Pension Savings Research Articles

Rancang Bangun Aplikasi Penentuan Kelayakan Pemberian Pinjaman Kepada Pensiun Menggunakan Metode Weighted Product

In supporting the operation of PT. Pos Indonesia, one of which is offering retirees such as pension savings and pension credit. Credit is the provision of money or bills based on an agreement or loan agreement between a company and another party. In providing pension credit, it must be accurate and accurate for retirees who are entitled or eligible to get a loan. So the author makes an application to determine the feasibility of lending in order to make it easier to determine which retirees are eligible to be given a credit loan. This study uses the Weighted Product (WP) method, which is one method of decision making. By using the Weighted Product method can help in making lending decisions by doing a ranking process that will determine the best alternative from retirees. The author uses five criteria, namely, the amount of salary, loan amount, age, credit period, and what credit. The application of determining the feasibility of lending to pensions is based on a website using the code igniter framework. For designing or modeling this application uses UML (Unified Modeling Language). This research resulted in an application that helped in determining a proper pension to be given a pension loan using Weighted Product.

Cash transfers' effect on government support: the case of Fiji

While some scholars have found that government post-disaster assistance supports the incumbent, others have shown that incumbent effects among beneficiaries are imperceptible or negative. This article contributes to this debate by using a regression discontinuity design of households affected by Tropical Cyclone Winston in Fiji to show that the type of assistance provided is an important variable in understanding the effects of aid on perceptions of the government. Residents of Fiji who received a post-disaster cash transfer are up to 20 per cent more likely to be very satisfied with the government than are those who did not. The probability further increases if the cash transfer was provided along with in-kind benefits or vouchers, but it is not affected if beneficiaries were also encouraged to use their own pension savings. This paper provides evidence in favour of the 'attentive citizen' theory by demonstrating that beneficiaries actively appraise government responses; it also reveals possible effects of elite capture on the relationship between the government and beneficiaries.

Japan's Public Sector Balance Sheet

This paper compiles and reviews the evolution of Japan’s Public Sector Balance Sheet (PSBS). In the past, large crossholdings of assets and liabilities within the public sector played a role in sustaining a high level of public debt and low interest rates. The Fiscal Investment and Loan Fund (FILF) channeled all postal deposits and pension savings to financing of public sector borrowing. After the FILF refrom in 2000, however, the Post Bank and pension funds shifted their assets to the portfolio investments and are seeking to maximize risk-adjusted returns. This has changed the implications of crossholdings for public debt management. In the future, population aging is expected to add more pressures on the PSBS, which already saw a considerable decrease of net worth over the last three decades.

Управление средствами пенсионных накоплений в системе обязательного пенсионного страхования: анализ текущего состояния, проблемы и пути совершенствования

The study analyzes the current situation of pension savings funds management in the mandatory pen-sion insurance system. It identifies the main modern problems of this management: a moratorium on the transfer of pension savings from Pension Fund of the Russian Federation to non-state pension funds and private management companies, participating in the pension system; the inertial nature of the devel-opment of the mandatory pension insurance sys-tem, and the absence of financial instruments that allow for stable and long-term accumulation of pen-sion funds. In this regard, it is proposed to reform not only the pension system, but also the entire work of the stock market, to determine the develop-ment of the accumulative component of the manda-tory pension insurance system, to develop financial instruments with fixed income for the long term.

The Efficiency of a Supplementary Old-Age Pension System – the Case of Polish Voluntary Pension Funds

Abstract The aim of this article is to evaluate the effectiveness of voluntary pension savings plans in Poland, based on the principles of operation and rates of return of voluntary pension funds (pol. Dobrowolne Fundusze Emerytalne, DFE). The selection of those funds from a whole range of solutions available in the 3rd pension pillar is due to the fact that only this type of voluntary pension saving plan provides complete and transparent information about the actual investment policy, the composition of pension investment portfolios, and the achieved rates of return. In order to evaluate the investment policies and the effectiveness of DFEs, the following research methods were used: a literature analysis, an analysis of financial data, and basic methods of investment efficiency assessment. The results of the evaluation lead to the conclusion that despite their adoption of similar investment strategies, the DFEs have achieved very different values of effectiveness. In the years 2013-2018, selected funds achieved higher than average rates of return, while others achieved returns that were no better than the interest rates of standard bank deposits.

