Old-age Pension System Research Articles

International Regulation of Pensions in the EAEU: Problems and Development Prospects

The EAEU countries, having adopted the Agreement on Pension Security in 2019, took a big step forward to form the pension rights of migrants from the EAEU countries. However, existing difficulties caused by economic, demographic characteristics and institutional differences make us think about further steps to harmonize, unify and coordinate the pension systems of the EAEU countries.Aim. Consider themechanisms and the principles of international regulation of pensions in the EAEU countries and identify limitations and opportunities for its further improvement.Tasks. Explore global experience of cooperation in the pension sector; conduct an analysis of international regulation of pensions in the post-Soviet space and in the EAEU countries; identify difficulties in forming pension rights for migrants from EAEU countries; to find possible directions for the further development of pension legislation in the EAEU countries.Methods. The comparative analysis method was used to study national old-age pension systems; when determining the directions for the development of old-age pensions for migrants in the world, the historical and legal method was used.Results. The world experience of international regulation of pensions is considered.Differences were discovered in the formation of pension rights in the EAEU countries.The mechanisms of harmonization and coordination, as well as the territorial and proportional principles of legal regulation of old-age pensions are analyzed. The difficulties of forming pension rights for migrants from the EAEU countries are shown.Conclusions. The current approach to regulating pensions in the EAEU is not perfect, but it allows countries to remain independent in their national pension policies. Overcoming the existing difficulties in the formation and implementation of pension rights is possible with further harmonization, unification and coordination of the EAEU pension systems, which are complicated by the economic and demographic operating conditions and the lack of a unified strategy for the development of pensions in the EAEU. A fundamental issue for all countries is to determine the role of the state in the pension process.

Social Justice and the Old-Age Pension System in the Slovak Republic

The aim of the contribution is to examine how eligible voters in the 2020 parliamentary election perceive social justice in relation to the old-age pension system in the Slovak Republic. The sub-objective is to analyse possible significant differences in the perception of social justice among eligible voters in the 2020 parliamentary election in relation to the old-age pension system in terms of their political orientation. 701 respondents (349 women and 352 men) responded to questions asking about their political orientation as eligible voters in the parliamentary election in Slovakia in 2020 and the degree of perceived social justice in relation to the old-age pension system of the Slovak Republic. The results showed the fair distribution of deposits and returns is important for the respondents’ perception of social justice in relation to the old-age pension system of the Slovak Republic. The analyses showed that respondents with different political orientations had different opinions on the extent to which the calculation of the old-age pension should depend on the amount of income.

Health status, life expectancy and early claiming of pension

Prior to 2011, individual life expectancy played no role in the Norwegian old-age pension system. However, after the 2011 reform, life expectancy became a central factor for early pension take-up. Asymmetric information is crucial in most insurance markets, including the new pension system, where employees can flexible claim a public pension from the age of 62. Individuals who expect to live longer than the average for their birth cohort can maximize their pension wealth by deferring pension claiming, while those with a shorter life expectancy should draw their pension as early as possible. This raises concerns that adverse selection may pose a risk to the sustainability of the new pension system. To investigate this issue, we use chronic disease as a proxy for life expectancy and examine its relationship with employment and pension decisions. Our findings show that individuals with a chronic health condition are more likely to draw a pension and continue working when they reach 62 years of age compared to those without a chronic health condition. This suggests potential adverse selection issues in the pension system, although our results suggest small effects after adjusting for unobservables.

Social expenditure composition and inequality: A dynamic panel threshold analysis for OECD countries

This paper studies the relationship between inequality and public social spending for an overall sample of 28 OECD countries spanning 1997 to 2017. We add to the literature by dissecting social expenditure according to nine programs and allowing for the existence of a non-linear relation in the context of a dynamic panel threshold model. The analysis reveals a positive contribution of old-age pensions to the Gini index of disposable income distribution, the most often used indicator of inequality, supporting the need to rethink old-age pension systems in this group of countries. The results for the other social expenditure components vary with the inequality measure used and country groups under analysis, highlighting the problems that may be associated with panel data even when a set of countries with many characteristics in common is used. Our results also stress the relevance of accommodating nonlinearities when explaining inequality, paving the way to a better understanding of its behaviour.

