National Pension Scheme Research Articles

A Policy Proposal to Strengthen the Income Redistribution Function of the National Pension Scheme in South Korea: An Analysis of South Korea’s 5th National Pension Comprehensive Plan (Draft)

In this study, we elucidate the income redistribution effects of the proposal to incorporate the Bend Points mechanism of the U.S. OASDI into the Korean National Pension Scheme (BP-KNPS Proposal) through a micro-simulation analysis using individual data from the Korean Labor and Income Panel Study (KLIPS). In addition to examining the effects of introducing the BP-KNPS Proposal into the current National Pension Scheme (NPS), we also consider the impact of this scheme being combined with the 5th National Pension Comprehensive Plan (Draft), announced by Korea’s Ministry of Health and Welfare on 30 October 2023. When the BP-KNPS Proposal is introduced into the current NPS, the Mean Log Deviation (MLD) of the net transfer amount (lifetime pension benefits minus lifetime pension contributions) for regular employees decreases from 0.2022863 to 0.1929960. Similarly, the MLD for self-employed and irregular workers decreases from 0.2046127 to 0.1721433, indicating a reduction in income inequality. Furthermore, when the BP-KNPS Proposal is combined with the 5th National Pension Comprehensive Plan (Draft), the effects are mixed. The proposals to increase the pension contribution rate and adjust the rate increase speed via generation lead to a reduction in income inequality compared to the current NPS when combined with the BP-KNPS Proposal. However, the proposals to raise the pensionable age result in increased income inequality, similar to the outcomes under the current system. This finding suggests that the triple burden identified by literature review—the reduction in benefits due to disparities in contribution periods and life expectancy, and the raised pensionable age—has a greater impact on low-income participants than the inequality-reducing effects of the BP-KNPS Proposal.

Bonds and Pensioning Scheme

The abstract provides an overview of national bonds and pension schemes. National bonds, issued by governments, offer investors a safe investment option with fixed or variable interest rates. They are used to finance government projects and are considered less risky than corporate bonds due to government backing. However, they carry risks such as interest rate and inflation risks. Pension schemes are essential for retirement planning, but their structure and benefits vary. Individuals should assess their options and supplement pensions with additional savings for a secure retirement. Key Words: Retirement planning, Pension schemes, Government debt.

An Exploration of Investment Strategies within Zambia's National Pension Scheme Authority

As a critical state-owned enterprise administering billions in retirement assets, NAPSA's investment governance has substantial fiscal and welfare implications for Zambia. Investment strategies in government institutions involve a systematic and comprehensive approach to managing public funds for various purposes, such as infrastructure development, pension fund assets, and bond proceeds. However, there has been little scholarly investigation into the real- world dynamics, drivers, and performance impacts of NAPSA's investment strategies, policy decisions over its recent history. This study aimed to bridge that knowledge gap through qualitative analysis of NAPSA's investment strategy formulation, risk management approaches, implementation processes, and financial results over the past two decades. The primary instruments for data collection in this study were semi-structured interviews and focus groups, both conducted remotely via Microsoft Teams. The data analysis for this study was undertaken using thematic analysis. This approach was instrumental in interpreting the data collected from the interviews and focus groups. Furthermore, qualitative documents like reports provided corroborating context. Together these primary data resources facilitated nuanced analysis around the multi-layered drivers and impacts influencing NAPSA’s investment governance – aligning techniques tightly with exploratory research goals seeking elucidations to inform potential policy enhancements. The findings revealed that NAPSA maintained a diversified investment portfolio across various asset classes. Formalization of developmental impact assessment measures and the strengthening of specialized analytical competencies are amongst the recommendations. These steps are important for NAPSA to continue effectively managing its substantial assets in a manner that supports both the welfare of its pensioners and the broader economic interests of Zambia.

Qualitative Analysis of Early Pension Withdrawal in Defined Benefit Schemes: A Case National Pension Scheme Authority (NAPSA)

This paper aims to look at model retirement behavior with a focus on early retirement where there is an option for “buy‐outs”. An employer can offer employees generous pension programs if the employees agree on early retirement. Earlier studies have neglected such offers, but in doing so, estimates of the individuals’ responses to financial incentives in a retirement decision are likely to be biased upward. Design/methodology/approach The authors propose an estimation strategy where the retirement decision and the accesses to early retirement pension (ERP) offers are estimated in a simultaneous equation system, yielding unbiased estimates of the model parameters. They apply the model using detailed Swedish register data.