Operational Hedging to Foreign Exchange Risk – Case of Kosovo Pension Savings (KPST)

Operational Hedging to Foreign Exchange Risk – Case of Kosovo Pension Savings (KPST)

Конкуренция на сегменте коллективного инвестирования средств пенсионных накоплений

<span>Целью статьи является оценка уровня конкуренции на сегменте коллективного инвестирования средств пенсионных накоплений. Дана характеристика субъектов рынка, определены основные параметры конкурентной борьбы по критериям рыночной доли, финансового продукта и рыночных барьеров, рассчитаны показатели концентрации. Индекс Херфиндаля-Хиршмана позволил определить, что, несмотря на ослабевание уровня монополизации, данный сегмент рынка все еще остается высококонцентрированным. Установлено, что уменьшение степени концентрации обусловлено снижением рыночной власти страховщика в лице Пенсионного фонда России. Доказано (на основе применения коэффициента Линда), что происходит «сужение» рынка и концентрация пенсионных накоплений во все более ограниченном круге «ядерных» субъектов.</span>

Financial literacy and voluntary savings for retirement: novel causal evidence

ABSTRACTWe utilise recent Household Finance and Consumption Survey microdata to report first causal effects of financial literacy on voluntary private pension schemes participation for a Central and Eastern European (CEE) country, namely Slovakia. Savings for retirement in the supplementary pension schemes are positively associated with financial literacy after controlling for a set of relevant socio-economic variables. One additional correctly answered financial literacy question leads to a 5.6 percentage points increase in the probability of having a voluntary pension savings plan in our ordinary least squares estimates. The causal impact of financial literacy increases to 19.5 percentage points when we address potential endogeneity problems by novel to the literature instrumental variables.

The Intergenerational Impact of China's New Rural Pension Scheme

The Intergenerational Impact of China's New Rural Pension Scheme

The Importance of Behavioural Factors for Pension Savings Decisions – Cross-Country Evidence

In this study, we challenge the problem of inadequate voluntary pension savings by exploring the micro-dataset of the Luxembourg Wealth Study (LWS) for three countries: Italy, the United Kingdom and the United States. The existing empirical literature usually focuses on the role of socio-demographic factors to understand this phenomenon, and theoretical studies additionally highlight the role of behavioural factors. However, empirical studies in this field are extremely scarce. The use of the LWS data enables us to fill this research gap. Separately for each country, we verify the role of individuals' risk attitudes and intertemporal choices in the demand for voluntary pension savings. To make the results more robust, we add a set of socio-demographic control variables to our regressions. Our findings clearly reveal that being more risk averse and being less forward looking negatively affect people's propensity to save for retirement. Furthermore, we confirm that age, gender and education are significant predictors of pension demand in each of the analysed countries. We argue that these conclusions have practical meaning to improve regulatory frameworks.

Taking Control: Active Investment Choice in Singapore’s National Defined Contribution Scheme

This paper examines what factors drive active investment choice among more than 7,000 older plan participants in the Singaporean Central Provident Fund (CPF), and assesses the extent to which financial knowledge, experience, and attitudes help predict such choice. We find that only 16% of plan participants aged 50 and above in our sample in 2016 invest a portion of their pension savings outside of the default government-run CPF fund. Plan participants who are male, younger, not married, currently working for pay, have higher risk tolerance, and higher net worth are more likely to choose to actively manage their pension savings. Education is a strong independent determinant of active investment choice, but its effect diminishes with age. Longer-term financial planning horizon and experience in managing household finances, as well as in stocks investment, are also significantly associated with higher self-invested balances. Financial literacy score is, however, not significantly associated with non-default decision-making in our sample. Our findings have important implications for policy makers seeking to encourage greater individual responsibility in pension savings and investments within defined-contribution retirement systems.

Age of Decision: Pension Savings Withdrawal and Consumption and Debt Response

This paper exploits an administrative regulation in Singapore that allows individuals to withdraw between 10% and 30% of their pension savings at age 55. We find a large and highly significant increase in individuals’ bank account balances within the first month of turning 55, which declines by about a third by the end of 12 months. Consumers use the increase in disposable income to pay down credit card debt. Liquidity constrained individuals are significantly more likely to increase their spending upon turning 55 than unconstrained individuals—nonetheless, the spending response of constrained individuals is concentrated on nondurable and nonvisible goods rather than visible goods. We also provide evidence that withdrawal behavior is responsive to the prices of durable goods such as cars. Consumers appear willing to forego much higher interest rates in their retirement accounts by leaving a sizeable portion of their withdrawn savings in a low-interest accruing bank account for at least a year after withdrawal. We show that, for some consumers, part of this behavior may be due to the desire to invest in the property market when housing returns are high. This paper was accepted by Gustavo Manso, finance.

