National Pension System Research Articles

Розвиток недержавного пенсійного забезпечення в умовах реформування пенсійної системи України

The efficient functioning of the non-state pension system, which forms the third level of the domestic pension system, is essential for increasing the incomes of citizens of retirement age. The article is aimed at defining the main ways of further development of the non-state pension system in the context of reforming the national pension system, creating favorable conditions for attracting an increasing number of the population to participate in voluntary accumulation pension programs. The article provides an assessment of the status of the non-state pension system in Ukraine, analyzes its main indicators for the last three years. The results of the study showed that today voluntary accumulation pension programs, which form the basis of the system of non-state pension provision, are not popular among the population. The main challenges and factors that hinder its development in our country are determined. The main directions of development of the system of non-state pension provision for the near future are proposed. Particular attention is paid to the expediency of introducing the tax-free voluntary automatic individual savings pension accounts in banks. Among the priorities for improving the functioning of the third level, an important place is to find ways to further develop the non-state pension funds (NSPFs), among which an increase in their reliability is to be highlighted. To assess the reliability of NSPFs as a socio-economic system, it is necessary to analyze such parameters as: presence of public trust in the fund; the fund’s ability to cash payments; financial condition of the fund. It is proved that the improvement of the legislative framework of the third level of the domestic pension system should ensure the protection of property rights and interests of participants in the non-state pension provision, as well as ordering the taxation of participants in the accumulation pension system. An extremely important direction for the further development of the third level of the national pension system is the reduction and optimization of the costs of administering individual pension accounts of participants in the accumulation pension programs.

A review of existing pension services in developed and developing countries

This paper examines the experience of organizing the pension system in developing and developed countries and develops recommendations for further improving the national pension system considering the specifics of the global economy. Besides that this paper aims at briefly comparing the indicators of average pensions in the world.

Modelos de financiarización de las pensiones en cuatro estados de bienestar europeos

Este artículo analiza la financiarización de las pensiones en cuatro estados de bienestar europeos: el Reino Unido, Alemania, los Países Bajos y Suecia. En estos estados de bienestar, los mercados y actores financieros se han vuelto cada vez más importantes en la provisión de las pensiones. La financiarización de las pensiones es un fenómeno varia-do, que implica cambios en el mecanismo de financiación, el diseño del plan, la gestión financiera y la centralidad de las pensiones de capitalización en la economía política. Las configuraciones nacionales específicas de estas dimensio-nes han creado patrones distintos de financiarización en los cuatro casos. Sostengo que cada patrón es el resultado de puntos de conflicto específicos para la reforma de dichas políticas, que han surgido del contexto institucional del sis-tema nacional de pensiones. La localización de estos ele-mentos de referencia institucionales ayuda a identificar me-canismos comunes de financiarización en todos los casos, que se caracterizan por una variedad empírica.

The Pension System in Modern Russia: Reform after Reform.

ABSTRACT In recent years, Russia has adopted a number of laws that have significantly changed the institutional structure of the national pension system (corporatization of pension funds, creation of a system for guaranteeing pension savings, and the freezing of funded pensions). In addition, a very controversial law raising the retirement age came into effect at the end of 2018, and the Bank of Russia and the Ministry of Finance of the Russian Federation have prepared a draft law creating a voluntary system of individual pension capital. Based on a comparison of the key demographic and pension indicators of Russia and countries in the Organization of Economic Cooperation and Development (OECD), the author concludes that there were no valid grounds for the recent increase in Russia’s retirement age (especially for men). He also calls into question the assertions of the draft law’s supporters concerning excessive transfers from the federal budget to the mandatory pension insurance system. Starting from the prior experience of the Russian Federation’s pension sector, an attempt is made to assess the extent to which the enacted laws will support growth in personal savings within voluntary pension schemes. In particular, it is shown that in the coming years, the system of individual pension capital currently under development can only partially replace pension contributions on the long-term money market.

