Pension Guarantee Research Articles

Fairness of Differentiation of Pension Provision for Medical Workers (Based on Judicial Practice)

The article is devoted to the manifestation of differentiation in social security law. It is concluded that it is necessary to more clearly define the criteria for this differentiation in order to justify and equitably redistribute benefits, taking into account the characteristics of specific population groups. Based on an analysis of judicial practice, the most typical cases of refusal of early pension provision due to the failure to include certain periods of work in the special insurance (“medical”) period of service have been identified. The example of early pension provision for medical workers shows some inconsistency in the legal regulation of the provision of this pension guarantee. It is proposed to determine and formulate the goal of early retirement provision for medical workers; to amend the Labor Code of the Russian Federation in order to clarify the consequences of establishing part-time work for the purposes of early pension provision.

Loan Operation in the Issues of Revisions of “Reliability of Capitals and Cashiers” of Mining Associations of State-Owned Mining Plants (second half of the 19th – early 20th centuries)

This article discusses some fragmentary known aspects of the history of mining partnerships – the first domestic institution created in addition to state pension guarantees for retired "free rural residents" of state-owned mining plants in the Caucasus, the Urals, Karelia and Eastern Siberia.
 When writing the article, materials from two Russian archives and, mainly, pre-revolutionary author's publications in the Mining Journal, the official publication of the Mining Scientific Committee, were used.
 The problematic characteristics of loan transactions are analyzed by the content of the identified facts of "neglect" and "damages" investigated during inspections of the activities of the Kusinsky, Zlatoust and Satka partnerships in 1881, 1877–1884 and 1911–1913, respectively. The indicators of financial and material "sustainability" of the system of partnerships as new formations of the post-reform era are given.
 For citation: Orlov P.A. Loan Operation in the Issues of Revisions of “Reliability of Capitals and Cashiers” of Mining Associations of State-Owned Mining Plants (second half of the 19th – early 20th centuries). From History and Culture of Peoples of the Middle Volga Region. 2023, vol.13, no.3, pp.46–59. https://doi.org/10.22378/2410-0765.2023-13-3.46-59 (In Russian)

Safeguarding livelihoods against reductions in economic output

Secular stagnation, escalating socio-ecological crises, and the urgent need to scale back resource use in affluent countries make reductions in economic output increasingly likely. In this context, the prevailing vulnerability of livelihoods to a reduction in output poses a fundamental threat, and obstructs stringent environmental policies that reduce production or consumption.This study explores what creates this vulnerability, and how it might be overcome. We introduce a novel analytic framework that describes the relationship between economic output and the adequacy of livelihoods. Using empirical data for the years around the Global Financial Crisis, we illustrate the vulnerability of livelihoods in the UK. Based on our framework, we show that the vulnerability is not inevitable but arises when livelihoods are dependent on wage labour whilst employment and adequate incomes for workers are insecure, or when adequate pensions are insecure. These conditions are pervasive in contemporary capitalist economies, primarily due to profit maximisation and neoliberal welfare and labour policy. Profit maximisation may in fact actively foster the vulnerability of livelihoods, as the vulnerability can be used as a lever for squeezing wages, and as a pretext for pursuing economic growth and blocking environmental policies.Finally, we identify a range of interventions that could overcome the vulnerability, including specific versions of universal basic services, a universal basic income, a minimum income guarantee, a job guarantee, living wages, worktime reduction, and a pension guarantee, alongside changes in capital-labour relations and a shift to not-for-profit provisioning. Such interventions could secure livelihoods in volatile or contracting economies, and make stringent environmental policies socially sustainable and more politically palatable.