Old-age Pension Provision in the EAEU Countries

The development of integration within the framework of the Eurasian Economic Union actualizes the issue of regulation of pension relations. The adoption of the Agreement on Pension Provision laid the foundations for international cooperation in the field of pension provision. However, significant institutional differences in national pension systems may hinder the effective implementation of oldage pension provision.Aim. To investigate the possibilities and difficulties of international cooperation in the pension sphere in the context of national differences in old-age pension provision in the countries of the Eurasian Economic Union.Tasks. To consider the national pension systems in terms of old-age pensions in the countries of the Eurasian Economic Union and conduct their comparative analysis; to show the features of international regulation of old-age pensions in the countries of the Eurasian Economic Union.Methods. In this work, the method of statistical data analysis was used to identify the features of the national old–age pension provision, comparative analysis — when comparing national pension systems in terms of old-age pensions, as well as the method of expert assessments when identifying difficulties of international cooperation in the pension sector.Results. Institutional features of old-age pension systems in the countries of the Eurasian Economic Union have been found. The grounds for international regulation of old-age pensions are revealed. Difficulties in the formation of pension rights of citizens of the Union countries have been found.Conclusions. The countries of the Eurasian Union faced similar economic and demographic challenges. Pension reforms have resulted in the design of pension systems with national institutional differences, which can become causes of social injustice and pension inequality.

Social protection for older persons: an adequacy – comparative perspective

Introduction: This paper presents the social security institutions used by older persons in selected countries from the perspective of the well-being of the elderly. The authors consider social security institutions for older persons to be old-age pension systems and long-term care systems and, to a limited extent, benefits under the health care system, which, although targeted not only at older persons, in many cases have become the starting point for the development of long-term care institutions.Purpose: The aim of this study is to draw attention to the need of a holistic approach in the protection of older persons and the need for further analysis from the perspective of their well-being. The main assumption is that to obtain the protection picture for older persons it is necessary to assess not simply old age pensions but also other benefit systems.Materials and methods: Description of the social security institutions for older persons with the aim to assess the extent of the social protection they provide. In these assessments the authors employ quantitative data as well as the opinions of national and international experts. This methodology draws on a case study approach.Results: (1) Older persons with decreasing pension amounts will face difficulties in the financing or co-financing of their long-term care costs. The health care for older persons often overlaps with long term care. There are requests for the co-ordination of these two institutions, but in practice this is not easy to achieve. Financial incentives as well as institutional traditions play a role in this respect.(2) Countries that have introduced long-term care systems and are facing rising costs are undertaking many studies on the effectiveness or efficiency of their operations. Some countries have introduced long-term care within the context of population ageing, such as in Korea; unlike in Germany, where the system targets all dependent people. (3) The early application of generous solutions (for example in Sweden or Germany) may foster claimant attitudes and hamper the reduction of pension systems. In Eastern countries, such as Korea, on the other hand, poverty levels are very high because older persons were simply not prepared to be left unsupported.

Improving economic security for older persons by public pension schemes: evidence from National Transfer Accounts for India.

This paper develops a framework for analysis of distribution related policy issues (i.e. inequality, poverty and inequity) for ensuring economic security for India's older persons by the public old-age pension systems with special reference to Indira Gandhi National Old Age Pension Scheme (IGNOAPS). The analysis is focused on (a) measurement of age-specific and intra-generational inequity by Lifecycle Deficit in the framework of National Transfer Accounts (NTA), (b) relationship between this inequity and poverty and inequalities in distribution of income and consumption and (c) role of current public funded IGNOAPS to improving economic security or reducing inequity for the elderly generation. The entire analysis is based on the benchmark year 2004-05 and a comparative analysis between 2004-05 and 2011-12. Main results show (a) remarkable age and intra-generational patterns for the older persons in labour income, consumption, income and consumption inequalities, consumption poverty and inequality-adjusted inequity and (b) efficacy of poverty-linked universal IGNOAPS to improve economic security or reducing the inequity for the older persons at a national cost of less than 0.20% of total revenueor consumption expenditure of Government of India. These results offer empirical evidence for design and implementation of redistributive policies for the older persons by integrating the objectives of reduction in economic inequalities, poverty and inequity. Such policies have wider implications for attainment of select UN-SDG goals, especially goals related to age-specific reduction in poverty and inequalities. The approach, results and implications of this paper are of general relevance for other developing countries in Asia and Africa if their economic policies aim at improving economic security of the older person in the framework of NTA methodology.