El cambio de línea jurisprudencial en el acceso a la pensión de viudez a raíz de la sentencia recaída en el Exp. N° 00617-2017-PA/TC del Tribunal Constitucional

El artículo 53° del Decreto Ley N° 19990 del Sistema Nacional de Pensiones, prevé el derecho a la pensión de viudez, al que tiene derecho el cónyuge del asegurado o pensionista fallecido, otorgado a las viudas por dicha condición, en cambio, a los viudos se les exige que cumplan requisitos adicionales como que haya sido dependiente de la viuda, entre otros. Esa situación, a juicio de la autora, vulnera el derecho a la igualdad, en su manifestación de igualdad en la ley porque hace una diferenciación injustificada entre varones y mujeres, ya que no acceden a la pensión en igualdad de condiciones, además, el Tribunal Constitucional hasta hace unos meses atrás desestimaba demandas de amparo donde los viudos solicitaban acceder a la pensión aplicando el artículo 53°, sin embargo, recientemente dicha corporación cambió de criterio tal como se demuestra en el Exp. N°00617-2017-PA/TC, ya que declara fundada la demanda e inaplica el artículo 53° del Decreto Ley N° 19990 por vulnerar el derecho a la igualdad, a la vez, declara estado de cosas inconstitucional en relación al tratamiento legislativo desigual por sexo respecto de los requisitos para obtener pensión de viudez.

PROSPECTS FOR THE DEVELOPMENT OF FUNDED PENSION PROVISION IN UKRAINE

Purpose. The aim of the article is the analysis of the pension system of Ukraine and directions of its reform, clarification of the role of accumulative pension insurance in the system of social protection of the population, as well as study of the prospects for the introduction of a mandatory accumulative pension system in Ukraine. Methods of research. During the research, special economic literature related to the introduction and use of the funded pension system was developed, various economic methods are used, relevant normative and instructive documents in the field of pension provision, statistical data of the Pension Fund of Ukraine are used. Conducting research, the method of absolute and relative, average values and indicators of a number of dynamics is used in assessing the dynamics of the minimum, average pension, wages; the method of analysis using generalized indicators is applied in characterizing the income and expenditure of the Pension Fund of Ukraine. The legislative documents of the Verkhovna Rada of Ukraine was information base of the research, normative and instructive documents of the Cabinet of Ministers of Ukraine, statistical reporting of the Main Department of the Pension Fund of Ukraine. The relevant results of the study were facilitated by the use of special economic literature on the functioning of the national pension system, its reform and the possibilities of using the accumulative pension provision. Findings. The dynamics of the minimum and average levels of pensions in Ukraine over the past five years is analysed, their ratio to the average wage in Ukraine is determined, and the replacement rate is estimated. Attention is drawn to the need to use the State Budget of Ukraine for the needs of the Pension Fund in the payment of pensions to citizens of retirement age. The need to introduce the second level of the domestic pension system to restore the appropriate level of pension provision in Ukraine has been identified. The conditions and prospects for the introduction of mandatory funded pension insurance are analysed. The main bills concerning the practical use of the second level are described; attention is paid to the use of the main financial institutions that can be used at this level. Originality. The substantiation for the introduction of mandatory funded pension provision, which will increase the income of Ukrainian pensioners, has been further developed. The practical application of the second level of the domestic pension system will contribute to its formation as a holistic mechanism. A strong financial base of funded pension programs can be used for the development of the national economy. Practical value. The obtained results of the study provide a basis for further study of the theoretical foundations and development of practical recommendations for the introduction of mandatory funded pension provision and the development of the domestic pension system. Key words: accumulative pension provision, pension treasury, pension legislation, pension assets, average pension, Pension Fund of Ukraine, pension contributions.

A Study on Social Policy, Happiness and Social Support: Focusing on the Poor Elderly Women in Korea

This study recognizes the seriousness of poverty experienced by elderly women in Korea and to examine the relationship between various variables based on their understanding of the happiness they seek. For this purpose, a questionnaire survey was conducted on 293 poor elderly women over the age of 65 on social policy, social support, and happiness. From the collected data, it was confirmed whether satisfaction with two social policies, the national pension and the basic pension, affects the happiness of the poor. And it analyzed whether social support acts as a mediator in the path of the research model designed in this study. The analysis results of this study are as follows. First, through the verification, the reliability of the measured variables was secured, and it has been confirmed that the model designed in this study is a model that describes the relationship between social policy and the happiness of poor elderly women. Second, as a result of analyzing the effect of social policy on the happiness of the elderly in poverty, it was found that the national pension system and the basic pension system had a significant positive effect on the happiness of the poor elderly women. Finally, it was analyzed that there was a more positive effect when there was a mediating effect of social support in the relationship between social policy and the happiness of poor elderly women. Furthermore, based on the results of this study, the policy and practice direction for improving the happiness of the elderly in poverty were presented.