Manfaat Berkala dalam Program Jaminan Pensiun BPJS Ketenagakerjaan sebagai Pengganti Pendapatan Utama di Masa Pensiun bagi Peserta dan atau Ahli Waris

Jaminan Pensiun BPJS Ketenagakerjaan adalah salah satu program jaminan sosial bagi para pekerja yang bertujuan untuk menjamin seluruh pekerja agar dapat memenuhi standar hidup yang layak dan menjamin kemandirian apabila terjadi risiko sosial. Penelitian ini bertujuan untuk menggali lebih mendalam terkait manfaat berkala yang diterima apakah dapat menggantikan pendapatan utama khususnya ketika peserta sudah tidak mampu bekerja atau dalam masa pensiun. Hasil dari penelitian ini membuktikan bahwa manfaat berkala dari jaminan pensiun yang diterima oleh peserta maupun ahli waris tidak sepenuhnya dapat menggantikan pendapatan utama, namun melalui keikutsertaan pada program Jaminan Pensiun, peserta atau ahli waris merasa terbantu dalam pemenuhan kebutuhan sehari-hari.

Reforming Teacher Pension Plans: The Case of Kansas, the First Teacher Cash Balance Plan

Abstract The ongoing crisis in teacher pension funding has led states to consider various reforms in plan design to replace the traditional benefit formulas, based on years of service and final average salary (FAS). One such design is a cash balance (CB) plan, long deployed in the private sector, and increasingly considered, but rarely yet adopted, for teachers. Such plans are structured with individual 401(k)-type retirement accounts, but with guaranteed returns. In this paper I examine how the nation's first CB plan for teachers, in Kansas, has played out for system costs, and the level and distribution of individual benefits, compared with the FAS plan it replaced. My key findings are: (1) employer-funded benefits were modestly reduced, despite the surface appearance of more generous employer contribution matches; (2) more importantly, the cost of the pension guarantee, which is off-the-books under standard actuarial accounting, was reduced quite substantially. In addition, benefits are more equitably distributed between short-term teachers and career teachers than under the back-loaded structure of benefits characteristic of FAS plans. The key to the plan's cost reduction is that the guaranteed return approximates a low-risk market return, considerably lower than the assumed return on risky assets.

PENERAPAN DATA MINING PENGELOMPOKAN JAMINAN HARI TUA (JHT) BERDASARKAN WILAYAH DALAM MASA PANDEMI (STUDI KASUS : BPJS KETENAGAKERJAAN CABANG LANGKAT)

During the COVID-19 pandemic, many companies experienced a decline or went bankrupt, so they had to reduce the number of workers and even close the company. BPJS Ketenagakerjaan is a public legal entity that is responsible to the president and functions to administer four programs, namely Work Accident Insurance (JKK), Death Insurance (JKM), Old Age Security (JHT), with the addition of the Pension Guarantee program (JP). One of them is the submission of claims from too many participants of the Old Age Security program from various regions, especially the Langkat sub-district, so that it becomes a big problem to provide good service or information for the participants. For this reason, the author tries to create a system to support a computerized grouping process that can help automatically classify JHT claims by region, so there is an opportunity to design a grouping data mining system in it. Data mining is a process of mining data in very large amounts of data using statistical, mathematical methods, to utilizing the latest artificial intelligence technology. Clustering is a method that is applied in creating a grouping data mining system to make it easier for employees to group JHT by region. Based on the analysis that has been done in the grouping of old-age insurance data using the clustering method, it is necessary to do the cluster process several times to get the same results according to the process that was first carried out, namely in cluster 1 : 2 3 2 cluster 2 : 2 8 2, cluster 3 : 2 13 2 with 545 data in cluster 1, 308 data in cluster 2 and 421 data in cluster 3.

Studying the equilibrium of pension designs when shifting to funded pension schemes: economic theory and links to political factors.

In this paper, we explain the evolution of pension systems due to political pressure. Such pressure has led to pension reversals in recent years in many of the countries of Central East Europe (CEE) and Latin America. We base our theory on exchange options and finance positions. We show that during the transition to a funded pension scheme, high earners benefit from the change, while the low earners' position worsens. This type of unstable position will eventually lead to pension reversals. We suggest the minimum pension guarantee as a mechanism to create a financial equilibrium to stabilize the pension market. Based on the option characteristics, we analyse the boundaries of that equilibrium. We find that high-income inequality and poverty foster the convergence to a mixed pension scheme or the implementation of a minimum pension guarantee. In the second part of this paper, we show how the minimum pension guarantee has accounted for a major part of the pension designs across OECD countries. Funded schemes that did not implement an unfunded mechanism were reversed to put more weight on unfunded pillars.Supplementary InformationThe online version contains supplementary material available at 10.1007/s43546-022-00236-z.

