Abstract Following European pension reforms, the responsibility for old-age provision has increasingly shifted from the state to the individual. This study examines how behavioral norms and perceptions of parents’ or grandparents’ financial situation influence participation in the voluntary second pillar. Using survey data from two Italian provinces with high coverage of supplementary pension funds, the analysis shows that norms transmitted through family and friends strongly predict participation, whereas workplace norms matter only for women. Perceived financial hardship of older relatives increases both awareness of retirement planning and the likelihood of enrollment, underscoring the role of the social environment.

ABSTRACT The paper contributes to the current debates about the future of retirement pension systems in ageing European societies. Most of the countries in Europe provide the possibility for future retirees to have income at retirement from at least two (or three) pension pillars. Thus, the discussion on the role of the state in encouraging the development of private pension schemes in the Baltics is very relevant now, when political decisions are being made concerning the future of retirement pensions in the countries. Future trends of retirement pensions in Lithuania are analysed in terms of their sustainability and adequacy from two perspectives. First, the contribution rate is fixed when the pension is organised differently in terms of financing methods and sources. Second, the pension replacement rate is fixed, and the necessary contribution rates are assessed to keep it constant. Integration of multiple pension financing sources into the modelling scenarios of possible pension development in terms of their adequacy and sustainability adds novelty to the approach to this topic. The results of the analysis show that different distributions of the contribution among pension pillars financed by different financing methods and sources produce different incomes at retirement or that a constant pension replacement rate is achieved by different contribution rates depending on their sources and financing methods.

This study aligns with Sustainable Development Goal No. 10, which aims to reduce economic and social inequalities. Its primary objective was to assess the impact of early withdrawals from private pension funds on inflation in Peru during 2020–2024. The research employed an applied, quantitative approach with a non-experimental, longitudinal, and causal correlational design. The sample consisted of official documentary records issued by the Superintendency of Banking, Insurance, and Pension Fund Administrators (SBS) and the Central Reserve Bank of Peru (BCRP). Documentary analysis was used as the technique, guided by a validated expert judgment. Data processing was conducted using SPSS v27 software. Results indicated a moderate positive correlation (r = 0.520) and a statistically significant influence (p = 0.035), demonstrating that early withdrawals significantly affected inflation in the country. The linear regression model showed that these withdrawals explained 22.4% of inflation variability. Additionally, they had a significant impact on core inflation (p = 0.022), but not on non-core inflation (p = 0.055). It is concluded that, although necessary, these measures generated sustained inflationary effects that threatened economic stability.

In contemporary European welfare states, little attention is being paid to the ‘hidden welfare state’ of social tax expenditures (STEs) for private pensions. This lack of attention is surprising since the growing use of private pensions, like that of statutory pensions, has important implications for the public budget. The reason is that private pensions tend to benefit from reliefs in income taxes and social security contributions, which leads to government revenue losses. That we have little understanding of the size and social distribution of these STEs for private pensions is partially due to limitations of existing data. The available data typically overlook preferential social security contributions and/or do not cover all three phases (i.e. contributions, returns on investments and pension withdrawals) of private pension saving. To highlight the importance of conducting new empirical research on STEs, we examine Belgian second pillar pensions for employees (i.e. voluntary occupational pensions for employees) using newly available administrative data. This case study clearly demonstrates that more accurate measurements of STEs for private pensions are needed, not only to reveal these ‘hidden welfare states’, but also to improve cross-country comparisons of private pension expenditures and to properly include private pension expenditures in discussions on the financial sustainability of pensions.

ABSTRACT This paper investigates the spending and financial behavior of young adults in Estonia after they withdrew their pension savings from the previously mandatory second pillar. When the option was first implemented in 2021, one pension saver in five exercised it. We use account-level data to explore changes in spending and investing behavior, and in bank savings and debt holdings among those withdrawing. Regression analysis of differences in growth rates over various time horizons between matched samples reveals that early withdrawals have substantial short-term impacts on spending and the financial situation of those making the withdrawal, but these effects subside within half a year. The largest amounts were used for consumption and repayments of loans while the amounts invested were marginal.

