Sector Pension Research Articles

Changing the Pension Game: A Stakeholder Analysis of Systemic Barriers to Enhancing Sustainable Investing in the Dutch Private Pension Sector

Changing the Pension Game: A Stakeholder Analysis of Systemic Barriers to Enhancing Sustainable Investing in the Dutch Private Pension Sector

To Assess Factors Affecting Pension Subscribers’ Behavioral Intentions to Adopt Technology in The Pension Schemes

This study explores the behavioral intentions of pension subscribers in Ghana to adopt technology in their pension schemes, grounded in the Extended Unified Theory of Acceptance and Use of Technology (UTAUT2). A quantitative correlational design was used, analyzing data from 1,539 pension subscribers through Structural Equation Modeling (SEM) to understand the relationships between key factors. The findings reveal that performance expectancy and effort expectancy are significant predictors of technology adoption, underscoring the importance of perceived benefits and ease of use. Interestingly, social influence did not significantly impact adoption, suggesting that pension subscribers make independent decisions regarding technology use, uninfluenced by peers or social circles. Facilitating conditions and price value were crucial, indicating the need for supportive infrastructure and cost-effectiveness to encourage adoption. Contrary to expectations, hedonic motivation negatively influenced adoption intentions, emphasizing that functionality is prioritized over entertainment in the pension sector. Habit emerged as a strong predictor, showing that ingrained technology use positively affects adoption intentions. This research offers theoretical insights into technology adoption in the pension sector of a developing country and practical guidance for policymakers and pension service providers on fostering technology uptake among subscribers. By examining the specific socio-economic and cultural factors in Ghana, this study contributes a nuanced understanding of technology adoption drivers in the pension sector, providing empirical evidence from a less-explored context and highlighting unique influences in this domain.

International Regulation of Pensions in the EAEU: Problems and Development Prospects

The EAEU countries, having adopted the Agreement on Pension Security in 2019, took a big step forward to form the pension rights of migrants from the EAEU countries. However, existing difficulties caused by economic, demographic characteristics and institutional differences make us think about further steps to harmonize, unify and coordinate the pension systems of the EAEU countries.Aim. Consider themechanisms and the principles of international regulation of pensions in the EAEU countries and identify limitations and opportunities for its further improvement.Tasks. Explore global experience of cooperation in the pension sector; conduct an analysis of international regulation of pensions in the post-Soviet space and in the EAEU countries; identify difficulties in forming pension rights for migrants from EAEU countries; to find possible directions for the further development of pension legislation in the EAEU countries.Methods. The comparative analysis method was used to study national old-age pension systems; when determining the directions for the development of old-age pensions for migrants in the world, the historical and legal method was used.Results. The world experience of international regulation of pensions is considered.Differences were discovered in the formation of pension rights in the EAEU countries.The mechanisms of harmonization and coordination, as well as the territorial and proportional principles of legal regulation of old-age pensions are analyzed. The difficulties of forming pension rights for migrants from the EAEU countries are shown.Conclusions. The current approach to regulating pensions in the EAEU is not perfect, but it allows countries to remain independent in their national pension policies. Overcoming the existing difficulties in the formation and implementation of pension rights is possible with further harmonization, unification and coordination of the EAEU pension systems, which are complicated by the economic and demographic operating conditions and the lack of a unified strategy for the development of pensions in the EAEU. A fundamental issue for all countries is to determine the role of the state in the pension process.

Personalizing Communication and Segmentation with Random Forest Node Embedding

Communicating effectively with customers is a challenge, especially in a context requiring long-term planning such as the pension sector. Engaging individuals to obtain information on their expected pension benefits, by personalizing the pension providers’ email communication, is a first and crucial step. We describe a machine learning approach to model email newsletters to fit individual interests. The data for the analysis is collected from newsletters sent by a pension provider of the Netherlands and is divided into two parts (N = 2,228,000 participants in total of which 465,711 participants were part of the pilot study). Our algorithm calculates node embeddings over the nodes of a random forest, which are then used as features for the machine learning task. We illustrate the algorithm’s effectiveness in classification tasks using multiple benchmark data sets, and in a data mining task where segmentation rules can be inferred from the node embeddings. The proposed model demonstrates competitive performance with respect to other approaches based on random forests, achieving the best area under the curve (AUC) in the pension data set (0.948), while also identifying customer segments that can be used by marketing departments to better target their communication towards their customers.