Pengembangan Diri Mahasiswa Institut Shanti Bhuana Dalam Berwirausaha

The purpose of this study is to analyze data on student self-development which can develop and help them to train mental resilience so that they can develop into better individuals. Because like it or not, they must be trained to have the character of fighters and leaders. Entrepreneurship means opening a personal business which can later be transferred to other people. If one day they are tired of running a business, the business they have pioneered for years can be passed on to those closest to them, for example to their children or spouse. It is different if they work for other people. The benefits they get from the company are only in the form of pension guarantees. Of course, there is nothing they can pass on to their offspring, and this is also to start a business from scratch is not easy. It takes a character who is resilient and doesn't give up. Entrepreneurship helps they train mental toughness. them, and they can also develop into better individuals. Because like it or not they must be trained to have warrior and leader characters, and there is no term i hate my job, it is impossible for someone to start a personal business in a field that they do not like. choosing his own line of business makes him love his job. This freedom to choose is not owned by office workers, therefore, they often feel compelled to carry out their work.

Implementation Of Data Mining Grouping Of Old Age Guarantee (Jht) Based On Region In Pandemic Period

During the COVID-19 pandemic, many companies experienced a decline or went bankrupt, so they had to reduce the number of workers and even close the company. BPJS Ketenagakerjaan is a public legal entity that is responsible to the president and functions to administer four programs, namely Work Accident Insurance (JKK), Death Insurance (JKM), Old Age Security (JHT), with the addition of the Pension Guarantee program ( JP). One of them is the submission of claims from too many participants of the Old Age Security program from various regions, especially the Langkat sub-district, so that it becomes a big problem to provide good service or information for the participants. For this reason, the author tries to create a system to support a computerized grouping process that can help automatically classify JHT claims by region, so there is an opportunity to design a grouping data mining system in it. Data mining is a process of mining data in very large amounts of data using statistical, mathematical methods, to utilize the latest artificial intelligence technology. Clustering is a method that is applied in creating a grouping data mining system to make it easier for employees to group JHT by region. Based on the analysis that has been done in the grouping of old-age insurance data using the clustering method, it is necessary to do the cluster process several times to get the same results according to the process that was first carried out, namely in cluster 1 : 2 3 2 cluster 2 : 2 8 2, cluster 3: 2 13 2 with 545 data in cluster 1, 308 data in cluster 2 and 421 data in cluster 3.

Vague Pension Future: Empirical Evidence from the Israeli Radical Privatized Market

We examine the future benefits of the Israeli privatized pension system, which is considered as a model of transition to funded pension systems worldwide. This research is based on an extensive database obtained from one of the largest traditional private funds in the market. The results paint a concerning picture regarding the adequacy of benefits and quality of life in old age. Israel’s radical privatized pension model signals a warning to other nations. We show that, even with high returns, most individuals cannot handle the magnitude of financial and labor risks accumulated during their career and retirement. We recommend more balanced government intervention as well as the use of risk-sharing mechanisms such as providing minimum pension guarantee and strengthening the unfunded social security pillar.

Political Stress and the Sustainability of Funded Pension Schemes: Introduction of a Financial Theory

This study introduces multiplayer game in the modern pension market. Particularly, this study claims that low earners and high earners have different interests when playing in funded pension market scheme. This differentiating is enabled by avoiding the entire society as a single earning cohort. This study using financial position, demonstrates a socio-economic anomaly in the funded pension system, which is in favor of high-earning cohorts at the expense of low-earning cohorts. This anomaly is realized by a lack of insurance and exposure to financial and systemic risks. Furthermore, the anomaly could lead to a pension re-reform back to an unfunded scheme system, due mostly to political pressure. This study found that a minimum pension guarantee is a rebalance mechanism for this anomaly, which increases the probability of a sustainable pension scheme. Nowadays when countries try to balance between social expenses and awaking financial markets, one may find this theory highly relevant. It is obviously one of the cases where social targets meat financial equilibrium and here they are in the same side. Specifically, it is argued that implementing the guarantee with an intra-generational, risk-sharing mechanism is the most efficient way to reduce the effect of this abnormality.