Deciding to invest responsibly: Choice architecture and demographics in an incentivised retirement savings experiment

We report results from a framed field experiment with a realistic retirement savings simulation to examine two factors in socially responsible investment (SRI) decisions: characteristics of investors and the investment choice architecture. We find that default options, age and values are significant explanators while infographics, gender, education and income are not. Further, repeated decisions affect SRI negatively through donor fatigue and positively through windfall gains. Our results suggest SRI is significantly limited by the non-ethical default options pension providers commonly set. Conversely there is scope for nudging pension savers towards socially responsible investments using defaults.

Modern tendencies of functioning of nongovernmental pension funds in the system of obligatory pension insurance

This article summarizes and systematizes key trends in the development of non-state pension funds (NPFs) in the exercise of the functions of trust management of pension savings of citizens for the period from 2005 to 2017. The participation of non-state pension funds in the compulsory pension insurance system has led to their emergence as the largest insurer, so starting from 2016, the NPF, as a large institutional investor, began to concentrate more than half of all pension savings funds transferred to management. A quantitative analysis of the institutional structure of the Russian system of trust management of the pension system means allows determining the main directions of its transformation; there is a clear tendency to a reduction: the total number of NPFs operating in the OPS system. The article defines the strategy of investing APFs in various classes of assets during the study period, it has been revealed that of the total amount of invested pension savings in corporate securities, 2/3 of them fall on NPF investments. Over the last analyzed period, there has been a sharp increase in the investment of pension savings of NPFs in government securities, which is largely due to the tightening of regulatory requirements for the risk level of portfolio investment. Important areas of research are evaluating the effectiveness of the functioning of APFs in the system of compulsory pension insurance from the position of comparing the accumulated return on the NPF portfolio with accumulated inflation for the period analyzed, and also according to the criterion of actually accumulated investment income with indexed income on inflation.

HISTORICAL DEVELOPMENT AND CHARACTERISTICS OF PENSION SYSTEMS

This study examines the development of pension systems based on the main classical models: capital-covering, cost-covering and mixed. Particular attention is paid to the types of pension savings, whereas analyzed in detail are corporate pension funds, independent pension funds and funds providing one-off lump sum at a certain age and upon retirement due to old age or disability. Presented are possible pension schemes and pension plans .

Legal aspects of changes in the calculation of the marisa national saving banks of marisa branch interest calculation methods

Banks as legal entities must also pursue profits. And one source of bank income is the interest on loan loans that have been channeled to customers. And if the bank's revenue target is threatened because the value of the rupiah weakens or floats, the bank is basically allowed to raise lending rates as long as it does not exceed the limit set by the government in this case the Financial Services Authority ... But the facts that occur in this case are not in context changes or adjustments in loan interest rates with rupiah value. But the change in the method of calculating credit interest rates from the type of effective calculation becomes an annuity calculation. So that changes in the method of calculating interest rates should not be done without an agreement from both parties.The Marisa Branch National Pension Savings Bank has carried out defaults since the first credit agreement, changes to the second credit agreement, and arrived at a change in the third credit agreement for changes in interest rates. Thus, of course this has legal consequences that must be borne by the party who defaults, in this case the National Pension Savings Bank. Then the actions of the bank are included in the category of actions that cause losses to debtors due to default of creditors (BTPN), so that the legal consequences can be by canceling the agreement along with guri change or by fulfilling the agreement accompanied by compensation.

Second‐pillar pensions in Central and Eastern Europe: Payment constraints and exit options

AbstractDuring 1998–2007, a majority of Central and Eastern European (CEE) governments enacted laws obligating workers to save for retirement in privately managed individual accounts. The governments funded these accounts with a portion of public pension revenues, thus creating or increasing deficits in public systems. After the onset of the global financial and economic crisis (2008), most CEE governments reduced these funding diversions and scaled back the accounts. Now, a decade after the crisis, this article examines the benefits that the accounts are beginning to pay retiring workers. In general, these benefits are shown to be disadvantageous compared with public pensions. Some pay lump sums in lieu of regular monthly benefits, most fail to adjust pensions regularly for inflation, and some pay women less than men with equal account balances. In several countries, pensioners with individual accounts receive lower benefits than those without them. To enable retiring workers to avoid these disadvantages, several CEE governments have allowed them to refund their account balances and receive full public pensions. Yet while this strategy diffuses worker dissatisfaction, it also places strains on public pension finance. To assist second‐pillar account holders without weakening public pensions, governments should consider making private pension savings voluntary and financing these schemes independently of public pensions – i.e. by worker and employer contributions and, possibly, direct state support.

