Pension Policy Research Articles

Automatic Indexation of the Pension Age to Life Expectancy: When Policy Design Matters

Increasing retirement ages in an automatic or scheduled way with increasing life expectancy at retirement is a popular pension policy response to continuous longevity improvements. The question addressed here is: to what extent is simply adopting this approach likely to fulfill the overall goals of policy? To shed some light on the answer, we examine the policies of four countries that have recently introduced automatic indexation of pension ages to life expectancy–The Netherlands, Denmark, Portugal and Slovakia. To this end, we forecast an alternative period and cohort life expectancy measures using a Bayesian Model Ensemble of heterogeneous stochastic mortality models comprised of parametric models, principal component methods, and smoothing approaches. The approach involves both the selection of the model confidence set and the determination of optimal weights. Model-averaged Bayesian credible prediction intervals are derived accounting for various stochastic process, model, and parameter risks. The results show that: (i) retirement ages are forecasted to increase substantially in the coming decades, particularly if a constant period in retirement is targeted; (ii) retirement age policy outcomes may substantially deviate from the policy goal(s) depending on the design adopted and its implementation; and (iii) the choice of a cohort over period life expectancy measure matters. In addition, the distributional issues arising with the increasing socio-economic gap in life expectancy remain largely unaddressed.

Review of Ke Meng, China's Pension Reforms: Political Institutions, Skill Formation and Pension Policy in China, Routledge, 2019

Review of Ke Meng, China's Pension Reforms: Political Institutions, Skill Formation and Pension Policy in China, Routledge, 2019

An Empirical Study on the Implications of Management Theories on Workers for Optimum Productivity in Terms of Total Quality Service Delivery With Reference to Shell And Shell Nigeria

The fundamental considerations upon which all business organizations are established are productivity, profitability and efficiency. Scholars assert that no matter how automated an organization may be, high productivity still depends on the level of motivation and the effectiveness of the workforce. Herzberg discusses the relationship between productivity and satisfaction among workers. He postulates that work itself can act as a motivator, provided that it is made sufficiently interesting. He contends that job satisfaction consists of two separate and independent dimensions - the one relating to job satisfaction (intrinsic factors) and the other relating to job dissatisfaction (extrinsic factors). These dimensions, according to him, are not opposite ends of the same continuum rather they represent different continuums, The problem of motivation and employees' productivity has assumed more importance because of the worsening socio-economic situation in most countries. Consequently, the main problem of this study is to conduct an empirical study on the implications of management theories on workers for optimum productivity in terms of total quality service delivery. Today Shell technically not one company but a group of more than 200 separate companies, is one of the largest businesses in the world with almost $!10 billion turnover, and 104,000 employees in more than II0 countries. Shell has developed high business principles which require balancing short and long term interests, integrating economic, environmental and social considerations into business decision-making. In gathering data for this study, flvto main sources wen employed. These are primary and secondary sources. The primary sources include data from direc: responses to interviews with .selected respondents, participant observation, structured questionnaires ant reports from research assistants that were recruited by the researcher. These instruments enable us to elicc information on the problematic which the study seeks to unravel The truth of the fact remains that if the workers are adequately motivated through payment of fair and adequate wages, prompt and regular payment of salaries, regular promotions, good gratuity and pension policies, etc., they would perform the& optimal best.

Can't save or won't save: financial resilience and discretionary retirement saving among British adults in their thirties and forties

AbstractThis study examines retirement saving activity outside the state and workplace pension saving schemes among British adults aged between 30 and 49 on the premise that individuals are increasingly encouraged to save for their retirement in the new pension policy structure in Britain. The issue of under-saving among the younger adults has been studied with the focus on internal characteristics, such as undesirable attitudinal or behavioural tendencies (‘won't save’), or on external factors, such as income (‘can't save’). Building on these discussions, this study tests the role of internal characteristics and further examines the interplay between internal and external factors. The decision-making process for retirement saving is mapped based on the Model of Financial Planning with minor modifications. The analysis utilises the fourth wave of the Wealth and Assets Survey (2012/2014), and is conducted in the structural equation modelling framework. Results show that younger adults’ discretionary retirement saving is an outcome of a complex interplay between internal and external factors.Financial resilience, which indicates current financial behaviours and wellbeing, is found to be the strongest predictor for identifying a discretionary retirement saver, but it is closely connected to individuals’ income and home-ownership. The findings also suggest that social and economic arrangements are important to consider associal ageing, individuals’ projection on their lifestages, may be more informative than ageper sefor understanding younger adults’ retirement saving behaviour. These findings have important implications for the policies that aim to increase retirement saving participation.