Sustainability of funded pension schemes: A financial position perspective using options

This study offers in-depth knowledge of the socio-economic characteristics of funded pension projects. It is based on the financial position of pension market actors during the transition of the pension system to a more funded capitalized scheme, mainly through the option benefit model. This is possible due to the fact that the economy is not viewed as a single earning cohort. The study analytically demonstrates a socio-economic anomaly in the funded pension system, which is in favor of high-earning cohorts at the expense of low-earning cohorts. This anomaly is realized due to lack of insurance and exposure to financial and systemic risks. Furthermore, the anomaly might lead to the pension re-reform back to an unfunded scheme, mainly due to political pressure. A minimum pension guarantee was found to be a rebalance mechanism to this anomaly, which increases the probability of a sustainable pension scheme. Specifically, it is argued that implementing a guarantee with an intra-generational, risk-sharing mechanism is the most effective way to reduce the impact of this abnormality. Moreover, the paper shows the convergence process toward implementing a minimum pension guarantee in many countries that have capitalized their pension systems during the last three decades, in particular in Latin America and Central and Eastern Europe.

Hedge inflation risk of specific purpose guarantee funds

AbstractSpecific purpose guarantee funds (SPGFs) such as pension guarantee funds are popular among investors with both specific investment purpose and guaranteed return requirement but receive little academic attention. We propose a practical purpose‐oriented constant proportion portfolio insurance (PO‐CPPI) strategy that optimally allocates its assets into a risk‐free fund (floor) and a purpose‐related portfolio (cushion) to maximize prospect theory investors' utility with consideration of their purpose‐related inflation risk. Our closed‐form solution of optimal PO‐CPPI allocation derived in the continuous time case and Monte‐Carlo simulations in the discrete‐time and dynamic cases prove the superiority of PO‐CPPI over general portfolio insurance strategies.

The Expectation for Pension Insurance in Funded Schemes: Theoretical Model and Global Implementation

In this study, we derive the financial position of pension actors in the market during pension system transition toward more funded capitalized scheme, mainly via an option benefit model. This is enabled by not considering the economy as a single earning cohort. We analytically demonstrate a socio-economic anomaly in funded pension system, which is in favor of high earning cohorts on the expense of low earning cohorts. This anomaly is realized by lack of insurance and exposure to financial and systemic risks. Furthermore, the anomaly might lead to pension re-reform back to unfunded scheme, mostly due to political pressure. We find that minimum pension guarantee is a rebalance mechanism to this anomaly, which increases the probability to sustainable pension scheme. Specifically, we argue that implementing the guarantee with an intra-generational, risk-sharing mechanism is the most efficient way to reduce the effect of this abnormality. Moreover, we exhibit the convergence process toward implementing minimum pension guarantee in many countries, which have capitalized their pension systems during the last three decades, particularly among Latin America and Central East Europe (CEE) countries. Received: 11 December 2020 / Accepted: 5 August 2021 / Published: 5 September 2021

