Pension Payments Research Articles

기초연금 재원부담 비율 조정에 관한 연구

Currently, the state and local governments share the financial resources required for basic pension payments. The state bears 40% to 90% of the resources necessary in consideration of the ratio of the elderly population and the financial status of local governments. Concerns have been raised that the quality of welfare services provided by local governments with poor economic conditions could decline overall as the financial burden of local governments increases due to the recent aging population. Accordingly, it is necessary to increase the proportion of the state burden required for basic pension payments from the current one. The ratio needs to be raised to a full amount of more than 80%. This refers to strengthening the responsibility for the state's basic pension payment and reducing local governments' financial burden with poor economic conditions.
 This study proposed new ways to finance the existing basic pension, insisted on strengthening the state's financial burden proportion compared to the current one, and examined ways to reduce the burden on local governments with poor economic conditions. Raising the state burden ratio for basic pension payments is expected to have a positive effect. It can ease the burden on local finances for basic pension payments and promote the soundness of local finances.
 The adjustment of the financial burden of the basic pension is positive in that it presents a new perspective on the financial resources of the basic pension and is significant in that it can reduce the burden on local governments as well as look at reasonable ways to become a more robust basic pension system by expanding the financial resources of the basic pension.

Peculiarities of pension provision of scientific workers: realities of today

The problems of pension provision in Ukraine today are one of the most acute issues, primarily due to its low level, the imperfection of the current legal regulation, the existence of various social and demographic problems in the state. It is noted that today the domestic pension system is financially unstable, does not provide the size of pensions in accordance with the labor contribution of the majority of citizens and at the same time creates conditions for preferential (mostly unfair) pension provision for a significant number of pensioners. The issue of the prosperity and quality of life of pensioners is becoming more and more urgent, because their financial condition is significantly lower than in European countries. Therefore, it is proposed to include the restoration of justice in the determination of pension payments – both today and in the future – among the important and priority tasks of the state. Because if a person has worked honestly all his life, he should be guaranteed a decent pension. The purpose of the article is to consider the features of pension provision for scientific workers in today’s conditions, on the basis of which to draw appropriate conclusions. It is noted that the legal regulation of the pension provision of scientific workers is imperfect, does not sufficiently ensure the prestige of scientific work and does not stimulate the systematic renewal of scientific personnel. Attention was drawn to the expediency of mandatory annual indexation of pensions, including the pensions of scientists, and the introduction of a fair mechanism for calculating their payments.Since the provision of economic, social and legal guarantees for employees, in particular the employees of the scientific sphere - scientists, as well as the creation of conditions for conducting effective scientific research, will increase the prestige of engaging in scientific activity. One of the ways to achieve the result and implement the functions assigned to the state should be to improve the legislative framework for the regulation of social security relations, as well as social protection and pension provision of scientific workers.It is noted that the implementation of state policy in this area is possible based on the improvement of legal regulation and adaptation of pension provision to international standards.

Caught in a Matrix of Factors: A Pilot Study of Female Retirees Receiving Below-Minimum Pension Payments

Pension systems based on an insurance model were originally designed for male breadwinners who worked under permanent contracts without career breaks. Since their inception, women’s participation in the workforce has increased significantly, but on average, their employment career paths are still shorter and less linear compared to those that men enjoy. Demographic changes have prompted many countries to reform their pension systems to ensure long-term financial sustainability. And to varying degrees, such reforms also have looked to address the issue of short careers. In Poland, reforms introduced in 1999 brought about significant changes to the rules governing pension entitlement. That led to the emergence of a new category of retirees—those who had contributed to the pension system for a short period and consequently received very low pensions. This article provides an overview of an exploratory qualitative pilot study conducted in 2018 with nine women who were in receipt of benefits from the Polish universal pension system, which amounted to less than the so-called ‘lowest retirement pension’ being granted at that time. The analysis makes recourse to the concept of employment career and its connection to retirement to identify various life-course determinants that contributed to their situation. These factors include childhood and adolescent adversities that affected educational attainment; domestic and caregiving responsibilities coupled with cultural expectations and insufficient institutional support; the labor market situation, and the inability to document certain employment periods. The research material indicates that a significant portion of the work performed by the interviewees throughout their lives did not translate into a pension benefit, as it either involved unpaid domestic and caregiving duties; or work performed without formal contracts.