At the request of the Superintendency of Banking Insurance and Private Pension Fund Administrators (SBS), a technical assistance mission from the Monetary and Capital Markets Department of the International Monetary Fund visited Lima, Peru during the period September 18 to October 1, 2024. Virtual meetings were also held during the period August 13 to 21, 2024. The purpose of the mission was to advise the authorities in developing a comprehensive cybersecurity strategy for the financial sector in Peru. The mission reviewed the cyber posture of Peru to assess current capabilities and challenges, met with financial sector authorities and external stakeholders to discuss developments and issues relating to the cyber resilience of the financial sector, and recommended actions to support the development of a comprehensive cybersecurity strategy for the financial sector.

With the first South Korean baby boomers having turned 65 in 2020, approximately 7.1 million are expected to reach old age by 2028, increasing the importance of retirement preparedness. Economic activity is often associated with better financial readiness for retirement, as it enhances household finances, improves quality of life, and mitigates psychological distress. However, few studies have explored how economic activity affects baby boomers’ retirement readiness, particularly through mediating factors such as depressive symptoms.This study examined the relationship between economic activity and economic retirement preparation among 1,080 South Korean baby boomers using data from the eighth wave of the Korean Longitudinal Study of Aging (KLoSA). Logistic mediation analysis was conducted using SPSS Process Macro Model 4. Economic activity (independent variable) was categorized as engaging in paid work (1) or not (0), whereas financial retirement readiness (dependent variable) was defined as participation in at least one public or private pension plan. Depression (mediator) was measured as a continuous variable, and the control variables included gender, household income, education, age, life satisfaction, and marital satisfaction.The findings showed that economic activity positively influences economic retirement preparation, which is mediated by reduced depression. These results highlight the dual benefits of economic activity in reducing psychological distress and enhancing retirement preparedness. This study underscores the importance of encouraging and supporting employment opportunities for baby boomers, as well as developing targeted education and policies to improve their financial and emotional well-being in retirement.

The universal pension funds in Bulgaria effectively entered their second stage of development—the distribution phase—in 2021. That year, the first insured individuals with accumulated funds in their individual accounts began receiving pension benefits or deferred payments from their chosen fund. However, 23 years after the introduction of universal pension funds in the country, most insured individuals still do not recognize their pension institution, let alone understand the different types of payment options currently available to them. The fintech industry may dramatically change this in the coming years, especially among younger generations who are far more adaptable to new technologies. This paper aims to assess the areas of the pension fund business where fintech applications could enhance efficiency and increase engagement among insured individuals - many of whom currently find the field unfamiliar or unappealing. The research is structured in two parts. The first examines the main risks and factors that influence pension fund accumulation and benefit amounts in a typical defined contribution scheme. The second presents selected findings from a broader study involving the use of artificial intelligence (AI) in VBA code structuring, focusing on a critical decision facing insured individuals today: whether to remain in their private pension fund until retirement.

This research investigates the long-term correlation between macroeconomic variables and the growth of private pension system (PPS) grams of gold funds in Turkey, employing Fourier ADL and FMOLS methodologies. The results indicate that grams of gold prices exert a substantial and considerable influence on the size of the PPS grams of gold fund. A 1% rise in grams of gold prices results in a 0.9% increase in the size of PPS grams of gold funds. Conversely, fluctuations in the BIST 100 index and exchange rates exert minimal influence on PPS grams of gold funds. The Fourier ADL test results demonstrate a long-term cointegration link between the series, notwithstanding structural breakdowns. This indicates that investors seek grams of gold as a refuge during financial instability and that grams of gold prices significantly influence PPS grams of gold funds. The results highlight the vulnerability of grams of gold investments in Turkey and the increasing significance of PPS grams of gold funds.

The aim of the article is to identify the demographic, economic, and financial factors influencing savings accumulation in Individual Private Pension Plans across selected European countries. The study utilized 2020 data from the Europe an Union Statistics on Income and Living Conditions. The countries selected for the study were those for which respondents answered the question on accumulating savings in individual pension plans. These countries included Poland, Czechia, Germany, Bulgaria, and Austria. Based on the literature, potential factors that may influence the accumulation of retirement savings have been identified. Considering the available data, potential independent variables were selected: age, gender, marital status, type of work contract, self-defined current economic status, the ability to spend a small amount of money each week on oneself, and non-cash employee income. The results obtained through logistic regression models revealed that not all analyzed variables were significant for each country. Only in Czechia did gender become a statistically significant determinant of savings in individual pension plans. In the case of Poland, Germany, Czechia, and Austria, the significant factors in systematically accumulating retirement capital by individuals are age and type of work contract. The ability to spend small amounts of money on oneself every week was statistically significant in Germany, Austria, and Czechia. For Bulgaria, non-cash employee income was the sole significant variable.