Investment in National Pension Scheme: Issues and Trends

Purpose: Retirement is a time to leave from the job or work forever. Investing for retirement plays an important role. This study makes an effort to evaluate the various issues and trends of the investment in the National Pension Scheme (NPS) by an individual. Since the primary goal of this study was to assess the issues and trends of the investment in the National Pension Scheme for retirement benefits, and the study also evaluates its advantages, benefits, constraints, and disadvantages through ABCD analysis. Design: This research is conducted through secondary sources in order to provide a full-fledged evidence-based study on the issues and trends in the investment on National Pension Scheme. The semi-systematic review is conducted using various published reports and articles from sources including Springer, Tailor & Francis, Emerald, Google Scholar, Srinivas Publication, Research Gate, SSRN, etc. Findings: The result of compressive review revealed that in India, people save as a part from their income but very few invest for their retirement. The reasons for not investing for retirement is classified under two major factors i.e., internal and external factors. NPS provides pension scheme as well as investment scheme which allows the member to choose their investment in different assets. Unfortunately, due to lack in financial literacy and financial knowledge on the investment of retirement products and plans. Practical Implications: This research provide a guide for members who wish to invest for their retirement and create an awareness of the numerous challenges by the citizens by the policy makers and improved performance for the benefit of the citizen. It serves as a source of information for NPS users to comprehend the advantages of enrolling in pension plans for their retirement. Originality/value: This study as per the secondary data may provide overall view on the National Pension Scheme and may help the customers for better understanding about the pension scheme and also assist the policy makers and pension regulator to promote investment on the retirement plans; but the concept of NPS can be better understood through primary survey, therefore it is the limitation of the study. Paper type: Case Study.

Intergenerational actuarial fairness when longevity increases: Amending the retirement age

Continuous longevity improvements and population ageing have led countries to modify national public pension schemes by increasing standard and early retirement ages in a discretionary, scheduled, or automatic way, and making it harder for people to retire prematurely. To this end, countries have adopted alternative retirement age strategies, but our analyses show that the measures taken are often poorly designed and consequently misaligned with the pension scheme's ultimate goals. This paper discusses how to implement automatic indexation of the retirement age to life expectancy developments while respecting the principles of intergenerational actuarial fairness and neutrality among generations of the respective policy scheme design. With stable demographic conditions, we show in policy designs in which extended working lives translate into additional pension entitlements, the pension age must be automatically updated to keep the period in retirement constant. Alternatively, policy designs that pursue a fixed replacement rate are consistent with retirement age policies targeting a constant balance between active years in the workforce and years in retirement. Under conditions of population ageing, the statutory pension age will have to increase at a faster rate to meet the intergenerational equity criteria. The empirical strategy employed a Bayesian Model Ensemble approach to stochastic mortality modelling to address model risk and generate forecasts of intergenerationally and actuarially fair pension ages for 23 countries from 2000 to 2050. The findings show that the pension age increases needed to accommodate the effect of longevity developments on pay-as-you-go equilibrium and to reinstate equity between generations are sizeable and well beyond those employed and/or legislated in most countries. A new wave of pension reforms may be at the doorsteps.

A Study on National Pension Scheme in India with Special Reference to Karnataka

The paper reviewed the National Health Insurance scheme and accessed the possibility of a single premium for decade. The entire paper had its base of a single premium for a decade that is feasible enough to sustain the scheme, to identify alternative means of generating income to sustain the Kassena Nankan District Mutual Health Scheme and to assess the perception of registered and potential clients on the NHIS. The research design employed was statistical survey and both qualitative and quantitative data were collected from a sample of 100 respondents. The research study has its justification from the current government’s intention to implement a single premium system for the NHIS. The research findings emphasised the inclusion of age distribution as key variable to avoid all ages