Economic nature of private pension funds

The desire to reach the level of European quality of life standards leads to an increase in the importance of the non-state pension system. Such a system is one of the alternative forms of development of social protection of the population, since it contributes both to the formation of additional pension protection and the ability to meet the investment needs of the real sector of the economy. That’s why the studies of the nature, specifics and principles of operation of non-state pension funds require updating in this aspect. The purpose of this work is a scientific and critical analysis of theoretical approaches to the interpretation of the essence of “non-state pension fund” (NSPF) concept, identifying the characteristics of funds as institutional investors. In the article the author used general scientific and special methods. They are: analysis, synthesis, induction, deduction, comparison, analogy, generalization. The methodological basis of the research is the systematic approach and the dialectical method of scientific knowledge. In the article the author clarifies the distinctive features of non-profit organizations, the main characteristics of an institutional unit and an institutional investor. A discussion on the dualistic nature of non-state pension funds is presented, which is determined both by the goals and objectives of the activities of the NPF and investment management, taking into account the effectiveness of using the tools of the market economy mechanism. The author's interpretation of the economic content of non-state pension funds is proposed. Conclusions. We believe that the role of NSPF, which they are intended to play in the life of citizens from the standpoint of their personal finance, undeservedly remains out of sight in academic circles. So, we propose to consider the economic content of an NSPF as a special organizational and legal form of a financial institution, designed to create an individually significant level of pension provision for citizens due to the redistribution of their income part between capable and disabled life cycle phases through the accumulation of pension savings, preserving and increasing their real value and the further implementation of retirement benefits on an individual basis. Unlike other ones, such an interpretation reveals the importance of the NSPF in planning citizens’ personal finances during their life cycle in order to preserve their social status in case of disability.

First Year of the Mandatory Pension Arrangement in Israel: Compliance with the Arrangement as an Indicator for Its Potential Implications for Labor Supply

Since 2008, Israel is gradually implementing a universal mandatory pension arrangement. The arrangement is found to have had a significant effect: about half of the employees that did not contribute to a pension arrangement in 2007, and continued working in 2008, began to save. In comparison, only one sixth of those who did not save in 2006 began saving in 2007. Nevertheless, a significant part of the target group did not start saving, and this avoidance is found to be negatively correlated with the predicted desirability of pension savings for the employee. Key factors affecting the avoidance are: earnings below the income-tax threshold, a non-working spouse and being employed by a small employer. Most of those who began saving did so at the minimum mandated contribution rates, and the discretionary tendency to contribute above the minimum rate, is positively correlated with estimated pension desirability. This conduct indicates that a significant segment of the target group views mandatory pensions as a burden, and tries to avoid it; a behavior consistent with ex-ante calculations that show that it is indeed not beneficial for them. Further analysis shows that full implementation of the arrangement may result in a significant negative effect on the employment of low-income populations. Additionally, based on the existing legislation, tax revenue loss due to mandatory pensions far exceeds the future savings in means-tested old-age allowances.

Employee Capital Plans in the Form of Insurance - Legal Aspects

Employee Capital Plans (PPK in Polish) are a part of a common system of voluntary pension savings schemes under the third pillar. They are assumed to cover all employees. However, each employee will be able to opt out of the participation in the program.The financial institutions eligible to offer Employee Capital Plans will include investment fund companies, general pension societies and employee pension societies as well as insurance companies. The opportunity to collect capital within the framework of Employee Capital Funds in the form of unit-linked life insurance will have an additional value for the participants, namely an insurance cover. Nevertheless, due to particular regulatory requirements and the difference between the insurance contract and other forms of Employee Capital Funds, it involves certain consequences. The present article is an attempt to address the essential issues concerning Employee Capital Funds offered in the form of insurance, regarding the insurance contract itself, such as insurance coverage or the nature of the contracts for the management and operation of Employee Capital Plans, as well as general matters, which exert an influence on the ECPs provided by insurance undertakings.