Mortality dynamics and the statutory retirement age proposal: an actuarial view

ABSTRACT This paper aimed to apply (dynamic and static) actuarial models to calculate the balanced contribution rates for the planned (at the minimum age) retirement benefit of the General Social Security System, based on the original and substitutive texts of the reform proposed by Michel Temer’s government. Even with the regular increases in life expectancy and the long-term nature of the analyses, national studies on social security are typically based on the static mortality hypothesis. The relevance of this study is evident due to the demographic changes, particularly the increase in life expectancy, experienced by the Brazilian population in recent decades and which put in question the sustainability of the national pension system. The use of dynamic actuarial models allows for more accurate discussions about the future of social security, besides contributing to the still scarce national literature. Static and dynamic actuarial models were applied to a representative individual, adjusting mortality tables from the United Nations covering 1950 to 2100. It was verified that the actuarially fair rates calculated by the dynamic actuarial model are typically higher than those obtained by the static model, especially for women. This difference is expected to increase as gains in life expectancy become more influenced by the reduction in mortality at more advanced ages. Moreover, if the social security reform is approved (in accordance with either the original or the substitutive text), there are indications from the dynamic model that the contributions rates currently charged would be excessive for men. In turn, these rates would be excessive for women considering the original text, and closer to the actuarially fair value considering the substitutive text. The development, disclosure, and regular updating of official dynamic tables (whether for mortality or other biometric assumptions) are also recommended.

국민연금제도에 내재된 젠더 차이 변화 연구: 제도의 외적 및 내적개혁을 중심으로

국민연금제도에 내재된 젠더 차이 변화 연구: 제도의 외적 및 내적개혁을 중심으로

Demographic and economic aspects of the pension system in Poland — a dynamic modelling approach

Demographic and economic aspects of the pension system in Poland —a dynamic modelling approachThe paper considers a hypothesis that some dynamic features of the Polish national and public pension system follow typical mental, generic and archetypal models, as a result of many demographic, macroeconomic, political and also global factors, particularly closed-loop feedback relations with delays and amplifi cations. There are some important messages in the paper for social insurance policies design, structures and management, the meaning of data mining and collection, and for model refi nement with modelling approaches in a systems’ thinking way. The shortcomings of national social insurance systems in dealing more eff ectively with upstream social insurance risk prevention in the population are systemic and include also a postulate to empower members of the population in order to involve them in their own, entrepreneurial downstream care. The paper contains a system dynamics SD point of view, as a method of macroscopic, continuous simulation modelling, to surface and explain some cycles and discrepancies between demography, policies, as well as the system’s aspects of the national pension system. The conceptual, formal and simulation model presented in the paper, followed by some experiments’ results, applies the SD method approach with causal loop diagrams CLD and stock-and-fl ow diagrams SFD, displaying delays, amplifi cations and structure cycle dynamics in the national pension system. Further research should concentrate on the detailed analysis of additional modelling requirements in order to conduct more profound multi-factor experiments to forecast and evaluate contemporary national politics, and to test some new concepts in social insurance.

ОРГАНІЗАЦІЙНІ ПРОБЛЕМИ ФУНКЦІОНУВАННЯ НАКОПИЧУВАЛЬНИХ ТА РОЗПОДІЛЬЧОЇ ПЕНСІЙНИХ ПІДСИСТЕМ В УКРАЇНІ

Despite the number of reforms, the issue of improving the pension system in Ukraine remains quite acute. The low replacement rate and the marked increase in public pension expenditures, caused by the sharp increase in the budget deficit of the pension fund of Ukraine, show that the national pension system is one of the least efficient pension systems in the world. The article considers the structure of pension systems of developed countries, which in their absolute majority are combined. The mixed type of pension system is the most effective in terms of financial stability and the level of paid pensions. In its pure form, cumulative and distribution models are not common in world practice. The indicator of the coefficient of replacement of pension subsystems of OECD countries is presented and conclusions are drawn about their efficiency. The basic models of management of accumulative pension funds are summarized. Based on the analyzed data, it is obvious that in most leading countries of the world the basis of pension provision is the distribution subsystem. With rare exceptions, the bulk of the substitution factor is created within distribution systems. Accumulation systems can also play a significant role. Comparing data on replacement rates in Ukraine with the countries of OECD, it is clear that by 2019 the situation in Ukraine is one of the worst. The ratio of the average pension to the average salary in Ukraine is 2 times lower than the average for the OECD countries. Analysis of world practice leads to the conclusion that to increase the level of pensions requires simultaneous strengthening of the distribution and development of the accumulative parts of the pension system. The analysis of functioning of each subsystem of pension provision in Ukraine is carried out. The problems of functioning of the distribution pension subsystem in Ukraine during the last years are described. The dynamics of the budget deficit of the Pension Fund of Ukraine is graphically presented. The reasons for refusing to introduce the compulsory pension subsystem have been identified. The results of the activity of the voluntary accumulative pension subsystem are analyzed. The directions of im-provement of functioning of the pension system of Ukraine are defined.

