Pension Insurance System Research Articles

Development of the Modern Pension Insurance System in China: Trends and Prospects

Development of the Modern Pension Insurance System in China: Trends and Prospects

Сучасний стан пенсійного страхування в Україні

The current state of pension insurance in Ukraine constantly requires additional research that would update its development indicators, reveal new trends in its development, justify the feasibility of its reform, and take into account the influence of various factors. The purpose of the study is that based on the assessment of the current state of the pension insurance system in Ukraine, it is necessary to identify the main problems of its development and substantiate practical recommendations on the directions of reforming the social policy of the state regarding pension provision. The compulsory state pension insurance indicators in Ukraine, conducted by the Pension Fund of Ukraine for 2018-2022, were evaluated, which revealed the main trends of development and outlined the main problems. The performance indicators dynamics of non-state pension funds in Ukraine over the past five years has been investigated, trends in the development of accumulative non-state pension insurance have been outlined. The life insurance market in Ukraine is investigated and the voluntary pension insurance indicators are analyzed separately, which provides for the achievement by the insured person of the retirement age determined by the contract. The bank deposits dynamics of households in Ukraine as the potential of additional pension provision of the population is considered. It is proposed to motivate by the state creating corporate non-state pension funds. The practice spread of concluding pension insurance contracts with insurance companies by employers would create an additional source of pension payments and reduce the financial burden on the budget of Ukraine. The existing proposals for reforming pension insurance in Ukraine will contribute to increasing the confidence of the country’s population in both state pension provision and non-state pension insurance.

Analysis of the impact of social insurance on farmers in China: A study exploring subjective perceptions of well-being and the mechanisms of common prosperity.

Exploring common prosperity in China, this study focuses on the impact of social pension insurance on the well-being of rural communities. It explores the direct beneficiaries and policy effects of the Rural Social Pension Insurance system (RSPI), which was piloted in 2009 and achieved full coverage in 2012. It summarizes the performance and implementation of social pension insurance and the development of the rural social pension system. The article uses microdata from the four most recent periods of China Family Panel Studies (CFPS), which were undertaken in 2012, 2014, 2016, and 2018, and uses the Order Probit model to analyze the effects of participating in insurance on rural residents in terms of their subjective well-being. The study identifies diverse effects on farmers from different age groups, genders, and regions, with a focus on subjective well-being. The article also tests the mediating effects of health status and self-rated social status on farmers' subjective well-being and their mechanisms of action. Findings reveal that participating in the insurance system significantly improved the subjective well-being of rural residents. Its biggest beneficiaries were groups of rural residents with poor health status, living in good overall conditions. Taking into account the most recent aims of this policy, to promote rural revitalization and common prosperity, further optimization of the rural pension insurance system should improve the living standards of low-income groups, enabling more comprehensive coverage, and potentially helping to mitigate the risk of returning to poverty due to illness. Developments in basic social security and the rural basic pension system could effectively guarantee the basic standards of living of rural residents. Future development of the system should take into account the heterogeneous characteristics of rural residents and implement social pension protection policies in accordance with local conditions.

"Embedding" and "pulling back": Spatial transformations and urban assimilation of migrant elderlies following their children.

Due to the rapid acceleration of social mobility and the shrinking size of families, China has begun to enter a new form of aging society, with an increasing number of migrant elderlies following their children. How to adapt and assimilate into the new living space profoundly affects those migrant elderlies' mental health. Drawing on the spatial framework proposed by Henry Lefebvre, this paper explores the factors affecting urban assimilation of migrant elderlies following their children in China, and puts forward corresponding strategies to promote the urban assimilation. Using semi-structured interviews and participatory observation, this study conducted a qualitative study among migrant elderlies following their children who lived in a University Community in Wuhan city, Hubei Province from May 2022 to July 2022. During the survey period, we participated in the gathering activities of the migrant elderly five times a week, and conducted semi-structured interviews with 15 migrant elderlies following their children. Firstly, this study reveals that family assimilation is the foundation of urban assimilation of migrant elderly following their children; Secondly, we could conclude that the urban life of the migrant elderlies are mostly community-based, so it is especially important for them to reconstruct close neighborhood relations and regain the humanity affection of the traditional acquaintance society. Lastly, the fundamental institutional barrier is a significant factor that influences the ability of these migrant elderlies to live a stable urban life. The Chinese government needs to promote a nationwide unified pension and health insurance system, so that the migrant elderlies can enjoy the same benefits as the local elderly residents in the "inflow" area.