Rural pensions, intra-household bargaining, and elderly medical expenditure in China.

China's rural elderly spend less on medical expenditures as they age despite declining health, raising welfare concerns. This paper investigates the role of intrahousehold bargaining power on health expenditures of the elderly by evaluating the impact of cash transfers from a new social pension program. The program provided windfall payments to those above age 60, making it possible to employ a regression discontinuity design based on age of eligibility to estimate causal effects. Using data from the 2011 and 2013 waves of the China Health and Retirement Longitudinal Study, we find that receiving pension payments increases both the utilization of outpatient care and outpatient expenditures by the elderly who experienced illness. This result is robust to controlling for total household expenditures per capita, ruling out income effects as the main channel. Consistent with pensions increasing elderly bargaining power, we find that pensions significantly increase medical expenditures only for those elderly who co-reside with children or grandchildren but have no effect on those who live independently.

Ставки бюджетоутворюючих податків в Україні: чи доцільне радикальне зниження?

In the context of Russian Federation's full-scale war against Ukraine, the idea of conducting a radical tax reform in our country, which would provide for the establishment of corporate income tax, personal income tax and VAT rates at the same level of 10%, has become widespread, and later transformed into the idea of an "anti-corruption" tax reform. According to the reform’s supporters, lowering the rates of the main taxes will ensure the de-shadowing of the economy, destroy the grounds for corruption, and on this basis will lead to an increase in tax revenues, if not in the first year of the reform, then at least in the short term. Optimistic forecasts regarding the fiscal consequences of a radical reduction in the rates of main taxes in Ukraine are based on simplified ideas about the impact of the size of tax rates on the scale of the shadow economy and tax revenues. The purpose of the article is to refute these ideas by revealing, using the results of theoretical and empirical studies, the ambiguous nature of the relationship between tax rates and the size of the shadow economy and tax revenues. A comparative analysis of the rates of VAT, personal income tax, corporative income tax and social security contributions in Ukraine and the EU countries has been carried out, which allows to establish that none of the EU countries has ever introduced low rates for all major taxes and social security contributions, reduced the VAT rate to the level of minimum EU requirements (15%), or refused to finance pension payments through social security contributions, distributing their burden between employers and employees. The author analyzes the impact of tax rates, tax burden and other factors on the level of the shadow economy and establishes why lower tax rates do not guarantee a reduction in the scale of informal activities. The absence of a direct link between the size of tax rates and corruption is substantiated. Based on the analysis of the arithmetic and economic effects of tax rate cuts, the author determines their ambiguous impact on tax revenues. A comparative analysis has been made of the fiscal efficiency of the taxes whose rates are proposed to be reduced and of the compensating taxes, and the impossibility of compensating budget losses by increasing these taxes is substantiated. The author concludes about the high fiscal risks of a radical reduction in the rates of budget-forming taxes in general and the impossibility of such a reduction during the war.

Is Tax Income Pertinent to Government Contributions to Pensions and Gratuities Empirical Verdict from CoIntegration

This study examines the impact of tax income on government contributions to pension and gratuities in Nigeria. Data were mainly sourced from the bulletin of Nigeria Central Bank from 1981 to 2021. The sourced and gathered data were scrutinized thoroughly with VECM, regression, and selected lag package as well as the Co-integration (JFTC) test, Normality test, and test of stability. It was discovered that tax impacted pension and gratuities positively. Also, oil revenue enhances the prompt payment of pensions and gratuities in Nigeria. The income from the federation account and Federal retained income also impacted pension and gratuities positively, statistically, and insignificantly. Government expenditure has been discovered to have a positive influence on pensions and gratuities. Conclusively, taxation income has a positive significant, statistical, and economic influence on government contribution to Pensions and gratuities in Nigeria both in the short and long run. It is recommended that once the pension and the gratuity are the lasting hope of the retirees to readjust themselves properly after retiring from employment, the government should remit a certain percentage from tax income monthly and regularly in proportion to retirees' numbers so that the payment of pensions and gratuities will not be delayed when the needs arise. Keywords: Tax income, government contributions, pensions and gratuities, oil revenue; federation account JEL Classification: H200; H550; H270.