Особенности пенсионного обеспечения по старости в современных социалистических странах

This article provides an overview of old-age pension systems in contemporary socialist countries, namely China, North Korea, the Republic of Cuba, Vietnam, and Lao PDR. The aim of this study is to identify and analyze the distinctive characteristics of these systems. Through an examination of academic literature on pension organization and financing, as well as data from the World Bank, OECD, ILO, ASEAN, and statistical departments (USSR, China), the study analyzes the old age pension systems of each country, identifying commonalities and unique features. The study identifies elements aligned with global practices, socialist characteristics, and national peculiarities. Initially, all of the given countries adopted distribution-based pension arrangements that are prevalent worldwide. However, as the systems evolved, distinguishing features emerged, such as pension income inequality and privileges for specific population segments. Moreover, the study explores country-specific features influenced by the national economic context. The impact of the informal sector and illicit income on old-age pensions is uncovered, alongside the significant role of family support. Possible future scenarios for the development of old-age pensions in these countries are proposed.

Individual Pension Products Offered by Banks in Poland - a Multidimensional Comparative Analysis

Abstract The supplementary old-age pension system in Poland consists of group and individual plans. This research covers the latter, namely the individual retirement accounts and individual retirement security accounts that were introduced in 2004 and 2012 respectively. The main aim of the paper is to conduct a multidimensional comparative analysis of bank retirement products including the linguistic complexity of documents creating the retirement contracts offered to individuals by banks, and the costliness and profitability of such products in the period 2012-2019. Moreover, it identifies the dependencies between the linguistic and economic traits of retirement contracts offered by banks. The correlation analysis conducted using the Spearman’s rank correlation coefficient showed that the more readable a document of a bank contract is, the higher the interest rate is and the higher the cancellation fees. The results of the study are relevant for both financial institutions and public bodies as they show the key characteristics that may influence the demand for individual retirement products in Poland and may serve as either a stimulator or a barrier in the development of supplementary old-age pension provision.

Principles of Construction and Mathematical Models of the Formation of a Solidarity Fund in an Alternative Old-Age Pension System

The basic principles of the formation of a solidary fund in the suggested old-age pension system are to establish the minimum length of service according to which a citizen has the right to an old-age pension, the implementation into the pension calculation system of the indicator "share deducted to a solidary fund" from each transfer to the personal account of the employee, so that by retirement at the age of 60 and working experience of 38 years, the pension amount was exactly equal to the amount of wages used in calculations. With a decrease in the length of service, the pension amount is reduced according to a certain rule. To implement these principles, appropriate mathematical models have been built that allow to calculate the amount of accumulated pension capital, own pension, accumulated amounts in the solidary fund, the total amount in the pension fund, etc., with any work experience, the amount of wages. Complex calculations were performed using the parameters that have developed in the practice of today. The results of the calculations are presented in tables with the corresponding comments.

Inadequacies of regulations on supplementary pension plans in Central and Eastern European countries

The supplementary occupational and individual pension systems in Central and Eastern European countries (CEE) are poorly regulated while their architecture is very complex. Law on supplementary pensions focuses on ensuring financial security of financial institutions, their liquidity and solvency, as well as on stimulating the development of additional pension protection understood as higher coverage and assets under management. The efficiency guarantees and cost limits have not been implemented and the profitability of such products for individual savers is rarely assessed. The analyses conducted on the regulation of voluntary old-age pension systems in Bulgaria, Estonia, Latvia, Lithuania, Poland, Slovakia and The Czech Republic indicated the main inadequacies of the supplementary old-age provision offered. They relate to the lack of preliminary and regular product assessment, inadequacy of plan design, efficiency and costliness. The recommended changes relate to risk sharing, forms of pension benefits, limits on costs, information policy and transparency.

Do cognitively stimulating activities affect the association between retirement timing and cognitive functioning in old age?