Directions for improving the pension indexations mechanism in the context of Russian economy’s transformation

The purpose of this study is to analyse the current mechanism for indexing pensions of Russian pensioners and find directions for its possible development in the context of the structural transformation of the Russian economy. To achieve this goal, a statistical and coefficient analysis of pension level indicators from the Rosstat database was carried out. Based on the results obtained, it was concluded that, all other things being equal, it is not possible to fundamentally improve the level of pension provision and it is necessary to continue to carry out significant reforms of the Russian pension system. Taking into account the new realities in which Russia found itself after February 2022, authors proposed and analysed directions in which it would be possible to further reform the Russian pension system. The proposed directions were classified into four groups: 1) measures of a general economic nature, indirectly affecting the level of pension provision; 2) changing the general parameters of the existing pension system in order to optimize it; 3) the development of a non-governmental pension insurance system to solve the problem of a low replacement rate for high-income groups of pension recipients and 4) a change in the existing mechanism for indexing pensions, which involves more radical changes to fundamentally increase the level of pension provision for Russian pensioners.

Operational efficiency evaluation of urban and rural residents' basic pension insurance system by utilizing a picture fuzzy TOPSIS method based on the cumulative prospect theory.

Population aging is the most serious challenge facing the pension insurance system in China in the next few decades. Compared with the employees of civil servants and enterprises and institutions, urban and rural residents are unstable vulnerable groups with less income. In order to deal with the pension risks caused by the growing aging population and solve the security problems of urban and rural residents, our government has carried out a series of constructive works in the pension insurance system: in view of the rural and urban residents, new rural social endowment insurance system and the social endowment insurance system for urban residents have been set up and combined into a unified basic old-age insurance system for urban and rural residents in 2014. With the continuous expansion in the scale of income and expenditure of urban and rural living insurance funds and the size of the insured number, it is of great necessity to evaluate the efficiency of this system. The operational efficiency evaluation of urban and rural residents' basic pension insurance systems is viewed as multi-attribute group decision-making (MAGDM). In this paper, we propose an approach by combining the traditional Technique for Order Preference by Similarity to an Ideal Solution (TOPSIS) with cumulative prospect theory (CPT) which can be widely used with vague information. Thus, the main contribution of this study is as follows: (1) the TOPSIS method is extended by picture fuzzy sets (PFSs) with unknown weight information; (2) entropy method to obtain the original weights of attributes; (3) the picture fuzzy-CPT-TOPSIS (PF-CPT-TOPSIS) method is used to deal with the MAGDM problems under PFSs; (4) a numerical instance for operational efficiency evaluation of urban and rural residents' basic pension insurance systems is proposed to testify the effectiveness of new method; and (5) some comparative studies are provided to give effect to the rationality of PF-CPT-TOPSIS approach.

Current Situation and Suggestion of Three Pillar System of Endowment Insurance in China

Since 1991, China implemented the reform of the old age insurance system for urban enterprise employees, the work of establishing a multi-level old-age insurance system has been carried on continuously, and the three-pillar old-age insurance system is developing vigorously. By introducing the development process of China's pension insurance, this paper analyzes the construction process of the three-pillar system, and combined with the current background of China's aging population, puts forward the problems existing in the system, and gives corresponding suggestions, so as to promote the improvement and development of the three-pillar system of pension insurance, and improve China's comprehensive pension capacity.

Official tenure and governance effectiveness of China's basic pension insurance system: An inverted U-shaped curve.

ObjectivesBased on incentive theory of motivation, this paper aims to estimate China's basic pension insurance's annual efficiency and inter-period efficiency changes from 2015 to 2019 and further examine the relationship between official tenure and basic pension insurance governance performance.MethodsThe DEA—BCC model was used to evaluate the operating efficiency of basic pension insurance in 31 provinces of China. And four panel Tobit models were constructed to examine the heterogeneous linkages between officials' tenure and governance efficiency in different regions of China.ResultsThe results showed that there was an inverted U-shaped relationship between the official tenure and the governance efficiency of basic pension insurance. The younger an official was in his current position, the more apparent the inverted U-shaped relationship between the tenure of an official and the governance efficiency of basic pension insurance. We also found that localized government officials showed better governance efficiency of basic pension insurance. However, as the term of office of officials increased, the governance efficiency of non-localized officials showed a steeper negative effect.ConclusionThis study firstly reveals a significant relationship between the characteristics of officials and the operation of China's basic pension insurance system, which is a complement to the study of China's basic pension systems.