Long COVID: Costs for the German economy and health care and pension system

BackgroundPatients with acute COVID-19 can develop persistent symptoms (long/post COVID-19 syndrome). This study aimed to project the economic, health care, and pension costs due to long/post-COVID-19 syndrome with new onset in Germany in 2021.MethodsUsing secondary data, economic costs were calculated based on wage rates and the loss of gross value-added. Pension payments were determined based on the incidence, duration, and amount of disability pensions. Health care expenditure was calculated based on rehabilitation expenses.ResultsThe analysis estimated a production loss of 3.4 billion euros. The gross value-added loss was calculated to be 5.7 billion euros. The estimated financial burden on the health care and pension systems due to SARS-CoV-2 infection was approximately 1.7 billion euros. Approximately 0.4 percent of employees are projected to be wholly or partially withdrawn from the labor market in the medium term due to long/post-COVID with new onset in 2021.ConclusionCosts of long/post-COVID-19 syndrome with new onset in 2021 are not negligible for the German economy and health care and pension systems but may still be manageable.

The Strategy for Managing Financial Resources of the Pension System of the OECD Countries and Ukraine

"The article considers the special conditions for the implementation of the strategy for managing the financial resources of the pension system of the OECD countries and Ukraine. A strategic financial and economic mechanism has been developed to assess the quality of financial resources management of the country’s pension system through partial socio-economic and demographic indicators of the economic system. The method of managing the formation, distribution and use of financial resources of the state pension system is determined. The block diagram of the strategic financial and economic mechanism for the management of financial resources of the pension system within the economic and demographic indicators, as well as the parameters of state economic policy is presented. The real value of the replacement ratio per 1% of GDP and the efficiency ratio of the financial resources management of the pension system in the OECD countries and Ukraine are analyzed. The structure of investment portfolios of OECD pension funds is presented. The forecast trend of the demographic burden coefficient and the share of state funding of the pension system to GDP in the OECD countries and Ukraine are determined. The forecast trend of budget revenue and average wages is calculated. As part of the distributive approach to financing pension payments, an old-age pension payment method has been introduced, taking into account the socially acceptable level of income compensation, insurance premium rate, and demographic structure of the population, real wages and changes in social security payers."

Impact of a pension program on healthcare utilization among older farmers: Empirical evidence from health claims data

In many countries, family-owned farms are predominant, with self-employed farmers. When such farmers reach retirement age, they likely do not have access to pensions. Using the farmer pension program in Taiwan as an example, this study examines the effect of access to public pension on healthcare utilization among older farmers. We investigate whether this program affects healthcare utilization, number of visits, and the costs associated with outpatient or inpatient services and prescription drugs. We also explore whether these effects vary by medical specialty and the amount of pension received. By using health claims data from the universal health insurance program and a regression discontinuity design, we find that pension payments significantly increase the number of outpatient visits by 4% and outpatient expenditure by 5%. We also find that pension recipients spend more on family medicine, internal medicine, and Chinese medicine. As the pension program is designed to secure older farmers’ welfare, our results demonstrate an improvement in the health component of individual well-being.