Prime Minister Social Security Schemes - An Investigation into the Well-being of Rural Households

Abstract: Background: In order to establish a universal social security system for Indian citizens, especially the rural, marginalized, and vulnerable groups, the Indian government launched three ambitious social security schemes related to the insurance and pension sectors on May 9, 2015. Objective: This article is an attempt to investigate the effectiveness of these three social security schemes — Atal Pension Yojna, PM Jeevan Jyoti Beema Yojna, and PM Suraksha Beema Yojna, in improving the well-being of the poor households from rural regions and the people from the unorganized section of the country. Methodology: This investigation is entirely based on secondary sources, particularly the research publications on the selected topic and the government documents, reports, policy announcements, and news sources. Findings: Focusing on the identified schemes and their respective benefits, the article critically investigated their achievements along with the various challenges faced in effectively executing these schemes. Conclusion: The researcher highlighted an urgent need for a multi-faceted approach involving policy adjustments, awareness campaigns, and targeted efforts to address the identified challenges in the effective execution of the identified social security schemes.

Тенденции изменения архи- тектуры наиболее устойчивых многоуровневых пенсионных систем

The article presents a study of the unfunded (distributive) and funded (accumulative) components in multi-level pension systems in different countries around the world. The existing foreign practices of building pension systems are reviewed. It is proved that high sustainability indicators are achieved in those countries where a combination of the unfunded and funded components is used. The relevance of the topic is conditioned by the accrued problems in the pension sector, largely associated with the aging of the population and low birth rate. To conduct the study, the authors turned to countries with multi-tier, most stable pension systems, such as Denmark, the Netherlands, Australia, Sweden, Canada, New Zealand, Finland and Latvia. As a result, a number of features of the pension systems under consideration were identified. Within the state level of pension systems, the amount of payments depends on various criteria and conditions, the use of which is aimed at making payments more targeted. In countries where occupational pension schemes are developed, participation in them is mandatory for employees and employers. At the same time, voluntary pension schemes are used much less frequently by the population of the countries under study.

Фінансовий потенціал солідарної пенсійної системи України та шляхи його покращення

The solidarity pension system currently plays a major role in the functioning of the pension system of Ukraine. It is the first level of the domestic pension system that accounts for the main financial burden of pension payments to Ukrainian citizens. The aim of the scientific article is to assess the financial potential of the solidarity pension system of Ukraine, determine the impact of various factors on its condition and search for additional sources of financing pension payments for citizens of retirement age. The article pays special attention to the analysis of the challenges that society has received under martial law in the country, and their impact on the features of the financial provision of the pension sector. The results of the study show that the crisis in the national economy, as well as negative trends in the demographic sphere, significantly affected the financial condition of the main financial institution of the solidarity pension system – the Pension Fund of Ukraine (PFU). During the study period, the Pension Fund’s own financial resources are not enough to fulfill its obligations to Ukrainian pensioners, so there is a deficit of the PFU. It is determined that it is covered by the State Budget of Ukraine, as well as financial resources of international financial organizations. Attention is drawn to the fact that the minimum and average pensions of Ukrainian pensioners, although they tend to increase, are much lower than the incomes of citizens of retirement age in most European countries. In order to promote the diversification of sources of income for citizens of retirement age, to raise their level to European standards, it is necessary to introduce a mandatory accumulative pension system. It is noted that accumulative pension programs together with redistributive ones will contribute to strengthening the financial potential of the pension sector and increasing the incomes of Ukrainian pensioners.

Intergenerational sharing of unhedgeable inflation risk

We explore how members of a collective pension scheme can share inflation risks in the absence of suitable financial market instruments. Using intergenerational risk-sharing arrangements, risks can be allocated better across the scheme's participants than would be the case in a strictly individual- or cohort-based pension scheme, as these can only lay off risks via existing financial market instruments. Hence, intergenerational sharing of these risks enhances welfare. In view of the sizes of their funded pension sectors, this would be particularly beneficial for the Netherlands and the U.K.