Addressing the life expectancy gap in pension policy

Understanding the systematic relationship between period and cohort life expectancy and how the relationship evolves over time are critical issues in formulating the design of retirement income products, evaluating the actuarial balance of pension schemes, and more generally for all analyses where demographic projections are involved. In this study, estimates of the life expectancy gap at all ages are performed using data for 1960–2018 from the Human Mortality Database and projections are generated through 2050 for the 42 national populations, disaggregated by sex. Contrary to previous research that often uses a single deemed to be «best» model to forecast mortality rates, we use a novel adaptive Bayesian Model Ensemble of heterogeneous parametric generalized age-period-cohort stochastic mortality models, principal component methods, and smoothing approaches. The procedure involves both the selection of the model confidence set and the determination of optimal weights. Model-averaged Bayesian credible prediction intervals are derived accounting for both the uncertainty arising from model error and parameter uncertainty. With intergenerational actuarial fairness and neutrality as the guiding principles the study then explores potential policy interventions to address the consequences of the life expectancy gap - spanning over adjustments in the accumulation, benefit determination, and payout stages. Comprehensive numerical results are provided for two policy options: (i) introducing a sustainability factor; and (ii) conditional pension indexation. The results show that: (i) the life expectancy gap is positive and significant for almost all countries and years studied, (ii) it will continue to increase, (iii) the magnitude of the subsidy rates between generations can be sizeable demanding important initial pension benefit reduction and/or a gradual diminution in the annual indexation rate of pensions to correct them.

Back to the familialist future: the rise of social policy for ruling populist radical right parties in Italy and Poland

This article contributes to the emerging studies of populist radical right parties’ social policies by looking at two cases, Italy and Poland, where such parties have been in office without the constraint of mainstream pro-market coalition partners. The comparison of two cases with different historical/institutional paths and economic conditions shows how important high-visibility, high-expenditure social policies can be for populist radical right parties (PRRPs) once in government. More specifically, the analysis of pension and family policies reveals important parallels in the revamping of familialistic aspects of the welfare state, despite demographic and economic pressures. The findings demonstrate that social policy is more important and less focussed on welfare chauvinism than assumed by the literature on PRRPs. This is explained by PRRPs’ electoral expansion strategy towards more deprived groups, which in countries with a strong conservative Catholic presence is achieved through ideological repertoire expansion towards familialism, which can address both the material and cultural interests of the new electorate.

Impact of Income on Life Expectancy: A Challenge for the Pension Policy

The aim of this paper is to present life expectancy of both genders depending on their income and to determine the impact of a possible regularity on the state pension policy. The study was based on the income of pensioners in Poland (over 5 million people receiving old-age pension). The results obtained made it possible to formulate several important conclusions: the rich live longer; the impact of income on life expectancy is much stronger among men than women; and with age, income has less and less impact on life expectancy. Consequently, in the capital model that is in force in Poland, the state should take this fact into account in its pension policy when calculating the amount of the benefit.

Discussion on the research and development demand and market benefit of intelligent disability nursing equipment — Analysis from the perspective of welfare pluralism

In order to better serve the disabled, the state strongly supports the research and development and production of intelligent nursing equipment, thus ensuring and improving the quality of life and the sense of happiness of the disabled. This paper analyzes the current market situation of disabled nursing equipment and nursing products at home and abroad. Combined with the national pension and welfare policies, the paper analyzes the current market demand, market benefit and investment risks of intelligent disabled nursing equipment from the perspective of welfare pluralism, aiming at the development demand of intelligent disabled nursing equipment. This paper provides research and development suggestions and countermeasures for intelligent disability nursing equipment of Anhui Liwei Precision Machinery Co., Ltd.