The changing demands of society and the emergence of new challenges necessitate the constant evolution and improvement of legal frameworks. In November 2019 Lesotho adopted the Pension Funds Act 5 of 2019 to modernise its regulation and supervision of private pension funds. Previously pension funds were regulated under the Income Tax (Superannuation and Assurance) Regulation, 1994 (Superannuation Regulation). Industry participants were of the opinion that the Superannuation Regulation was inadequate for the complexity of Lesotho's private pension funds system. The primary purpose of the Pension Funds Act of 2019 is to safeguard the financial interests of pension fund contributors and ensure their receipt of retirement benefits on retirement. With limited exceptions, section 40 of the Act prohibits the transfer or deduction of pension benefits. This article investigates the legal framework that regulates the power of a pension fund to deduct from pension benefits as well as the limitations on this power. The purpose of the article is to propose possible interpretations of the power to deduct, with the intention of assisting those who are involved in its implementation.

This research concludes that the Income Level (TPP) received by workers at retirement is only 10% of the last salary obtained from the mandatory pension program, a decrease in income of 90% of the last salary. The monthly living cost needs of retirees in retirement (food, monthly shopping, water costs - electricity, internet, lifestyle, health insurance, etc.) obtained data of IDR 5,600,000, - or equivalent to 56% of the last salary per month. So in actual terms, the level of retirement income (TPP) of retirees in Indonesia there is a gap of IDR 4,600,000, - or 46% less than the last salary per month. This condition causes retirees to fail to maintain their standard of living in old age, in addition to experiencing financial problems in retirement. Factors that affect the amount of a person's TPP consist of: 1) type of work, 2) pension program participated in, 3) length of service and salary amount, 4) investment return rate from the pension program, 5) government regulations, 6) macroeconomic factors and inflation, 7) health conditions of retirees, 8) family responsibilities, and 9) pension fund education determine the size of the level of retirement income. Optimizing private pension funds plays an important role in increasing TPP as a guarantee of income in retirement and creating financial independence in old age, in addition to improving quality of life. For this reason, private pension funds must be managed more optimally to achieve significant investment performance, improve pension fund literacy, target formal and informal workers, and diversify adequate products and services through digitalization of pension fund access and services to encourage significant growth in private pension fund participation.

The main purpose of the individual pension system is to direct the savings accumulated by individuals throughout their working lives into long-term investments, ensuring that they obtain an income to maintain their standard of living during retirement. Private pension companies are key components of the financial system, contributing to capital accumulation and fostering economic growth through the long-term funds they generate. This study seeks to assess the financial performance of thirteen private pension companies operating in Türkiye, utilizing eight financial ratios based on data from 2022. Initially, the entropy method was employed to determine the weight of each financial ratio criterion. Subsequently, the TOPSIS method was applied for performance analysis. According to the TOPSIS results, a ranking of private pension companies was established, identifying Viennalife Pension.

This study examines the impacts of taxation on investments in complementary retirement plans in the context of tax reform. Focusing on private retirement, we investigate how proposed changes affect private pension plans and their beneficiaries. Utilizing a multidisciplinary approach that combines economic and legal analysis, we explore the implications of current and proposed tax policies for investors and the pension system as a whole. Our analysis reveals important insights into tax incentives and challenges faced by participants in complementary retirement, providing a comprehensive view of the effects of tax reform on this crucial aspect of retirement financial security.

