study and the quality of studies is not taken into consideration.

In the context of demographic aspects revealed by decreasing the birth rate, diminishing the active population average, life expectancy increases, and population aging trend, the public pension systems are confronting the financial sustainability gaps. Moreover, globalization and the free movement of people around the world can lead to several divergencies regarding the assurance of citizens’ social protection at the international level. Regarding these issues, Central and Eastern European countries are subject to the assessment of a fundamental reconstruction and settlement shift towards avoiding financial failure. In this chapter, we have conducted an empirical study towards modeling the financial sustainability of pension systems in Central and Eastern Europe. In this sense, we have created a panel data model in which the financial sustainability of pension systems in five Central and Eastern European countries has been tested. The conclusion of this chapter which is highlighted by the empirical testing results reveals the need for a structural change in the structure of pension systems in Central and Eastern European countries by tackling some important financial, legal, and social reforms.KeywordsFinancial sustainabilitySocial protectionEmploymentPension reformsDescriptive data

This research analyses the restrictive conditions for granting early retirement regulated by the provisions of Law no. 360/2023 on the public pension system in Romania, in the event that the individuals have completed several contribution periods, in different time intervals, both in the public pension system in Romania, but also in other pension plans or in a member state of the European Union. People who do not have a complete contribution period in any of the state pension systems in Romania cannot benefit from the recognition of the right to a pension. We note that several professional categories contribute to state pension systems, but are not integrated into the public pension system.

In this paper I review the latest development of China's public pension system. Last several decades saw China's tremendous achievement in various public pension reforms. Especially since the 11th Five-Year Plan (2006-2010), reform has accelerated. By 2019, the public pension system in China has covered almost one billion adults, which makes it the biggest pension system in the world. Together with the expansion of Dibao (Basic living allowance) and the eradication of poverty, the development of pension system has become the top agenda in current policy making of the Chinese government. Yet, challenges exist: unequal distribution of pension resource and the long-run unsustainability of the pension system are waiting to be addressed with increasing urgence. Although potential countermeasures, both based on international experience and with Chinese feature, has been proposed and piloted in both regional and national level, there are incremental pressure for further reforming the system. In the latest Five-Year Plan (2021-2015), the government has vowed to construct a unified, equitable, and sustainable pension system with full coverage. This is a very challenging yet exciting goal to achieve not only for the policy makers, but also for academic researchers and general public.

Our country has the highest divorce rate in the world, disgracefully. Recently, the payment of installment pensions, which receive half of the pension amount, has continued to increase for public pensions. The split pension system has been implemented in the national pension system since 1999, and the special occupational pension system has been implemented in 2016. Currently, the divided pension is taxed in half. However, this taxation system is not only less taxable than the existing taxation system, but may also have intentional tax evasion.
 A split pension can be seen as a type of property division. Currently, there is a taxable issue in the divided pension paid according to the marriage period and the period of office for the divided pension right. In this study, we would like to examine the split pension system in which payments are increasing as the divorce rate of the elderly increases rapidly, and to find problems with the taxation system and ways to improve it. The split pension is distributed by the principal beneficiary according to the marriage period and received by the principal beneficiary and the divorced spouse, and a somewhat small tax burden is incurred because they are received separately than the amount paid by the principal beneficiary. For this reason, even while maintaining a marriage, there is a possibility that the split pension may be abused by the method of disguised divorce for the purpose of reducing the tax burden. In light of this situation, this study attempted to raise the need to improve the tax system of the divided pension paid by the public pension and establish a tax plan for the pension tax system in line with the characteristics of the divided pension system. The taxation plan proposed in this study not only minimizes problems arising from the implementation of the public pension split pension system, but also aims to establish a reasonable taxation plan for the split pension system in accordance with the pension income taxation system. Policy alternatives in this study are expected to help tax authorities or related ministries establish policy alternatives in the future.

A Study on Japanese Fiscal Sustainability and Fiscal Discipline

(A Study on Japanese Fiscal Sustainability and Fiscal Discipline)

Saving public pensions: Labor migration effects on pension systems in European countries

This chapter provides an overview of current issues regarding public pension programmes and their reforms under population ageing in Japan. It summarises basic institutional backgrounds, presents policy projections under population ageing, and addresses issues that remain unresolved-all of which are expected to help understand how the Japanese pension system is responding to population ageing. The chapter presents a brief overview of the institutional features of Japan's public pension system and discusses the basic features of the 2004 pension reform. It assesses the post-reform pension system from a balance sheet viewpoint and discusses future reform options. The chapter discusses related issues regarding the public pension system-that is, the impact of pension benefits on the incentives to work for the elderly and on intra-generational income distribution. Keywords: income distribution; Japan's public pension system; population ageing

Iceland and the Netherlands presently have the best pension systems in the world, according to the Mercer CFA Institute Global Pension Index 2021. In the meantime, Indonesia ranked 35th. This study compares and analyzes Iceland’s and the Netherlands’ current pension systems as the finest in the world, as well as the future threats to their pension systems, and applies the lessons learned from both nations to Indonesia, which intends to alter its public pension system. According to a comparative analysis of Iceland, the Netherlands, and Indonesia, the overall pension systems of Iceland and the Netherlands are advantageous for ensuring adequacy and sustainability of the pension system. However, Iceland and the Netherlands may suffer adequacy and sustainability issues in the long run. As a result, they should continue to evaluate their own countries’ present structures, notably in demographics. Concerning the Indonesia pension system, Indonesia policymakers should consider enforcing the social security system, since these systems have enabled Iceland and the Netherlands to have lower poverty rates. Furthermore, the Indonesian government should strengthen the existing PAYG and DB pension systems, raise the minimum pension eligibility age, contribute to the system regularly, and apply the cost-of-living adjustments to improve the adequacy and sustainability of the civil service pension system. Simultaneously, civil servants should contribute more to ensure the long-term viability of this pension system. The Indonesian government should implement such adjustments, as they would enhance budgetary sustainability in the long run.