Pension reform and the solution of the housing problem: Singapore and Kazakhstan

This article discusses some theoretical conceptual aspects of the problem of Public Administration in Singapore. At different stages of its economic development, the Singapore government has faced various housing problems. In the 1960s, a comprehensive system of land and housing provision and financing was created to solve the problem of housing shortages. This article analyzes the main pillars of the reform of the pension and housing systems, in particular, identifies such issues as the rules for resolving pensions, providing the population with social housing, the importance and necessity of the Central Provident Fund Board in Singapore, the policy of ethnic integration and the rental scheme. In this article, the main policy changes presented were evaluated and recommendations for reforming the housing market were given. The long-term evolution of Singapore’s economy has been analyzed in comparison with the past, and we have tried, in addition to analyzing the current situation, to give forecasts and political recommendations for the future. In addition, in this article, we studied the practical value and significance of Singapore’s experience for Kazakhstan, comparing the main similarities and differences in pension and housing policy reform in Singapore and Kazakhstan. Key words: Singapore, Government, Public Administration, reform of pension and housing systems, social housing.

Expansion of Thailand’s social pension policy and its implications for family support for older persons

AbstractThailand is among the few developing countries that provide social pension for a significant majority of its older adults. In 2009, the government amended the Old‐Age Allowance (OAA) scheme from a means‐tested to a near‐universal social pension program. Analyzing nationally representative data from the Surveys of Older Persons in Thailand, we found significant changes over the last decade in the patterns of old‐age income sources and filial economic support for parents aged 60 and above. Results show the declining importance of children and the rising significance of OAA as the primary income source. Yet, reliance on OAA was not necessarily associated with a decline in nonmonetary intergenerational support for the parents. Findings reveal that older persons whose main income source was OAA were less likely than others to report income adequacy and positive psychological well‐being, suggesting that the scheme may have little impact in dampening inequality among older Thais.

How the Pension System Responds to Pandemic Shocks: A Case Study of Georgia

The paper focuses on the impact of the pandemic crisis on pension system in Georgia and analyzes the pros and cons of the ongoing pension reforms in the country. Decreased birth rates and increased life expectancy over the next decades will significantly change the picture of the age distribution of the population in many countries. As life expectancy increases and the birth rate decreases, more people retire than are added to the workforce. A change in the demographic picture necessitates fundamental pension reform. At the same time, the world is facing a crisis caused by the COVID-19 pandemic. The future is uncertain, both medically and financially. Despite optimistic forecasts, the second wave of the COVID-19 pandemic has begun in many countries which further increases the degree of uncertainty. Funded pension schemes suffer from the crisis because lower returns diminish their asset values, while low yields on public debt instruments increase the present value of their liabilities. This can generate both explicit fiscal risks— in the case of government guarantees—and implicit fiscal risks through lower private pension benefits or financial strain on the sponsoring employers. Our research is focused on the pension system and its development problems in Georgia, taking into account that since 2019, 1st January, the existing financial, demographic and economic challenges have determined the establishment of a new pension system. Main sources for the research are data gathered from the international organizations and local governmental and statistical data softwares. Our research results show that the pension reform launched in 2019 in Georgia is a significant step forward in reducing social imbalances and fiscal pressures in the medium / long term. However, for further development, it is important to systematically assess the effectiveness of pension policies, taking into account factors such as changes in demographic structure, expected fiscal spending, the inequality gap and the crisis caused by the COVID-19 pandemic.