A theoretical framework for standardized financial advisory services in pension management in Nigeria

Nigeria’s pension management sector is undergoing significant reforms aimed at improving the efficiency and reliability of pension services. Despite these efforts, inconsistencies and gaps in financial advisory services remain a challenge, impacting the effectiveness of pension management. This paper presents a theoretical framework for standardizing financial advisory services specifically within Nigeria's pension sector. The framework aims to address critical issues by proposing a structured approach to enhance service quality, ensure compliance with regulatory standards, and improve client outcomes. The framework encompasses several core components: a regulatory framework for oversight, certification and training requirements for advisors, and standardized advisory practices. The regulatory framework advocates for the establishment of a central regulatory body to enforce compliance, develop comprehensive guidelines, and oversee the implementation of best practices. It emphasizes the need for a robust certification process and continuous professional development for financial advisors to ensure high standards of service. Certification and training are integral to the framework, focusing on establishing uniform qualifications and training programs for advisors, as well as implementing continuous education requirements. Standardized advisory practices are designed to ensure consistency in financial planning, risk assessment, and reporting procedures, which are crucial for effective pension management. The framework also highlights the role of technology in enhancing service delivery, including digital tools for better client management and data analytics for improved compliance monitoring. By integrating these elements, the proposed model aims to enhance transparency, reduce errors, and foster greater trust among pension scheme members. The expected outcomes include improved quality and consistency in financial advisory services, greater adherence to regulatory standards, and enhanced client satisfaction and protection. This theoretical framework provides a foundation for policy development and implementation strategies, with the goal of creating a more reliable and effective pension management system in Nigeria.

A sustainable Catch-22: An assessment of sustainability in the Dutch pension sector

The relation between financial performance and sustainability in the global pension sector has been widely researched. Current research confirms that sustainable investments can have a positive influence on financial performance, but how that effect materializes is still debated. This study argues that the ambiguity concerning this positive impact is caused by a lack of integration of sustainability in organizations. This lack of integration causes the sustainability efforts to harm financial performance of the pension funds. Nevertheless, research shows that, if sustainability is integrated in the core logic of the organization, sustainability efforts do not yield lower returns. We assess the current level of sustainability integration in the Dutch pension fund sector using a multiple case study approach. Next, this study formulates the challenges related to sustainability integration in the sector, after which solutions to the specific problems are presented. Given the lack of integration, the barriers for increasing sustainability integration can be viewed as a Catch-22. First, a perceived separation is observed between the societal pressure to invest sustainably and constituents’ pressure to realize financial value. Second, pension funds are ill equipped for the complexity in sustainable investing and use a third party as investment manager, creating a dispersion of knowledge of sustainable investments and the responsibility to do so. To be able to solve the Catch-22 dilemma, greater collaboration, standardization and a sustainability vision are needed, resulting in a positive impact on sustainability and positive effects on financial return.

A systematic literature review on sustainability issues along the value chain in insurance companies and pension funds.

Sustainability is now a priority issue that governments, businesses and society in general must address in the short term. In their role as major global institutional investors and risk managers, insurance companies and pension funds are strategic players in building socio-economic and sustainable development. To gain a comprehensive understanding of the current state of action and research on environmental, social and governance(ESG) factors in the insurance and pension sectors, we conduct a systematic literature review. We rely on the PRISMA protocol and analyze 1731 academic publications available in the Web of Science database up to the year 2022 and refer to 23 studies outside of scientific research retrieved from the websites of key international and European organizations. To study the corpus of literature, we introduce a classification framework along the insurance value chain including external stakeholders. The main findings reveal that risk, underwriting and investment management are the most researched areas among the nine categories considered in our framework, while claims management and sales tend to be neglected. Regarding ESG factors, climate change, as part of the environmental factor, has received the most attention in the literature. After reviewing the literature, we summarize the main sustainability issues and potential related actions. Given the current nature of the sustainability challenges for the insurance sector, this literature review is relevant to academics and practitioners alike.

SOCIAL SECURITY REFORMS IN THE NEW UZBEKISTAN: PROBLEMS AND SUGGESTIONS

This article examines pension provision as University of Public Safety independent researcher, one of the most important and urgent functions of each state, and also defines the concept of pension and gives an idea of the importance of pension. Proposals were also developed on the reforms being carried out in Uzbekistan, including in the pension sector, on the procedure for increasing the size of pensions starting from January 2023.