ANALYSIS OF THE DYNAMICS OF INCOME AND EXPENSES OF THE PENSION FUND OF UKRAINE

The article raises the issue of receipt and distribution of funds of the Pension Fund of Ukraine (PFU). Factors and features of the PFU deficit are revealed. The dynamics of pension expenditures as a percentage of Gross Domestic Product (GDP) is analyzed. Ways to increase revenues to the PFU and areas for improving the mechanism of redistribution of funds and optimization of the expenditure side of the budget are proposed. Examining the state of pension provision in Ukraine, it is noted that the current pension insurance system is in a difficult financial situation and does not properly perform its main task – does not provide retirees with the necessary level of income to maintain at least a minimum standard of living. The author determined that the main reasons for the growth of debt are: non-payment of obligations on the amount of Single Social Contributions (SSC) by natural persons-entrepreneurs; lack of funds to finance the current liabilities of state-owned enterprises to reimburse the actual costs of payment and delivery of preferential pensions and debt repayment. It is determined that the main priorities for solving the problem of functioning of the pension social protection system are: the need to eliminate (reduce) the deficit in the PFS budget by increasing the maximum size of the base of SRS from 15 to 25 minimum wages the amount of SSC payment from the salary of income that exceeds the maximum amount, for example, the SSC rate is reduced by 5-10% by the amount of salary that exceeds the maximum accrual base; legally establish requirements for the payment of SSC for managers of enterprises at the rate of at least three minimum wages; in the labor law to introduce a clear monetary valuation of "unit of labor", which will allow enterprises and organizations to apply the principles of wage differentiation, depending on the complexity, skills and responsibilities of work and eliminate the so-called "equalization"; create conditions for the introduction of a mandatory funded pension system; to optimize the size of labor and social pensions, making their payments from the joint pension system as a basic, at a level not less than the subsistence minimum and not more than 10 subsistence minimums, on the principle of direct dependence of pension benefits on paid insurance premiums; cancel unjustified benefits; use a simplified procedure for resolving disputes concerning the recovery of arrears of reimbursement by enterprises of the actual costs of payment and delivery of pensions granted on preferential terms under lists № 1 and № 2.

THE LATEST TRENDS IN PENSION REFORM IN UKRAINE

Abstract. In this article, the authors confi rm the need for further reform of pensions in Ukraine. The relevance of the chosen topic is that the pension system needs to be reformed, as it cannot create decent living conditions for pensioners. Despite some important changes in the further development of the pension system, its reform has not yet been completed, as the budget of the Pension Fund of Ukraine is still signifi cantly dependent on budget subsidies (35% in 2021), and most pension payments do not prevent poverty of recipients (in 2021 the average pension was 3991 UAH and the minimum wage - 6500 UAH), a signifi cant share of income is in the shadows (from 30% to 50%), which generally indicates the lack of social justice in the functioning of this system. The purpose of this article is to assess the system of compulsory state pension insurance in Ukraine and prove its inability to ensure adequate payments to pensioners, based on conclusions and recommendations to demonstrate ways to improve the national pension system, in particular through the introduction of a funded component. The authors use the following research methods: analysis (in the study of pension systems), synthesis (in generalizing research results on pension system reform), scientifi c abstraction, method of induction, deduction, generalization and comparison, systematization, methods of statistical analysis and graphical presentation of research results, methods of economic and mathematical modeling. The paper uses economic and institutional analysis, as the studied sources are primarily analytical documents, scientifi c publications and regulations. Key words: pension, pension reform, pension system, accumulative pension system.