Abstract In recent decades, analysing the progression of mortality rates has become very important for both public and private pension schemes, as well as for the life insurance branch of insurance companies. Traditionally, the tools used in this field were based on stochastic and deterministic approaches that allow extrapolating mortality rates beyond the last year of observation. More recently, new techniques based on machine learning have been introduced as alternatives to traditional models, giving practitioners new opportunities. Among these, neural networks (NNs) play an important role due to their computation power and flexibility to treat the data without any probabilistic assumption. In this paper, we apply multi-task NNs, whose approach is based on leveraging useful information contained in multiple related tasks to help improve the generalized performance of all the tasks, to forecast mortality rates. Finally, we compare the performance of multi-task NNs to that of existing single-task NNs and traditional stochastic models on mortality data from 17 different countries.

This paper develops a unified theory integrating the three pillars of the pension system—public, occupational, and private pensions—within a heterogeneous-agent overlapping generations (OLG) model. By incorporating income heterogeneity and institutional features unique to each pillar, the model captures how individuals across the income distribution participate in the pension system and derive utility. We characterize the distinct yet interactive roles of each pillar in providing risk sharing and retirement security and identify fundamental trade-offs in pension design. Our model provides a laboratory for analyzing the coordination of the three pillars that aims at enhancing equity and fiscal sustainability.

The purpose of the study was to identify key issues in the legal regulation of the pension fund of the Kyrgyz Republic and to develop proposals for their effective resolution based on the analysis of international practices in various economic systems. The study involved an analysis of legislation using the formal-legal method, a comparison of pension systems in Germany, Sweden, Chile, and Canada through the comparative method, and modelling potential development scenarios for pension legislation using legal forecasting. The main findings demonstrated that the pension system in Kyrgyzstan remains reliant on state sources, limiting its capacity to adapt to changing international financial conditions. The primary challenges in legal regulation included the lack of flexible investment mechanisms and weak control over asset management. Comparative analysis also revealed that countries with diversified pension systems, such as Germany and Canada, pension systems are more resilient due to asset diversification and the utilisation of private investment funds. In countries like Sweden and Chile, there is a growing interest in private pension savings and the implementation of digital technologies for managing pension assets, contributing to greater transparency and efficiency in pension systems. Based on the analysis of international practices, recommendations were developed to strengthen the legal regulation of the Kyrgyz pension fund, including the adoption of international standards of financial transparency and the development of mechanisms to attract private investments into pension assets. The findings indicated the necessity for modernisation of the legal regulation of pension funds in Kyrgyzstan, considering international practices to ensure resilience, transparency, and the protection of participantsʼ rights

As pension benefits from statutory public schemes become less generous, and many countries face pension-savings crises, the willingness to participate in supplementary retirement saving instruments becomes crucial for sustainable financial well-being. The main objective of this article is to present how trust and financial literacy influence the choice of sustainable auto-enrolment pension scheme as a private and supplementary pension savings. The study highlighted factors influencing participation in auto-enrollment and private supplementary pension savings. The study focuses mainly on financial literacy and trust. We used the CAWI method with 857 interviews in Poland—the first country in Central and Eastern Europe to introduce an auto-enrolment pension system. Our study uses multivariable data-mining tools, and several regression models were applied. We used Logistic Regression (LR), Multivariate Linear Regression (MLR), and Factor Analysis of Mixed Data (FAMD) to support the LR analysis. We propose four regression models. Our findings present that: 1. The lower the consumer’s knowledge level, the more their decisions are based on trust. 2. Trust in the state, rather than trust in financial institutions, plays a crucial role for people with low financial literacy, which is a critical factor in choosing the auto-enrolment option for pension savings. 3. Men had higher odds of auto-enrolment pension saving than women. 4. Employees of economic universities and academics had higher odds of participating in capital pension plans than those of general universities and non-academics. Our findings can signal to governments and policymakers about factors influencing the choice of auto-enrolment supplementary retirement savings. These findings strengthen the role of sustainable economic education.

The impact of personality, behavior, and geography on participation in the private pension system in Türkiye: A machine learning approach

Abstract Due to the implementation of several pension reforms, Italian individuals have to take more complex financial decisions and have more responsibilities on their retirement well-being which also includes the choice of whether to participate in pension funds. Relying on novel survey data, we empirically investigate the effect of pension and financial knowledge on the probability of pension plan participation in Italy. Despite documenting the already well-known trends about disparities in the level of such knowledge, we are able to establish that only pension literacy has a positive and causal effect on the probability to participate in a private pension fund.