ПРОБЛЕМИ СИСТЕМИ ПЕНСІЙНОГО ЗАБЕЗПЕЧЕННЯ В УКРАЇНІ

Introduction. It is important to study the problems of the modern pension system in Ukraine and find ways to improve its development in the context of European integration. In this context, the issue of structural and parametric transformation deserves attention, which will create conditions for equalization of lifelong consumption, poverty reduction among people who have lost their ability to work, increase their quality of life, reduce social differentiation, economic growth through pension contributions. The purpose of the article is to substantiate the theoretical foundations and practical approaches to the development of the pension system in Ukraine. Results. The essence of the pension system, pension, pension provision is theoretically substantiated, their structure, functions are clarified, scientific approaches are generalized and own interpretation of the concept “pension system” is offered. It is a set of legal, economic, social, financial and organizational norms and institutions to create appropriate conditions that act as a leading factor in social reproduction for the material security of individuals in the form of decent pension benefits. The levels, tasks, tools, components of the implementation of pension policy and strategies for the development of pension provision are substantiated. A retrospective analysis of the formation and development of the pension system in Ukraine, to determine the features of the current stage and prospects for transformation in the context of European integration. The peculiarities of the structure and dynamics of the development of the system of solidary pension provision of persons who have lost their ability to work, its efficiency and fairness have been studied. Organizational-institutional and functional changes in the national pension system are substantiated, ways to implement them in the context of European experience are developed. Conclusions. The current pension system of Ukraine in legal, organizational, economic and social terms needs fundamental changes that would make it adequate to the conditions of the transition period and socially-oriented market economy. Keywords: pension system; private pension provision; investments; cumulative pension provision; an economy; economic policy; financial instruments.

The substitutive state? Neoliberal state interventionism across industrial, housing and private pensions policy in the UK

This article advances the notion of ‘the substitutive state’ to explore the changing character of state institutions and state action in the context of neoliberalization. This understanding is contrasted with alternative accounts of state neoliberalization such as ‘the regulatory state’ and ‘the competition state’. It focuses upon the UK, and three domains of economic statecraft in particular: industrial policy (primarily the May government’s 2017 industrial strategy), housing policy (primarily extensive support for mortgage lending and borrowing since the 2008 financial crisis) and private pensions policy (primarily the establishment of state-owned pension scheme providers in the context of ‘automatic enrolment’ regulations). The article argues that state action in the UK increasingly encompasses new mechanisms for intervention in the private economy. However, associated policy practices are rarely strategic or purposeful. Interventionist mechanisms are often populated by the private economic actors implicated in the problem intervention is designed to solve, or are used to relieve the private sector from serving unprofitable market segments. Substitutive statism is aligned with a wider accumulation regime which state actors perceive as immutable; they are therefore willing to intervene to sustain this regime, irrespective of market signals. In short, state institutions have a more expansive interventionist footprint, but are doing less with more. In contrast to accounts of ‘the neoliberal state’, we should not assume that these institutions add up to ‘ the state’, albeit a state with neoliberal characteristics. State action has always been a central, organizing element of neoliberalism, although its form has evolved as neoliberal ideas confront capitalist accumulation in practice.

Targets missed: three case studies exploiting the linked SHARE-RV data

AbstractTargeting is an important aim of social policy. Three case studies in this paper reflect typical short-comings in the targeting design of pension reforms. The first case study examines how well work disability and receipt of disability insurance match in Germany. We show that the 2001 reform has not systematically improved target quality. The second case study examines whether the 2014 introduction of a new pathway of early retirement without actuarial adjustments has reached individuals who are less healthy because they have worked a long time in an arduous job. We find that the target population is actually healthier than the comparison group. Third, a much discussed supplemental pension benefit for households in the risk of poverty will miss its target population in both relevant directions: Regarding the first, 23% of those pensioners who are not eligible are nevertheless poor in the sense of the new law. Regarding the other direction, 21% of the eligible pensioners belong to the wealthier half of German pensioners. Since similar reforms are currently debated in many European countries, the three German case studies may serve as examples of how to better target public pension policies.

Influencing factors analysis and development trend prediction of population aging in Wuhan based on TTCCA and MLRA-ARIMA.