ТЕОРЕТИКО-ПРАКТИЧНІ ЗАСАДИ ФОРМУВАННЯ ФІНАНСОВОЇ ГРАМОТНОСТІ НАСЕЛЕННЯ У СФЕРІ ПЕНСІЙНОГО СТРАХУВАННЯ

In modern conditions, there is an urgent need to form a high level of the population's financial literacy. The development of financial technologies, the digitalization of the modern world, and the widespread use of new financial services require an increase in the level of financial education among the population. The aim of our study is to highlight the importance of financial literacy for ensuring a successful pension insurance reform. The dialectical method of cognition, the method of analysis and synthesis as well as online questionnaires used for conducting research madr it possible to determine main problems in the knowledge system regarding the reform of pension insurance. Developed countries, especially those ones experiencing demographic problems, have started the massive development of the multilevel pension insurance system. Consequently, the issue of enhanced financial literacy has arisen not only in the area of personal finance management at the consumption level, but also in the area of pension savings and their investment. Ukraine has initiated a profound reform in the pension provisions field with the transition to insurance principles. Our citizens should form a clear position on the necessity to participate in the supplementary pension insurance system. According to the results of the survey, slightly more than half of the respondents show their interest in pension reform. But their level of knowledge is not sufficient to understand the basic principles of pension reform and take actions aimed at the accumulation of pension funds. This fact necessitates the formation of financial literacy at three levels. The first level is represented by secondary schools. The technical-vocational education institutions, colleges as well as universities of the second level are supposed to deepen the financial literacy which further should be continued as self-education at the third level of adulthood. Improving financial literacy in the field of pension insurance should result in a high level of cooperation with various financial institutions, including insurance companies, private pension funds, and banking institutions in the field of raising funds for future pension provisions through the skillful and systematic personal finance management.

Facilitator or enforcer, ally or enemy? Claimant’s perceptions of insurers’ roles in occupational rehabilitation

PurposeThis study aims to deepen the understanding of insurers’ role within the return-to-work (RTW) process by uncovering and categorizing the multiple roles assumed by the insurer based on the claimant’s perceptions and identifying the underlying mechanisms that explain the relationship between perceived insurer roles and occupational rehabilitation outcomes.Design/methodology/approachThe author used a qualitative approach with theory-guided content analysis to examine 24 semi-structured interviews with occupational rehabilitation claimants who had undergone occupational rehabilitation within the earnings-related pension insurance system in Finland.FindingsThe author uncovered three perceived insurer roles in relation to other stakeholders in the rehabilitation network: financier, coordinator and leader. These roles have different perceived responsibilities and influences on rehabilitation outcomes. Additionally, the author found four perceived insurer roles in relation to the claimants, which varied according to their democracy and activity levels: ally, facilitator, enforcer or enemy. Based on this study, the author recommends that insurers adopt democratic and participatory actor roles (ally and facilitator) to promote the RTW process in occupational rehabilitation.Originality/valueThis inaugural study applied role theory to insurers within the RTW process, developing a new framework of insurer profiles. This study reveals the dynamic nature of insurers and enhances the understanding of the connections between perceived insurer roles and rehabilitation outcomes.

The United Steelworkers of America's Path to Private Security: The Postwar Retiree Crisis, Politics, and Communism, 1946–1949

AbstractIn 1949 the United Steelworkers of America (USWA) successfully bargained for a pension and social insurance system, opening the door for social insurance and pension bargaining across organized labor throughout the post–World War II era. Indeed, the explosion of security bargaining after World War II facilitated the growth of America's unique but flawed public-private welfare system. Many historians have viewed labor's postwar turn to collective bargaining in a negative light and have argued that due to the weakening of labor's political power in the immediate postwar era, labor abandoned its progressive postwar vision and instead opted for a more insular, less socially oriented agenda achieved at the bargaining table. This argument still holds true, but a close inspection of the USWA's postwar work highlights a more nuanced picture. The USWA was one of the few labor unions to challenge the constitutionality of the antilabor Taft-Hartley Act (1947). The union's fight against Taft-Hartley came into conflict with the union's dire need to bring long-term security to its members, especially after many steel corporations began arbitrarily terminating steelworkers at age sixty-five in 1946. Ultimately, the issue of delivering long-term security to USWA members overshadowed the union's effort to defeat Taft-Hartley. This article focuses on the USWA's effort to bring long-term security to its members from 1946 to 1949 and looks at the postwar retiree crises in steel, the weakness of the public and private welfare systems in that era, the Inland Steel decision, the USWA's challenge to Taft-Hartley, and 1949 bargaining.