Agency problems in the private pension system of Turkey: pension sector employee perspectives

PurposeThis study aims to examine how the governance structure of the private pension system of Turkey affects the extent of agency problems through a qualitative exploratory analysis of the pension sector employees’ perspectives.Design/methodology/approachThis study is based on qualitative exploratory research, which includes semi-structured interviews with 13 pension sector employees to investigate their perspectives on agency problems within Turkey’s private pension system. Data from interviews are analyzed by using the thematic content analysis method.FindingsThis study shows us that agency problems are prevalent in Turkey's private pension system, especially in the relations between pension company employees and participants. This study highlights four vulnerabilities of governance structure: the incapacity of governance structure to prevent pension companies as institutional agents from risky operations and transactions, the ability of local capital groups to use their controlling power for effecting fund management operations, the incapacity of the governance structure to prevent the employment of agents with inadequate qualifications, the lack of proper legal and regulatory framework for ensuring sufficient information disclosure to participants during contract-making and fund selection processes.Originality/valuePrevious research on the agency problems in the private pension schemes mostly investigated the issue from the viewpoint of participants. Thus, exploring agency problems from the agents’ point of view will be a contribution to the literature while illuminating the underlying structural problems within the system.

ЛУЧШИЕ ПРАКТИКИ ЦИФРОВИЗАЦИИ ПЕНСИОННЫХ ФОНДОВ В РОССИИ

Despite the traditional conservatism and high level of overregulation of the Russian pension system, the Pension Fund of Russia and non-state pension funds tend to digitalize the processes of servicing, informing and communicating with clients, data collection and analysis systems, as well as the proactive offer of public or non-state pension funds’ services. The article discusses the directions and examples of digitalization both in non-state pension funds and in the Pension Fund of Russia, as well as the results of these actions, expressed in the growth of customer satisfaction, reducing the number of errors and speeding up the time to provide services or answer customer questions. Despite the slow pace of implementation of changes in the pension sector, digitalization and transformation of processes are gradually bringing NPFs closer to the best customer service practices adopted in the Russian financial sector.

Efficiency evaluation of the pension funds: Evidence from India

The purpose of this article is to investigate the technical efficiency of Indian pension funds using data envelopment analysis (DEA) and to assess the reasons of inefficiency if any. This article analyzes the efficiency performance of all the pension funds available to Indian subscribers from the year 2015–2019 using radial measurers (BCC) of DEA based on secondary data collected from the annual reports of New Pension System Trust. Findings indicate that the average efficiency of Indian pension funds was 75.38% and this sector experienced overall stability in the average efficiency levels during the study period. Almost 40% of the pension funds operated efficiently in one or more years during the study period. The minimum slack was found in the input “expense ratio.” This confirms that risk associated with investments is the cause of inefficiency and not the expense ratio in the Indian pension sector. Tobit regression is applied to explore the main drivers of efficiency in the India pension funds. The study finds that fund size has positive association with the efficiency of the pension funds. Public sector funds were more efficient than the private sector funds. This study is first of its kind that has assessed the efficiency of Indian pension funds. The study brings into light the operating characteristics and efficiencies of the Indian pension funds for the period 2015–2019 and therefore holds important insights for policy makers, practitioners, and decision‐makers.

Spain in a Multidimensional Crisis: a Social Projection of Demographic Trends

The socio-economic situation in modern Spain is complex in many aspects, which makes it possible to characterize the current state of affairs as a multidimensional crisis. The Spanish case shows the interconnection of demographic processes with structurally complicated social phenomena. An overview of the demographic decline and birth rate drop is examined, as well as the plight of young Spaniards as a result of the COVID-19 coronavirus pandemic is given. The article also explores the problems of elder generation going through difficult times. On the basis of statistical data, the authors analyze the medium term prospects in the dynamics of population panorama, examine the impact of the migration factor, and show how the changing age structure and its attendant consequences pose an ever-wider range of issues for society, concerning both the younger generation and other age groups. From the perspective of demographic transformations, the article observes the situation in the pension sector, in light of the fact that Spain is one of the rapidly aging countries. The methodological approach used by the authors for a comprehensive analysis of demographic and socio-economic problems makes it possible to identify a range of interrelationships between the most important pillars of the Spanish social model.

Are defined contribution (DC) pension funds a stabilising factor in equity markets? Evidence from Chile, Italy, Mexico and Poland

We analyse the investment behaviour of the defined contribution (DC) pension fund sector in equity markets during and after the 2008–2009 financial crisis until the years 2014–2016 and here for Chile, Mexico, Poland, and Italy. We employ quarterly data on equity purchases and sales and on cash flow at the level of the whole pension sector. Applied are the following methods: analysis of average quarterly transactions; scatter plot analysis of the relation between average quarterly net purchases and quarterly changes in asset value, a correlation analysis of average quarterly transactions in the equity market and its index values, regression analysis of average quarterly transactions in the equity market and its index values. The results indicate that in Poland and Italy, pension funds behaved counter-cyclically, whereas in Chile there are some signs, although less statistically significant, of pro-cyclical behaviour. In the case of Mexico no conclusions could be drawn. The investment behaviour of pension funds might be influenced not only by their strategic decisions but also by other factors that are related to the institutional framework they operate within (e.g. a strategic asset allocation benchmark may induce pro-cyclicality).