Implementing a Public Policy to Extend Social Security to Informal Economy Workers in Zambia

This article analyses the strengths and bottlenecks of institutional capacity between social security institutions implementing the reform in Zambia, which focuses to provide social security to small-scale dairy farmers, a group of informal economy workers. Zambia’s informal economy workers absorb over 80 per cent of the labour force. This is a qualitative study of institutional capacity in the extension of social security. Twenty-one interviews were conducted with participants from Farmers’ Cooperatives (MCC), National Pension Scheme Authority (NAPSA), and Dairy Association of Zambia (DAZ). We selected participants through a purposive sampling technique. We reflected on data using a Consolidated Framework for Implementation Research (CFIR) built on thematic analysis. Analysis suggests that the institutions of the partnership are committed towards extending social security to informal economy workers. There was low involvement of local NAPSA officers in the project design and their role during implementation of the pension extension was unclear. This contributed to a lack of trust by some non-NAPSA members towards social security institutions. Knowledge and beliefs about the capabilities of implementers were essential in the activities for implementing the public policy on the extension of social security. However, there are several implementation lacunas concerning the process, its overarching infrastructure, and adequate human resources. There is a critical need to address gaps in process and procedures, equipment and materials, infrastructure, human resource, trust, and knowledge of context for the extension of social security to informal economy workers in Zambia. This could make the new public policy scheme more attainable.

The pan-European Personal Pension Product: key characteristics and main challenges

Against the background of increasing challenges within the European Union related to ageing societies, a prevailing low interest environment, increasingly mobile life and work across the EU and the general distribution of wealth, several stakeholders within the EU have acknowledged the need to support the adequacy of national public pension schemes. This resulted in the conception of a Pan-European Personal Pension Product (PEPP), voluntary and portable across the European Economic Area (EEA), aiming at combining profitability, transparency as well as the security and quality of the related investments. Embedded into the greater scheme of the aspired European Capital Markets Union, PEPP is intended as simple and affordable savings option for everyone with the goal of closing the pension gap. This paper revisits the process towards the current, finalized state of PEPP, exploring its product features, regulatory requirements and key challenges with regard to the possible emergence of products since 2022.

An Analytical Study on Tax Planning Measures by Salaried Women Assessees of Multinational Companies in Bangalore

The aim of the paper ‘An analytical Study on Tax Planning Measures by Salaried Women Assessees of Multinational Companies in Bangalore’. is to spread awareness about the importance of tax payment and the schemes available for individual tax payers in Multinational companies under the Income Tax Act, 1961. Taxes are looked at as unnecessary burden and many people find it unjust to pay more taxes as their income increases. This paper will bring up the positive effects of timely tax payment and the benefits that can be enjoyed along with it. Taxation is supposed to be a helping hand for the overall development of the nation. In karnataka, Government and Non-government employees invested more on investment than on philanthropic items and, they invested more in provident fund, national pension schemes , life insurance schemes and group insurance, which were a mandatory for them.

A COMPARATIVE STUDY ON THE PERFORMANCE OF NIFTY 50 AND EQUITY FUNDS UNDER TIER-II OF NATIONAL PENSION SCHEME

The National Pension Scheme (NPS) is a defined contribution and a corporate pension fund that provides financial assistance to all Indian citizens. There are two types of accounts in the National Pension Scheme: Tier I and Tier II. Tier I is a mandatory deposit pension fund account and Tier II is a voluntary pension account. Tier I and Tier II is are consisted of different assets namely, equity, government security and alternative asset. The equity schemes are directly linked with the market. The return of all the fund managers in equity schemes are not same as the portfolio of all the fund managers are not same. Secondary data has been collected from respective websites of Pension Fund Managers and has been used to calculate mean, SD, Variance, and Correlation to predict the performance of equity funds. ANOVA and T-test have been for assessing the comparative analysis of the different fund managers under equity scheme in tier II. As per the study, LIC PF and ICICI PF are the best performer during the study period. The performance of SBI PF is poor among other equity funds under Tier-II of NPS during the study period. In term of risk, LIC PF is the higher risky equity fund and UIT PF is the lowest risky equity fund under Tier-II of NPS. It can be said that investors need to be high-risk taker to invest in that LIC PF. Through the risk analysis during said period of time, it is found that the ability to observe risk differs in equity funds under Tier-II of NPS. The main reason for this being a voluntary account of Tier -II. As there is no lock-in period in this account, the investors mostly use for a short-term purpose. In the recent decision of the government, Tier-II offers a lock-in period for 3 years with tax benefit. This decision may be affected the investment pattern of the investors. KEY WORDS: - National Pension Scheme, Performance, Equity Scheme, Nifty 50