AbstractIn response to the rising financial pressure on old-age pension systems in industrialised economies, many European countries plan to increase the eligibility age for retirement pensions. We used data from Sweden to examine whether (and if so, how) retirement after age 65 – the eligibility age for basic pension – compared to retiring earlier affects older adults’ (between ages 70 and 85) cognitive functioning. Using a propensity score matching (PSM) approach, we addressed the selection bias potentially introduced by non-random selection into either early or late retirement. We also examined average and heterogeneous treatment effects (HTEs). HTEs were evaluated for different levels of cognitive stimulation from occupational activities before retirement and from leisure activities after retirement. We drew from a rich longitudinal data-set linking two nationally representative Swedish surveys with a register data-set and found that, on average, individuals who retire after age 65 do not have a higher level of cognitive functioning than those who retire earlier. Similarly, we did not observe HTEs from occupational activities. With respect to leisure activities, we found no systematic effects on cognitive functioning among those working beyond age 65. We conclude that, in general, retirement age does not seem to affect cognitive functioning in old age. Yet, the rising retirement age may put substantial pressure on individuals who suffer from poor health at the end of their occupational career, potentially exacerbating social- and health-related inequalities among older people.

Populism and Social Policy: A Challenge to Neoliberalism, or a Complement to It?

Do populists pursue distinct kinds of policies, and if so, how successful are those policies? Populist rhetoric often invokes themes of redistribution insofar as leaders claim that power and resources need to be restored to “the people.” As a result, populists tend to offer a very broad view of social policy that emphasizes security, order, rewards, and punishments. Populists’ narratives may be simple, but once in office, they may face complex problems that call for more sophisticated policy solutions. This study examines whether populist policies fit the messages they deliver to their target voters, and aims to contribute to the development of a methodology for determining that relationship in specific empirical cases. I focus on the case of Russia, which enacted a major change in its old‐age pension system in 2018 under the leadership of President Vladimir Putin.

An Analysis on Social Security in Brazil Based on Maranhão

This study begins with the question: can the new change in the old-age pension system improve the economic-financial performance of the National Institute of Social Security in Brazil? The hypothesis is that the proposed constitutional amendment (PEC) 287/16, which is being presented at the Chamber of Deputies known as the pension reform, including an attempt to change the minimum age for men and women, will not solve the problem of economic crisis and financial expenses of the National Institute of Social Security of Brazil, due to the fact that the greatest impact may be other expenses not identified in this study that revolve around the benefits of retirement. The general objective is to analyze the economic and financial situation of social security in Brazil based on the regional accounting records located in Imperatriz and São Luís do Maranhão between 2008 and 2017. The methodology was defined as descriptive, explanatory and average, such as bibliofigurey, documentary and field. One of the results regarding the increase in the retirement age shows that there is no relation between the income increase indicators when compared to the surplus (profit) or deficit (loss) between 2008 and 2017 in the Social Security of Maranhão.

Adequacy Analysis of the Basic Old-Age Pension System Based on Local Administrative Data in China

There is no consensus on the judgment of the adequacy status of the old-age pension benefit in China at present. Therefore, clarification of various types of indicators and benchmarks of pension adequacy is urgently needed. According to the theoretical development of pension adequacy, this paper offers a comprehensive analysis of the benefit level of basic pension from the perspectives of poverty alleviation, income substitution, and financial sustainability. The calculation results based on local administrative data show that the current pension benefit in urban China is unbalanced: on the one hand, the average pension level of self and flexible employees cannot keep track of the local average consumption level or even the relative poverty standard in particular years and the individual replacement rates for a few nonstandard employees are less than the minimum standard of 40% set by the International Labor Organization, which means the pension benefit performs poorly in terms of consumption smoothing. On the other hand, the lifelong pension rights are much higher than the lifelong contribution obligations for new retirees. Under the trend of population ageing, the extremely high benefit–cost ratio means that the current retired generation is eroding the welfare of the current working generations, and the long-term financial sustainability of the pension system is facing challenges. In the future, in order to improve the benefit level of the basic old-age pension system in a sustainable way, we need to increase the average and individual replacement rates and reduce the benefit–cost ratio by consolidating contribution bases and delaying the number of contribution years.

Regulating the Transition From Work to Retirement: Towards a New Distribution of Responsibilities Between the State, Social Partners and Companies?