A NEW UNDERSTANDING OF ECONOMIC CYCLES IN TERMS OF CHRONOLOGY

The COVID-19 pandemic has paralyzed large parts of the global economy, sharply restricting economic activities and increasing uncertainties. In response to the COVID-19 pandemic, governments across the world implemented lockdown policies to limit the spread of infections. In numerous cases, these policies were eventually extended. The unprecedented and simultaneous shock to global demand and supply have rendered millions unemployed. Governments in developed economies have rushed to provide some financial relief—unemployment benefits, grants and loans—to households and businesses most affected by the collapse of economic activities. Millions in both developed and developing countries, including Georgia, face the ominous prospect of falling back into poverty. Declining growth and rising poverty during the crisis and recovery period will likely increase income and wealth inequality, undermine social cohesion, and breed further discontent and instability around the world. Governments are grappling with measures to minimize the economic impacts of the pandemic. The durat ion and severity of the pandemic and its socioeconomic fallouts, will determine whether the world will be back to the pre-crisis normal economic activities or embrace a new normal in coming years. The pandemic has caused a rift in our cognition and put us in front of a new reality. How do we perceive the rest of the world in the face of a global threat?! Is there a fundamental reassessment of values?! Along with all other areas, recent months’ crisis has once again shown us how unclear economic science can be. No one could predict exactly how deep the crisis would be, how long the global lockdown would last, and what impact it could have on unemployment, inflation, demand and other economic indicators. So far, the only thing that almost all researchers and economists agree is that the cost of lockdowns in many countries is already very high. In the following study, we will discuss two main subjects on the example of Georgia: the problems of the capital markets and the pension fund development and the issue of foreign debt in post-Covid-19 Georgia. This topics are very actual given that the government of Georgia will start serving foreign debt from 2021, in the post-pandemic period. At the same time, the country is reforming the capital market and the pension sector.

Особливості функціонування національних пенсійних систем України та країн Східної Європи

An important component of social protection of the population of each country is the pension system, because its efficiency depends on the level of welfare of the population and the level of stability in society. The current pension system does not meet the requirements of today and therefore needs to be revised and reformed. The current demographic situation in Ukraine is characterized by a rapid increase in the number of people of retirement age, which leads to the inefficiency of the solidarity system of the pension fund, the increase in the demographic burden of the tax burden. The result is an insufficient level of pensions for many categories of pensioners. An important task at the present stage of socio-economic transformations in our country is to reform the pension system. After all, raising the level of social security of pensioners and ensuring the sustainable development of the state depend on this reform. Despite the fact that the government has taken a number of important steps in reforming the pension system, today we do not see progress in solving the most acute social problems. Poland’s experience in building its national pension system can be useful for Ukraine in the use of redistributive and funded pension programs, the activities of the main financial institutions of the pension sector, the mechanism for paying pension insurance contributions and the protection of pension assets. Its consideration would contribute to the development of a set of measures and their implementation at the current stage of pension reform in Ukraine.

Financial Convergence as a Mechanism for Modifying Sectors of the Global Financial Services Market

The relevance of the topic of financial convergence considered in the article is primarily dictated by the intensifying processes of globalization, which generate an increase in competition between participants in the financial market. An essential global trend in the development of the financial services industry has also become the process of increasing interpenetration by different participants of various sectors of the financial market into its other segments due to competition - financial convergence. The processes of financial convergence and the formation of new institutional forms of financial associations (financial conglomerates) in the world economy already have a significant impact on the real and financial sectors, public finance and other spheres of the economy. The article examines the prerequisites for the emergence and use of financial convergence by participants in the global financial services market to provide additional competitive advantages and stable development by modifying the established order in the sectors of the financial market. On the example of financial convergence between companies in the insurance and pension sectors, through the creation and participation in financial conglomerates, the main problems of the current state of the global financial market are considered. The article discusses practical ways to determine the presence of financial convergence, based on a modern approach using the methodology for calculating sigma convergence.