With the rapid development of the economy, the problem of population aging has become increasingly prominent. To analyse the key factors affecting population aging effectively and predict the development trend of population aging timely are of great significance for formulating relevant policies scientifically and reasonably, which can mitigate the effects of population aging on society. This paper analyses the current situation of population aging in Wuhan of China and discusses the main factors affecting the population aging quantitatively, and then establishes a combination prediction model to forecast the population aging trend. Firstly, considering the attribute values of the primary influence factors are multi-source heterogeneous data (the real numbers, interval numbers and fuzzy linguistic variables coexist), a two-tuple correlation coefficient analysis method is proposed to rank the importance of the influencing factors and to select the main influencing factors. Secondly, a combination prediction model named Multiple Linear Regression Analysis-Autoregressive Integrated Moving Average is established to predict the number and the proportion of aging population in Wuhan. By using the statistical data of Wuhan in the past 20 years, this combination prediction model is used for empirical analysis, and a prediction result of the number and the proportion of aging people in Wuhan in the future is obtained. Based on these quantitative analysis results, we propose some countermeasures and suggestions on how to alleviate the population aging of Wuhan from aspects of economic development, pension security system design and policy formulation, which provide theoretical basis and method reference for relevant population management departments to make scientific decisions.

Pension behavior and policy

Individuals benefit from smoothing consumption over time, a fact well illustrated in the domain of pension spending. But many potential benefits from consumption smoothing are lost in practice due to an overconsumption in the present and near-future compared to the far-future, which is known as “present bias”. Present bias’s impact on pensioner welfare could potentially be exacerbated by international trends toward greater pension freedoms. However, actual pension spending decisions can involve sudden transitions into bankruptcy, which are hard to reconcile even with behavioral hyperbolical discounting models that are traditionally used to explain present bias. We consider an intertemporal consumption problem from a time-consistent but bounded rationality perspective. In this limited foresight framework, an individual exponentially discounts utilities (at constant rate, r) for a finite amount of time (until S) but ignores utilities that occur beyond that (up to T). The consumption paths implied by this simple model involve sudden transitions into bankruptcy at time S, resembling observed patterns from an international dataset on pension spending. Furthermore, this perspective suggests that individuals could be helped to appropriately smooth consumption over time via policy interventions directed at extending their level of foresight.

Does Social Responsibility Always Begin at Home? The Relation Between Firms’ Pension Policies and Corporate Social Responsibility (CSR) Activities

Pension freezes are highly visible corporate actions with the potential to hurt the firms’ reputation as a “responsible” employer. We document that firms sponsoring defined-benefit pensions step up CSR engagement following announcements of defined-benefit pension freezes. Freeze firms also increase their usage of CSR-related keywords in public disclosures following the freeze. We find a stronger CSR response to relatively more severe freezes, to more controversial cash-balance conversions, and in larger sponsors. This is consistent with CSR increases being motivated by the need for reputation-repair. We also find that CSR increases following an accounting rule change that makes pension deficits more visible. Collectively, our findings highlight an important driver of CSR: the need to restore or manage reputation, especially in the face of corporate actions that can hurt stakeholders.

Pensions, Income Taxes and Homeownership: A Cross-Country Analysis

This paper studies the role of pensions and income taxes in determining homeownership and household wealth. It provides a cross-country analysis, using tax and pension policy designs in Germany, the US and Australia. These developed nations have similar incomes per capita but very different homeownership rates, with the US and Australia having much higher homeownership compared to Germany. The question is to what extent the observed differences in homeownership are induced by national tax and transfer policies. To that end, we develop a stochastic, overlapping generations (OLG) model with tenure choice. The model is calibrated to Germany featuring German statutory public pension and dual income tax systems, and then applied to study the effects of alternative income tax and pension policy structures. Our simulation results indicate that the US and Australian policy designs have a dramatic impact on homeownership, explaining more than half of the observed differentials. We also show significant macroeconomic effects due to differences in tax and pension policies.

ДЕМОГРАФИЧЕСКИЕ И СОЦИАЛЬНЫЕ ПРОЦЕССЫ В МУРМАНСКОЙ ОБЛАСТИ В КОНТЕКСТЕ РЕАЛИЗАЦИИ ПЕНСИОННОЙ РЕФОРМЫ

The article deals with demographic and social processes in the Murmansk Oblast in the context of the implementation of pension reform in the Russian Federation. Theoretical and methodological ideas concerning the pension policy in the world and in the Russian Federation are summed up; the influence of retirement age increase on the number of working-age population in Russia and in the Murmansk region is estimated; sentiments of population of the Murmansk region in the context of the pension reform are revealed.

Fair Pension Policies with Occupation-Specific Aging

Fair Pension Policies with Occupation-Specific Aging