The impact of retirement on body mass index in China: An empirical study based on regression discontinuity design

An aging population is an important trend of social development, and it will be China's basic national condition for a long time. However, the pressure on domestic pension payments and economic operations will increase daily. The delayed retirement policy is gradually implemented as a critical initiative to improve capital and labor force allocation. The impact of retirement on residents' Body Mass Index (BMI) and weight has become a focus issue. This paper investigates the mechanism of the impact of retirement on residents' BMI using microdata from the China Family Panel Studies (CFPS) 2018, combined with a fuzzy regression discontinuity design to measure the potential health impact of China's current retirement policy on residents. The study finds that: (1) Retirement has a significant negative effect on BMI for women, with retirement leading to a significantly increased risk of deviation from normal BMI levels and significantly increasing the weight of retired women. However, retirement does not have a significant effect on men. (2) Retirement policies affect residents' BMI to different degrees depending on their family size, with the negative effect on women being more pronounced in smaller family sizes. (3) Female residents who retire to help their children with intergenerational care are more likely to maintain normal BMI levels, significantly positively affecting their potential health. (4) Retirement negatively affects BMI through channels such as significantly reducing exercise frequency among female residents. The study demonstrates that retirement policy impacts the BMI and weight of female residents, so the formulation and implementation of delayed retirement policy should be flexible, and family factors such as family sizes and intergenerational care should be considered appropriately.

Traditional and new methods of pension authentication in China: Reasons, methods and problems

The article discusses the topic of the digitalization of the pension systems in the People’s Republic of China, the spread of the new social authentication methods and the new pension payment confirmation system in the country. The population ageing problem is forcing the government of the People’s Republic of China to develop new methods of social support for the retired citizens. The article deals with the problems of pension payment confirmation for the Chinese, who are currently abroad, as well as the methods of solving the issue. Special attention is paid to the problem of pension authentication through overseas Chinese multifunctional centers (MFC). The article studies the main positive and negative aspects of “traditional” and “new” methods of pension authentication.

Investing in the Prevention of Communicable Disease Outbreaks: Fiscal Health Modelling-The Tool of Choice for Assessing Public Finance Sustainability.

National strategies for preparedness for future outbreaks of COVID-19 often include timely preparedness with vaccines. Fiscal health modelling (FHM) has recently been brought forward as an additional analysis by defining the public economic impact from a governmental perspective. As governments are the main decision-makers concerning pandemic preparedness, this study aimed to develop an FHM framework for infectious diseases in the Netherlands. Based on the Dutch COVID-19 outbreak of 2020 and 2021 and publicly available data on tax income and gross domestic product (GDP), the fiscal impact of COVID-19 was assessed using two approaches. Approach I: Prospective modelling of future fiscal impact based on publicly available laboratory-confirmed COVID-19 cases; and Approach II: Retrospective assessment of the extrapolated tax and benefit income and GDP. Approach I estimated the consequences that can be causally linked to the population counts reducing income taxes by EUR 266 million. The total fiscal loss amounted to EUR 164 million over 2 years (excluding pension payments averted). The total losses in terms of tax income (2020 and 2021) and GDP (2020) (Approach II), were estimated at, respectively, EUR 13.58 billion and EUR 96.3 billion. This study analysed different aspects of a communicable disease outbreak and its influence on government public accounts. The choice of the two presented approaches depends on the perspective of the analysis, the time horizon of the analysis and the availability of data.

THEORETICAL ASPECTS OF INTERNATIONAL LABOR MIGRATION AGAINST THE BACKGROUND OF EXTERNAL SHOCKS

The article examines the theoretical problems of reforming pension systems, taking into account the experience of developed countries. Attention is focused on the problems of population aging and increasing demographic burden on the working population. The variety of approaches to the formation of the pension insurance system is analyzed. The relevance of the inclusion of indicators of the theoretical percentage of replacement of labor income by pension and the aggregate percentage of replacement for the modeling of the three-level pension system is emphasized. The problem of pension provision for citizens is particularly relevant for Ukraine, which has been experiencing a steady depopulation of the population for the past 30 years. Under such circumstances, it is very relevant to study theoretical justifications and statistical measurements, generalize the experience of developed countries, take into account the variety of approaches and develop national priorities and directions for reforming the pension system of Ukraine. Demographic changes present pension systems with complex issues of ensuring the fairness and adequacy of pension payments, the sustainability of the systems themselves, and achieving intergenerational equality. The degree of implementation of the function of smoothing citizens' incomes after the termination of employment by various pension systems is partially characterized by the indicator of the theoretical percentage of replacement of labor income by pension (TRR). The replacement rate shows the estimated amount of the hypothetical pension of an employee with an average salary during the first year after the appointment of a pension compared to the earnings before retirement in the base case (with a 40-year career and retirement at the official retirement age). Another possible indicator of the level of pension provision — the aggregated replacement rate (ARR) — shows the ratio of the median income of persons of the retirement age group to the median income from work of the population of the pre-retirement decade. The trends of increasing the retirement age and the introduction of various savings programs to increase personal interest in pension insurance are characteristic not only of countries with a high, but also with an average and below-average level of economic development. Keywords: population aging, demographic burden, pension systems, theoretical percentage of labor income by pension replacement, aggregated percentage of replacement.