The Indian National Pension Scheme (NPS): A Retirement System that got even better

The Indian National Pension Scheme (NPS): A Retirement System that got even better

National Pension Scheme in India: Functions and Performance

National Pension Scheme is a mandatory for all central and state government employees who joined in services after 2005. Although the scheme is implemented in 2006, most of the government employees are unknown about the benefit of the same scheme. Hence, this paper highlights functions of national pension scheme and performance of pension fund managers in terms of its return in 2020. ANOVA tool is employed for analyzing differences in return by pension fund managers. The study is concluded that HDFC pension fund gives more return other than pension fund.

A Proposed Methodology for Modelling the Solvency of a National Pension Scheme

The main aim of this study is to fit a model for predicting pension liability. The study proposed a stochastic population model to determine the status of a pension scheme. By categorizing the members of the Social Security and National Insurance Trust (SSNIT) pension scheme of Ghana into five groups, the birth and death process with emigration and the pure death process coupled with assumption of the Yule’s process, were combined to successfully formulate a model for forecasting the surplus of SSNIT to be used as a proxy for assessing the solvency status of the scheme. The reliability of the proposed model was corroborated by very high coverage probabilities of the estimates of expected surpluses produced. The study demonstrated how easy it is to use the proposed model to carry out sensitivity analysis which allows the exploration of various scenarios leading to formulation and implementation of policies to enhance the solvency of the scheme. One major advantage of the proposed model is that, it uses more information (variables) compared to others proposed elsewhere for the same purpose. This contributes to the precision of estimates from the model. A key finding of the study is that SSNIT would have still been solvent had she increased pension by 50%.

Pension Finance Literacy of Indian Government Employees with Respect to the National Pension Scheme

Pension finance literacy of individuals in India is still at a nascent stage owing to low interest and lack of awareness in this sector. The Government of India, in 2004, introduced the National Pension Scheme for government employees in place of the Old Pension Scheme. A survey was done to examine employees’ awareness about the new scheme and understand whether they were aware of the various features of the scheme. The survey included a questionnaire designed specifically for government employees and included questions regarding the scheme’s features and characteristics. Another aim of the survey was to inspect the satisfaction level of the people from the new scheme. The participants included Central and State government employees. Analysis of the results was done using t-test and ANOVA. The effect of demographic variables such as education, gender, income, and marital status on government employees’ pension finance literacy was measured. The results revealed the mixed response of employees. Although a good number of people were found to be aware of the various aspects of the scheme, demographic variables majorly affected the awareness level. Employees were found to be dissatisfied with the scheme’s performance. People wanted some changes in the scheme in aspects such as withdrawal and taxation and generally thought that the scheme was not employee-friendly. Based on the discussion with employees, some suggestions have been put forward so as to make the scheme more alluring.

Indian older adults and the ‘familialist’ state policies

AbstractThis article is based on an analytic review of two major policy responses to the increasing demographic salience of older adults in India. Set against the backdrop of anti‐natal family policies in India, the review focuses on two policy measures: the discontinuation of the earlier pension scheme alongside the commencement of the National Pension Scheme in 2004 and the enactment of The Maintenance and Welfare of Parents and Senior Citizens Act, 2007. The analysis of these policies reveals the Indian state's increasing reliance on multiple forms of familialism and is indicative of the direction of family policy making in India. This review also indicates a need for specifying and critically engaging with such forms of familialism within the broader rubric of emerging family policies in the Asian context.