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Abstract. Introduction. With the constant growth of the deficit in the financing of pension benefits and the real threat of the state's inability to guarantee pensions, the role of the private pension system is growing. The burden on the state pension system leads to an increase in the financial burden for individuals and legal entities, due to increased contributions to the state Pension Fund, which leads to a decrease in the amount of financial resources for the development of its activities. Purpose. The purpose of the article is to analyze the activities of private pension funds in the current socio-economic development of the country.Results. The effective functioning of the national economy depends on the level of financial security of various economic entities. With the help of mobilization of their funds there is an active distribution and redistribution of financial resources between different sectors of the economy. A developed system of financial institutions is needed to develop the process of accumulation of free money. They are the ones who transfer capital from those who have savings and those who need it. Among many types of financial institutions, private pension funds deserve considerable attention. Given the practical absence of a funded system of compulsory state pension insurance, as well as the insufficient level of funding for the solidarity system, they contribute to improving the economic well-being of the population. By concluding an agreement with the NPF, each citizen can determine the amount of future additional non-state pension benefits. Thus, without the effective functioning of the third level of the pension system, the financial security of the population in old age will be minimal, which will reduce the economic development of Ukraine as a whole. Conclusions. For the effective functioning of the NPF network in Ukraine it is necessary: - ensure transparency of NPF activities and increase protection of the rights of their participants; - to establish a fund for guaranteeing pension contributions of participants, which would return part of such contributions in case of bankruptcy of the selected NPF. This would increase public confidence in these financial institutions; - to improve and modernize the regulatory framework related to NPF risk management; - take measures to improve the financial literacy of the population and increase public interest in participating in the private pension system; - reduce the taxation of payments to NPF participants when they reach retirement age; - provide tax benefits for legal entities - founders of NPFs, with a significant number of participants; - to ensure the development of the financial market in Ukraine, which will expand the range of financial instruments in which NPFs can invest.

Additional Forms of Retirement Savings under the Third Pillar of the Polish Retirement Protection System

The purpose of the article is to present the additional forms of retirement savings under the third pillar of the Polish retirement protection system as well as in the broader context of the national pension insurance system, taking into consideration legal regulations concerning pension benefits paid by the Polish Social Insurance Institution (ZUS). The author synthetically discusses various schemes operating in the third pension pillar (EPS, IRA, IRPA and ECP), and analyses the adequacy of the adopted solutions in the light of the basic aim of this system which is to complement benefits paid under the national pension system. In addition, benefits paid out to the participants to the third pillar schemes are discussed in detail in the context of the overall objective of the third pillar.

The Impact of Important Policys on the Financial Situation of China’s Public Pension Fund: A Literature Review

Mainly due to the impact of COVID-19 and the reduction of the basic pension insurance contribution rate paid by work unit to 16% in the Comprehensive Scheme for Reducing Social Insurance Contribution Rates, nearly one-third of China’s provinces’ public pension funds have experienced the phenomenon that revenue does not cover expenditure, which makes the sustainable operation of the public pension insurance system face more severe challenges. Moreover, in recent years, some policies issued by the Chinese government have some complex impacts on the sustainability of basic pension insurance. It is urgent to sort out the impacts of these significant policies on China’s public pension insurance funds, which is conducive to summarizing some useful enlightenment from the existing literatures. It can provide the reference for the government to further reform the system and improve the sustainable operation of China’s public pension insurance.

Balance and Stability of Polish Pension Insurance System

The structure of the Polish pension insurance system, despite many reforms carried out in recent years, is still mainly based on the pay-as-you-go (repartition) pillar. To make it work properly, a constant inflow of participants who will pay contributions, thanks to which it will be possible to pay benefits to current beneficiaries, is necessary. At the same time, a negative demographic trend is observed, which can be a signal that more and more people are going to be paid from the system, while fewer people are going to provide money to it. Therefore, the question arises: How much time is there left for repartition-based pension insurance system to last? Is this system really a vehicle of economic and social development or retrograde rather? This article is an attempt to answer such question using the example of the Polish pension insurance system (PIS). To answer this question, linear trend models were used in the analysis. The adjustment of these models to reality was high, and on their basis, the forecasts for the following years were estimated. The variables used in the analysis are time, number of people, and the value of contributions and withdrawals. According to the research, it can be concluded that Polish pension insurance system has about 60 years to last in such form. Demographic changes are definitely unfavorable, and the age gap is getting bigger and bigger. This means that fewer people are going to provide money for those who are inactive.