Demographic Component of National Security

The change in the values of modern society has changed the emphasis in the definition of the main factors characterizing national security. The aging of the population, increasing costs of medicine and pension payments, increasing economic burden on the working-age population give reasons to consider the demographic component as the main one in the system of national security. The article deals with the problem of determining those demographic factors that have the greatest impact on national security. The aim of the study is to quantify the influence of individual demographic factors on the national security indices. It compares the main demographic indicators of the Russian Federation and developed countries; uses data for developed countries to determine the boundary values of the main demographic indicators; constructs regression dependencies that determine the dynamics of demographic indicators for the Russian Federation; determines the generalized index of the demographic component of national security of the Russian Federation; calculates elasticity coefficients to determine the impact of individual demographic indicators; develops recommendations to improve the demographic composition of the Russian Federation. It has been established that previously unrecorded parameters of demographic security indicators (the share of the elderly population in the total population and the demographic burden of the elderly) are important in the assessment of national security. For the Russian Federation, all indicators are in the critical zone (below the minimum threshold value).

분할연금 지급에 따른 연금소득 과세 개선 방안

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 Novel Black-Litterman Model with Time-Varying Covariance for Optimal Asset Allocation of Pension Funds

The allocation of pension funds has important theoretical value and practical significance, which improves the level of pension investment income, achieves the maintenance and appreciation of pension funds, and resolves the pension payment risk caused by population aging. The asset allocation of pension funds is a long-term asset allocation problem. Thus, the long-term risk and return of the assets need to be estimated. The covariance matrix is usually adopted to measure the risk of the assets, while calculating the long-term covariance matrix is extremely difficult. Direct calculations suffer from the insufficiency of historical data, and indirect calculations accumulate short-term covariance, which suffers from the dynamic changes of the covariance matrix. Since the returns of main assets are highly autocorrelated, the covariance matrix of main asset returns is time-varying with dramatic dynamic changes, and the errors of indirect calculation cannot be ignored. In this paper, we propose a novel Black–Litterman model with time-varying covariance (TVC-BL) for the optimal asset allocation of pension funds to address the time-varying nature of asset returns and risks. Firstly, the return on assets (ROA) and the covariance of ROA are modeled by VARMA and GARCH, respectively. Secondly, the time-varying covariance estimation of ROA is obtained by introducing an effective transformation of the covariance matrix from short-term to long-term. Finally, the asset allocation decision of pension funds is achieved by the TVC-BL model. The results indicate that the proposed TVC-BL pension asset allocation model outperforms the traditional BL model. When the risk aversion coefficient is 1, 1.5, and 3, the Sharp ratio of pension asset allocation through the TVC-BL pension asset allocation model is 13.0%, 10.5%, and 12.8% higher than that of the traditional BL model. It helps to improve the long-term investment returns of pension funds, realize the preservation and appreciation of pension funds, and resolve the pension payment risks caused by the aging of the population.

Relationship of wealth, pension payments and health of pensioners: The case of Georgia universities

Supporting those individuals who have reached retirement age is essential for any country, although academic staff deserves special attention. Professors face significant challenges as they reach retirement age. The article aimed to empirically substantiate the relationship between well-being, pension payments, and pensioners' health using the example of universities in Georgia. Based on the survey results, which 630 university professors attended before retirement and retirement age, the factors influencing the respondents' fear of losing their jobs in retirement we identified. By applying regression models, we evaluated the effectiveness of alternatives for improving the well-being of pensioners by increasing wages and state pensions. The efficacy of these alternatives differs depending on the health status of pensioners. It has been established that the differentiation of pension amounts depending on the length of service can increase the confidence in the well-being of pensioners without increasing the pension provision.