Pension Provision for Judges in the Russian Empire

Introduction. Pension provision is one of the institutions which ensure the implementation of the principle of independence and impartiality of judges. The reform of the modern judicial institutions should take into account the accumulated historical experience of creating and developing both state and non-state pension mechanisms. The analysis of the genesis of pension legal relations in autocratic Russia allows us to understand the essence and purpose of modern institutions of post-service provision for judges, as well as to obtain a scientific basis for the ongoing transformations of the pension system as a whole. Theoretical Basis. Methods. The purpose of the research is to identify patterns and factors of creation and development of pension institutions for judicial employees in autocratic Russia. To achieve this goal, the following tasks were investigated: an analysis of the causes of the emergence and transformation of state pension institutions for Russian judges in the period from the XVII to the beginning of the XX centuries, the study of the system of emerital pensions of the Ministry of Justice of the Russian Empire, other non-state methods of pension provision, and the determination of functional characteristics of pensions of judicial employees in the specified period. In the course of the research a dialectical method of scientific knowledge was used, from the standpoint of which the reforms of the pension system and related legal norms were considered comprehensively, in development, interrelation and interaction with other phenomena of social and political life. General scientific (analysis, synthesis, deduction, induction, analogy, system- structural, functional, etc.) and specific scientific (formal-legal, comparative law, philological) methods were based on the dialectical method. Results. As a result of the research, the following conclusions were made: the pension system as a form of post-service provision for judges gradually replaced the system of feedings and estates as the rewards for service. Starting with one-time appointments of pensions personally by the monarch, the pension system gradually began to cover all civil servants. At the same time, seniority pensions in the autocracy could be received not only by judges, but also by other employees of the court apparatus. Additional pension guarantees for judicial employees appeared after the creation of the emerital Fund of the Ministry of Justice of the Russian Empire, as well as The Committee for the Charity of Honoured Civil Servants. Pensions in autocratic Russia had a broad function, including stimulating long-term honest service and preventing corrupt behavior. Discussion and Conclusion. State pension provision in Russia has always been an important element in the system of other legal incentives attracting the most talented lawyers to work in the courts. Of all forms of material security for judges, pension provision is the most conducive to conscientious public service of a judge as it is a kind of reward, a goal which can only be achieved through a long period of faithful service.

Funded-capitalized pension designs and the demand for minimum pension guarantee

Using funded and unfunded pillars, the optimal pension structure is estimated using an over-lapping generation model, calibrated to the average OECD countries. While simulating different pillar sizes, a socio-economic characteristic was revealed in which low-earning groups are prone to unexpected market risks than high-earning cohorts and support a larger contribution than better-off individuals. This led to high contribution rates for funded pillars and low contributions rates for social security pillars. This suboptimal allocation leads to inefficient hedging capability for the pension portfolio. An alternative is a minimum pension guarantee as an efficient system stabilizer as it rebalances the economic cost among different earning cohorts. However, the guarantee might be expensive to implement if not capitalized early in the working phases in an era of aging populations, low birth rates, and deep financial crisis.

The Expectation for Risk-Sharing Cycle: Theoretical Model and Global Implementation

In this paper, we offer an explanation to pension systems cyclical reforms, based on Central East Europe (CEE) countries experience over the last three decades. We claim that in the transition to funded pension design, the government not only transfers longevity and fiscal risks to the individualbut also absorbs risks transferred from the public, where each market actor transfers undiversifiable risks to the other. This hidden risk path that has not been discussed yet in the literature, stemmed from the public expectation to risk premium or adequate old age benefits that evolves to political pressure. The outcomes of this risk path realized in financial transfers, such as social security, means-tested and minimum pension guarantee. Consequently, funded pension designs naturally converge to a new landscape paradigm of risk sharing, including intergenerational and intra-generational play. Financial crises such as the recent COVID-19 pandemic foster the convergence process.

Pension Reforms and Risk Sharing Cycle: A Theory and Global Experience

Purpose: This paper offers an explanation to pension systems cyclical reforms, based on Central East Europe (CEE) countries experience over the last three decades. Design/Methodology/Approach: This paper develops a theory of risk sharing process and demonstrate it based on global experience over the last two decades. Finding: During the transition to funded pension design, the government not only transfers longevity and fiscal risks to the individual but also absorbs risks transferred from the public, where each market actor transfers undiversifiable risks to the other. The outcomes of this risk path realized in financial transfers, such as social security, means-tested and minimum pension guarantee. Consequently, funded pension designs naturally converge to a new landscape paradigm of risk sharing, including intergenerational and intra-generational play. Financial crises such as the recent COVID-19 pandemic foster the convergence process. Practical Implications Governments and central planners have to consider risk sharing mechanisms to ensure sustainability of pension designs during the transitions to funded schemes. Originality/Value: To the best of the author’s knowledge, no other paper attempted to study the bi-path ways of risk during the pension transition and discover the mutual expectation of the pension market actors. There is a vast literature of risk sharing study in comparison between funded and unfunded pension schemes.