사회적 합의를 위한 지속가능한 국민연금 개혁방향

사회적 합의를 위한 지속가능한 국민연금 개혁방향

PENSION PROVISION OF RURAL POPULATION IN THE CONDITIONS OF GLOBALIZATION OF THE MARKET

Introduction. The study is devoted to determining the level of pension provision of rural population in Ukraine. Today, the problem of effective retirement provision is the most acute in our country. After all, the solution to this problem is connected with the important task - ensuring social protection of the population. Methods. Various economic methods, special economic literature, and the scientific works of domestic and foreign scientists related to social protection of the population and pension insurance are used in carrying out the research. The information base is the relevant regulatory documents governing the functioning of the national pension system, as well as the Internet sites of the Main Directorate of the Pension Fund of Ukraine, State Statistics Service and the Verkhovna Rada of Ukraine. Results. The current state of the functioning of the national pension system has been assessed and the level of pension coverage for Ukrainian pensioners has been determined. Particular attention is paid to the state of pension provision of pensioners in rural areas; the dynamics of changes in their number over the study period is analysed. The tendencies of growth of wages and pension payments of the rural population are determined; the factors influencing them are analysed. The analysis of the replacement rate showed the relationship between the average pension and the average salary in the country for the study period; features that influenced the value of this indicator in the agrarian sector are noted. Discussions. Given the level of pension provision for Ukrainian pensioners, there is a need for pension reform. The size of pension payments is much lower compared to most European countries and does not meet generally accepted international standards. A particularly low level of pension payments is observed among the rural population. It has been for many years lower than the national average. In this regard, the issue of pension provision for the rural population requires additional study. The necessity of simultaneous use of all three levels of the domestic pension system, the importance of the use of funded pension programs for the population is substantiated.

National Pension System (NPS)

NPS is a Government approved voluntary defined contribution pension scheme. Due to its tax saving features, it is going to become one of the best tax saving instrument after PPF (Public Provident Fund). One who is not covered mandatorily under NPS scheme, and in liquidity crunch then he may invest in NPS if he is coming under tax bracket of 20% or 30% for saving tax of Rs. 10400/- or Rs. 15600/- (as the case may be).

Coming in at a Trickle: The Optimal Frequency of Public Benefit Payments

The question of how governments should choose the frequency of payments has received little attention in the literature on the optimal design of public benefits programs. We propose a simple model in which the government chooses the length of the interval between payments, subject to a tradeoff between the administrative cost of providing more frequent benefits and the welfare gain from reducing deviations from full consumption smoothing. In our empirical application, we examine consumer and retailer responses to bimonthly payments from the Japanese National Pension System. We exploit variation in the duration of payment cycles using a unique retail dataset that links consumers to their purchase history. Our difference-in-differences style approach shows a clear spike in spending on payment dates for customers who are of retirement age relative to those who are not. While within-store average prices increase by 1.6% on payday, this effect is almost entirely due to consumers substituting towards higher quality goods rather than a retailer response. We use these reduced form estimates to parameterize the model and conclude that the optimal frequency of Japanese public pension payments is less than one month, implying the government could improve welfare by increasing payment frequency.