A dynamic behavioral model of Korean saving, work, and benefit claiming decisions

The Republic of Korea faces a rapidly aging population that is more reliant on public pension support but pension contributions are insufficient to support its long-term obligations. As a result, there is a growing debate on what type of reforms to the current defined-pension system could balance the long-term funding of the system with insuring benefit levels for old and new beneficiaries. In this paper, we develop and estimate a dynamic behavioral model that captures essential elements of the National Pension Scheme (NPS) and behavioral responses in labor supply, savings and benefit claiming to changes in the public pension system using a nationally-representative sample of married couples nearing retirement from the Korean Longitudinal Study of Aging (KLoSA). We use the model estimates to evaluate the effect of counterfactual policy experiments such as increases in the contribution rate and the extension of normal retirement age on the decision to work or not work, savings and benefit claiming among individuals near retirement. While these policies are aimed at shoring up the NPS, our model demonstrates that changes to the contribution rate could discourage work and savings in married households near retirement. In particular, a 2 percentage point immediate increase in the contribution rate would reduce household savings by 2 percent among poor households, as well as reduce labor participation among wives by 3 percent and among husbands by less than a percent. When we simulate the same increase in the contribution rate in even increments over five years, households anticipate the policy change and increase their savings to compensate for the future fall in income, dissipating undesirable behavioral responses such as decreased work and savings. In contrast, an increase of 2 years in the normal retirement age leads to a 3 percent increase in household savings, and to an increase in both husband and wife labor force participation (less than 1 percent and 3 percent respectively). These finding suggest policy design, such as phase-in periods, can be leveraged to minimize undesirable behavioral responses of households near retirement. Despite their potential detrimental effects in labor supply and savings, findings from a benefit-cost analysis suggest that the costs of undesired behavioral responses to an increase in contribution rates are orders of magnitude smaller than the revenue benefits to the NPS's finances.

Information Literacy as a National Agenda: A Case Study of Singapore

Singapore is a small country in South East Asia with a population of some 3.7 million. It achieved independence from Britain in 1965 and since then has made remarkable progress as a nation, so much so that other countries are now looking closely at its policies with a view to discovering its secrets of success. While the policies attracting attention range from Singapore's national pension scheme to the way in which traffic flow is controlled, the major area of interest here is to investigate the country's promotion of information literacy.
 Singapore is largely devoid of natural resources, so there has always been an emphasis on seeing people as capital. As in many Asian countries, cheap labour was at first the basis for building strong manufacturing industries to earn revenue by exporting goods to richer nations. Economic growth would occur as long as inputs of labour and of capital investment went on growing, but eventually this would slow because the sources of these inputs are finite. Krugman (1994) described this as the "perspiration theory": success was based on working harder, not working smarter. Krugman's writings aroused hostile reaction in many Asian countries, but even he did not predict the extent of the economic crisis in the region during the late 1990's. By this time, though, Singapore's leaders were working on the problem and laying the foundations that would produce a workforce with something more to offer than perspiration.

존재론과 인식론이 사회과학 연구에 미치는 실질적인 영향 : 국민연금제도 연구사례를 중심으로

존재론과 인식론이 사회과학 연구에 미치는 실질적인 영향 : 국민연금제도 연구사례를 중심으로

An Alternative Approach of Handling the Outlier: A Case with Indian NPS

Time series modelling is very popular technique used in data science. Main motive of time series modelling is to know the data generating process and also get its parameters which depend on all the observations. There may be few observations which misinterpret the data and also influence the parameters, such type of observations are called Outlier. The present study dealt the handling of outlier in context of ARIMA time series and proposed an alternative approach for the replacement of outlier. In usual process two ways of handling the outlier is popular, in first remove the outliers from the data and second replace it by the nearby values. Removal concept cannot work in the auto-correlated data like time series and similarly replacement of outlier through just previous/after value is also not much appropriate method because of dependency structure. Therefore, we are proposing an alternative approach, in which outlier is replaced by estimated values through best model. Detailed methodology is discussed and then an empirical analysis on the time series of National Pension Scheme (NPS) is carried out. Most of the series are modelled perfectly and few series were not due to non-stationary nature of the series. After getting an outlier free series, forecasting is also done. The realization of the series also performed on proposed methodology to get generalized view of proposed methodology and get similar result.