The transition to a multi-pillar pension system: the inherent socio-economic anomaly

PurposeThis paper aims to analytically show that in an over-lapping-generation (OLG) model, low earning cohorts bear unwanted risk and absorb higher economic cost than high earning cohorts do.Design/methodology/approachThis paper aims to consider the individual's risk appetite, using a simple utility function, based on consumptions and discount rates in each period. This paper calibrates the model according to teh Israeli pension system as a representative of a small open developed organization for economic cooperation and development country. Israel is considered as unique case study in the pension landscape, as it implements almost pure defined contribution pension scheme with continuous trend of pension market capitalization (Giorno and Jacques, 2016). Hence, this study finds Israel suitable for examining the theoretical mix of pension scheme. That model enables exploring combined solutions for adequate old age benefits, involving the first and the second pension pillars, under fiscal constraints.FindingsIt comes out that for risk-averse individuals, the optimal degree of funding is negatively correlated to asset returns' volatility and positively correlated to earning decile level. The neglect of risk and individual's current earning level will thus overstate the contribution level and funded percentage from total contributions. Moreover, even in an economy with minimum government intervention, and highly developed private pension fund with high average of rate of return, the authors find it is optimal that the pension system contains a sizeable unfunded pillar. This paper innovates by revealing a socio-economic anomaly in design of mix pension systems in favor of high earning cohorts on the expense of economic loss of low earning cohorts.Practical implicationsThe model presented in this paper could be implemented in countries with mix pension systems, as an alternative to public social transfers or means tested, alleviating poverty and inequality in old age. Additionally, this model could raise the public awareness of the financial sustainability of the unfunded pay-as-you-go pillar to diversify financial risk in pension systems, especially for low earning cohort in society.Social implicationsOne area of research that is particularly relevant in this context concerns the issue of alleviating poverty and income inequality. It is often stressed that the prevention of old age poverty is among the central targets of well-designed pension system (Holzmann and Hinz, 2005). The conceptualization of minimum pension guarantee used in this composition allows to clearly capturing the notion of such a poverty and social targets as an integral part of the pension system rolls.Originality/valueThis paper innovates by revealing a socio-economic anomaly in design of mix pension systems in favor of high earning cohorts on the expense of economic loss of low earning cohorts. That comes to realize through the level of total contribution rates and funded share that are generally optimal for high earning cohorts but not for low earning cohorts. This paper identifies that the effect of anomaly is most significant in a market characterized with high income-inequality level. This paper finds that imposing intra-generational risk sharing instrument in the form of minimum pension guarantee can re-balance pension design among different earning cohorts. This solution demonstrates balancing effect on the entire economy.

The Binary Path of Risks in Pension Systems and Political Pressure

In this paper, we offer an explanation for cyclical reforms to pension systems, based on the experience of countries in Central and Eastern Europe (CEE) over the last three decades. We conclude that in making the transition to funded pension design, governments not only transfer longevity and fiscal risks to the individual but also absorb risks transferred from the public, with each market actor transferring undiversifiable risks to the other. This pathway of hidden risks, which has not previously been discussed in the literature, stems from a public expectation that citizens will enjoy risk premiums and adequate old-age benefits, an expectation that evolves into political pressure. The outcomes of this risk path are realized in financial transfers, such as means-tested social security and minimum pension guarantees. Consequently, funded pension designs converge naturally into a new landscape paradigm of risk-sharing, with intergenerational and intragenerational components. Financial crises such as the one accompanying the recent COVID-19 pandemic foster the convergence process.