Germany has experienced a fundamental shift in the architecture of the old-age pension system since the turn of the century. While research has focused on the reduction of benefit levels, scholars have paid less attention to the changing framework for the transition into retirement. Lawmakers abolished options for early or flexible retirement in the public system, shifting responsibility for this issue to collective and company agreements. This paper investigates how different actors addressed their new responsibilities for shaping workers’ transition from employment to retirement. It relies on an empirical study with a mixed methods research design, including a representative quantitative company survey, a qualitative analysis of different industries, company case studies, and analyses of collective agreements. We observe significant variation between industries and companies that have developed life-course-oriented options for their employees and others that have hardly taken up the issue. Consequently, the new architecture of old age security has led to new inequalities between workers of different industries and even within companies. The article contributes to our understanding of the political dynamics accompanying demographic and economic change across Europe and beyond by demonstrating the role of institutions and coordination mechanisms in producing variegated forms of citizenship. Keywords: old-age pension system, transition from work to retirement, flexible retirement, collective agreements, occupational pensions, multi-level-governance, inequality.

The Efficiency of a Supplementary Old-Age Pension System – the Case of Polish Voluntary Pension Funds

Abstract The aim of this article is to evaluate the effectiveness of voluntary pension savings plans in Poland, based on the principles of operation and rates of return of voluntary pension funds (pol. Dobrowolne Fundusze Emerytalne, DFE). The selection of those funds from a whole range of solutions available in the 3rd pension pillar is due to the fact that only this type of voluntary pension saving plan provides complete and transparent information about the actual investment policy, the composition of pension investment portfolios, and the achieved rates of return. In order to evaluate the investment policies and the effectiveness of DFEs, the following research methods were used: a literature analysis, an analysis of financial data, and basic methods of investment efficiency assessment. The results of the evaluation lead to the conclusion that despite their adoption of similar investment strategies, the DFEs have achieved very different values of effectiveness. In the years 2013-2018, selected funds achieved higher than average rates of return, while others achieved returns that were no better than the interest rates of standard bank deposits.

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.

Data governance in der wissenschaftlichen Literatur: Eine Begriffsklärung anhand einer Text-Mining-basierten Literaturrecherche

The proposed universal basic pension (Grundrente) is intended to acknowledge the contribution to society made by indigent pensioners during their working lives. However, a higher pension without a means test would in four cases out of five mean misdirecting aid to those not in need. Even in cases where the current statutory pension entitlement is lower than the entitlement to basic provision (Grundsicherung), as part of a combined household income the pension still usually succeeds in averting old age poverty. It would therefore make more sense to deduct a personal allowance from the means test, irrespective of the type of income involved. An allowance of up to 200 euros per month would benefit almost all those originally identified as potentially needing assistance if they simultaneously claimed basic provision. However, this would involve the needy being treated differently depending on their individual income in old age. Alternatively, to avoid this unequal treatment, the standard rates of old-age basic provision could be raised for all indigent pensioners. While it would raise the number of potential beneficiaries, this should be interpreted less as an alarm signal than as an indication of an effective old-age pension system. To increase acceptance of income support as part of Germany's social security architecture, the means test needs to be designed to appear less humiliating.

Niespójność systemu emerytalnego i systemu rentowego w Polsce

Celem artykułu jest przeanalizowanie problemu niespójności systemu rentowego i emerytalnego w Polsce pod względem wysokości otrzymywanych świadczeń. Artykuł składa się z czterech części. W pierwszej scharakteryzowano system rentowy, koncentrując się na sposobie ustalania wysokości świadczeń. Następnie przedstawiono ewolucję systemu emerytalnego, zwracając uwagę na zmiany wynikające z reformy wprowadzonej w 1999 roku. W trzeciej części przeprowadzono dwie symulacje kształtowania się relacji świadczenia rentowego do wynagrodzenia, uwzględniając zarobki oraz staż pracy ubezpieczonego. Otrzymane wyniki porównano ze stopami zastąpienia osiąganymi w systemie emerytalnym. Podkreślono fakt, że zasady ustalania wysokości świadczeń w systemie rentowym są znacznie korzystniejsze. W ostatniej części przedstawiono propozycje zmian systemowych prowadzące do zwiększenia spójności obu systemów i zredukowania relatywnych różnic w wysokości otrzymywanych świadczeń.