Non-State Pension Insurance as a Promising Area of Social Policy of Ukraine

The article is devoted to the study of the peculiarities of the development of the pension system in Ukraine and the characteristics of its three levels. The state and problems of functioning of the first level of the pension system (solidarity) are characterized, the forecast of its development is made taking into account demographic changes and deficit of the Pension Fund of Ukraine. An analysis of the dynamics and structure of revenues and expenditures to the budget of the Pension Fund of Ukraine for 2017-2020 and a comparison of expenditure and revenue of the budget as a whole are committed. Changes in the minimum pension in Ukraine and its inability to ensure a decent standard of living when reaching retirement age are studied, based on which the relevance of launching the second level of the pension system and the transition to personalized funded pension accounts of employees are justified. A number of unresolved problems of launching the second level of the pension system in Ukraine are outlined and the main ones are singled out. Prospects for further development of the third level of the pension system are considered. The main indicators of activity of non-state pension funds and tendencies of their further development are given. A comparison of payments from the State Pension Fund of Ukraine and non-state pension funds with a conclusion on the growing relevance of the latter and their strong investment potential for the Ukrainian economy are carried out. The place and role of life insurance in the pension savings market are highlighted. The advantages of the pension insurance system in comparison with the existing models are substantiated. The calculation of the pension in the insurance company as an alternative method of long-term accumulation is conducted. The high prospects for the accumulation of pension capital to achieve prosperity through the system of non-state pension insurance are argued. Recommendations for reforming the pension system in Ukraine are given. The directions of state support of the third level of the pension system are substantiated, namely accumulative life insurance and its positive impact on economic processes in Ukraine, reduction of social tension and indirect reduction of budget payments to socially vulnerable groups.

STATE PENSION INSURANCE IN UKRAINE: MODERN CHALLENGES AND DIRECTIONS OF REFORM

Introduction. Reforming the pension system in Ukraine is associated with the need to introduce a second funded level of pension insurance in the face of a steady deficit of the Pension Fund, the presence of significant shortcomings in the mechanism for calculating pension payments that do not depend on the volume of contributions paid for compulsory state pension insurance of the level of pensions, the level of which in the conditions the constant rise in prices for essential goods and services causes the impoverishment of the population. The purpose of the article is to conduct a comprehensive analysis of the domestic practice of generating budget revenues for the Pension Fund of Ukraine and spending in the context of permanent changes in the country, identify the main trends and challenges and determine the main directions for reforming the pension system of Ukraine. Results. An analysis was made of the domestic practice of generating budget revenues for the Pension Fund of Ukraine in the context of a reduction in incomes of the population due to quarantine measures due to the spread of COVID-19, job losses, crisis phenomena in the country's economy, as well as additional items of expenditure of the Pension Fund budget aimed at material support of citizens retirement age. The shortcomings of the current practice of functioning of the solidary system of pension insurance are identified. Conclusions. Substantiated proposals for the effective implementation of the second funded level of the pension insurance system in Ukraine. It has been determined that the combination of a solidary and funded pension insurance system in today's conditions is the best option, since it will diversify various types of risks and provide basic types of pensions.

Ostvarivanje i zaštita prava na porodičnu penziju vanbračnog partnera, ili šta NAM sve zakonodavac nije rekao?

The amendments to the Pension and Disability Insurance Act, enacted at the end of 2019, envisage that the right to a family pension can also be exercised by the surviving extramarital partner. Thus, extramarital partners have been equated (for the first time) with spouses in matrimonial relations. In order to be entitled to a survivor's pension, both spouses and extramarital partners must inter alia spend at least three years in marriage or extramarital union, or have a child together. The existence of an extramarital union is determined in a non-litigious proceeding. Although this statutory specification of the constitutional norm on the equality of marriage and extramarital union is praiseworthy, the authors point out that the new legal provision raises a number of issues. The situation is indisputable if a man and a woman were in an exclusive extramarital relationship that lasted for a long time, and particularly if they have at least one child together. However, in the event that one of them was in a parallel extramarital union with another person, or if the condition of gender differentiation does not exist or has ceased to exist, it raises the question how the existence of an extramarital union will be proven in non-litigious proceedings. The authors examine whether the existing legal framework provides for achieving the goal of the provision envisaged in the Pension and Disability Insurance Act, and how possible abuses of this right can be prevented in order to protect the conscientious (bona fides) users acting in good faith. Although the Serbian legislator finally decided to fully equalize marital and nonmarital unions in terms of exercising the right to a family pension, we believe that the existing solution needs to be improved in order to avoid confusion in practice and prevent possible abuses. Only the nominal introduction of the provision on the equality of married and non-marital partners with reference to the non-litigation procedure has already opened a number of questions in practice. In this paper, we point to some issues concerning the method of determining the quality of an extramarital union and the competition between two extramarital unions. An innovative solution, which would represent not only a concretization of the constitutional provision but also a qualitative contribution to the pension and disability insurance system, calls for amending the existing solution in the Pension and Disability Insurance Act, detailed regulation of the procedure for determining the existence of extramarital union as a named procedure in the Non-litigation Procedure Act, and the introspection what the legislator actually wants for and from an extramarital partner. Although it sounds like a serious task, the importance of an institution such as extramarital union certainly deserves not such an approach.