The impact of demographic factors on national security

The article discusses the demographic factors that have the greatest impact on national security. The shift in the values of modern society has changed the emphasis in the main factors characterizing national security. The population ageing, increased health care costs and pension payments, as well as the growing economic burden on people of working age, give reasons to consider the demographic component as the main one in the system of national security. The purpose of the study is to quantify the impact of individual demographic factors on national security indexes. The authors compared the main demographic indicators of the Russian Federation and developed countries. Based on the data for developed countries the threshold values of the main demographic indicators were determined. Regression analysis to determine the dynamics of demographic indicators for the Russian Federation was applied, and a generalized index of the demographic component of national security was determined. In addition, elasticity coefficients were calculated to determine the impact of individual demographic indicators. The authors found that previously overlooked parameters of demographic security indicators, such as the share of the older citizens in the total population and the demographic burden of the elder population, are important in the national security assessment. The recommendations on improving the demographic component of Russia's national security were proposed. For the Russian Federation, all indicators are in the critical range (below the minimum threshold value).

A global analysis of the value of precision medicine in oncology - The case of non-small cell lung cancer.

Biomarker testing is indispensable for the implementation of precision medicine (PM) in oncology. The aim of this study was to assess the value of biomarker testing from a holistic perspective based on the example of advanced non-small cell lung cancer (aNSCLC). A partitioned survival model was populated with data from pivotal clinical trials of first-line treatments in aNSCLC. Three testing scenarios were considered; "no biomarker testing" encompassing chemotherapy treatment, "sequential testing" for EGFR and ALK encompassing treatment with targeted- or chemotherapy, and "multigene testing" covering EGFR, ALK, ROS1, BRAF, NTRK, MET, RET and encompassing treatment with targeted- or immuno(chemo)therapy. Analyses of health outcomes and costs were run for nine countries (Australia, Brazil, China, Germany, Japan, Poland, South Africa, Turkey, United States). A 1-year and 5-year time horizon was applied. Information on test accuracy was combined with country-specific information on epidemiology and unit costs. Compared to the no-testing scenario, survival improved and treatment-related adverse events decreased with increased testing. Five-year survival increased from 2% to 5-7% and to 13-19% with sequential testing and multigene testing, respectively. The highest survival gains were observed in East Asia due to a higher local prevalence of targetable mutations. Overall costs increased with increased testing in all countries. Although costs for testing and medicines increased, costs for treatment of adverse events and end-of-life care decreased throughout all years. Non-health care costs (sick leave and disability pension payments) decreased during the first year but increased over a 5-year horizon. The broad use of biomarker testing and PM in aNSCLC leads to more efficient treatment assignment and improves health outcomes for patients globally, in particular prolonged progression-free disease phase and overall survival. These health gains require investment in biomarker testing and medicines. While costs for testing and medicines would initially increase, cost decreases for other medical services and non-health care costs may partly offset the cost increases.

Urban Ageing Welfare Leaking and Remedy Strategies in Macau

The world is experiencing population ageing, which will extend to the future across the world. The ageing population is sure to impact a country’s welfare policy and economy. Macau is a special administrative region (SAR) of China with a long-life expectancy and a decreasing reproduction rate, making the population ageing particularly obvious. This study adopts a mixed methods approach to analyze the relationship between the ageing population, pension recipients, and pension payments to suggest the pension system and welfare leaking strategies of Macau SAR. The Granger causality test and focus group were conducted to test and discuss the ageing population, pension recipients, and pension payments. Results show that the ageing population positively affects pension payments. The ageing recipients are not corresponding to the ageing population and payments show welfare leakage. Suggestions are offered accordingly for a welfare policy to offer remedy strategies and reform the pension system.