A Study on Improvement of National Pension System—Mainly on Divided Pension—

A Study on Improvement of National Pension System—Mainly on Divided Pension—

Пенсионная система в современной России: реформа за реформой…

<p class="_1Vvodka">В последние годы в России был принят ряд законов, существенно изменивших институциональную структуру национальной пенсионной системы (акционирование пенсионных фондов, создание системы гарантирования пенсионных накоплений, замораживание накопительных пенсий). Кроме того, в конце 2018 г. вступил в силу весьма спорный закон о повышении пенсионного возраста, а в настоящее время Банком России и Минфином РФ подготовлен законопроект о создании добровольной системы индивидуального пенсионного капитала.</p><p class="_1Vvodka">На основе сопоставления ключевых демографических и пенсионных показателей в России и странах Организации экономического сотрудничества и развития (ОЭСР) автор делает вывод, что для недавнего повышения пенсионного возраста в России (для мужчин, в особенности) не было веских оснований. Подвергнуты сомнению утверждения сторонников этого законопроекта о чрезмерных трансфертах федерального бюджета системе обязательного пенсионного страхования. Исходя из предшествующего опыта в пенсионной сфере РФ, предпринята попытка оценить, насколько принятые законы поддержат рост сбережений населения в добровольных пенсионных схемах. Показано, в частности, что в ближайшие годы проектируемая система индивидуального пенсионного капитала лишь частично сможет заменить пенсионные накопления на рынке длинных денег.</p><p class="_1Vvodka">--------</p><p class="_1Vvodka">* Статья подготовлена по плану НИР ИЭОПП СО РАН, проект XI.170. 1.1. «Инновационные и экологические аспекты структурной трансформации российской экономики в условиях новой геополитической реальности», № АААА-А17-117022250127-8.</p>

DEVELOPMENT OF NATIONAL PENSION SYSTEMS IN UKRAINE AND POLAND

population and employers in terms of financing retirement age. Therefore, there was a need to reform the national pension systems in accordance with modern requirements of society and the need for social protection of retirement age citizens. The paper is dedicated to compare peculiarities of the formation and development of the national pension systems of Ukraine and Poland. Also the possibility of using the experience of both countries in the further implementation of the pension reform was discussed.

The Impact of Fiscal Conservatism ; A Case Study of the 2007 National Pension System Reform in Korea

This research intends to identify the influential factors in the 2007 National Pension System (NPS) reform in Korea (the Republic of Korea) which drove the NPS toward a structural transformation. This research also examines the applicability of the theory of Clemens and Cook (1999) to the Korean policy shift, who argue that the innate driving force of a policy, an internal contradiction, can be a critical source of structural policy change. A literature review based case study was carried out in this research. The findings are as follows. Firstly, rising fiscal conservatism was the main determinant of the 2007 NPS structural reform. The processes and conditions of the reform documented were: the fiscal conservatism embedded in NPS generated serious policy problems and led to an accumulation of the internal contradictions within NPS by raising the question on its fundamental policy goal. As time passed without any self-correction mechanism with respect to the problematic policy, the NPS lost credibility in the eyes of the public and also lost policy legitimacy. At the same time, there was a competing policy alternative to the NPS. This was the universalistic tax-based Basic Old-Age Pension System. This has been a challenge to NPSin that it had been designed based on the social insurance financing principle. The pre-conditions for the structural NPS reform were fully complete and they could be exploited by self-interested political parties in the following policy-making stages. Secondly, the theoretical assumption that the internal contradiction of a policy can be a decisive power for structural transformation, as suggested by Clemens and Cook (1999) among others, was proven to be theoretically and practically accurate in the Korean public pension reform case.

The Role of Working Women in Investment Decision Making in the Family in India

The contribution of Indian women in family, businesses and society is today being recognized. The role of women in the family decisions is also increasing with the change in demographics as more women are now participating in economic activities. With the change in education, employment and contribution in the earnings of the family, her say in the family decisions are increasing. When it comes to the investment decisions, women tend to be risk averse, have conservative attitude, lower levels of financial knowledge, lack of confidence and dependent on guidance from others as suggested by different researches worldwide. The role of husband becomes particularly important for women while choosing investment products or taking investment decisions. This article attempts to highlight the role of women in investment decision making in the family and further examines the role of a male spouse on the investment decisions. The objectives of the study were to examine the behavior of working women while taking investment decisions; and to identify the extent to which the investment decisions of the working women are influenced by the spouse/husband. The article further highlights that, when it comes to investment decisions, both husband and wife share responsibility for making investment decisions. There are investment products like Bank deposits, 5 year tax saving FDs, precious metals, public provident fund, national pension system, post office saving schemes, mutual funds, life insurance, and commodities, where the influence of women is stronger than their male spouse. The influence of a male spouse is stronger in products like real estate, company deposits, debentures or bonds, pension schemes, equity shares and derivatives.