Private Pension Research Articles

The Role of Reverse Mortgages in Private Pension Income

The Role of Reverse Mortgages in Private Pension Income

Financial Performance of Private Pension Funds in Ghana: The Effect of Risk Management

Financial Performance of Private Pension Funds in Ghana: The Effect of Risk Management

The Importance of Reviewing the Pension Scheme in Albania Benefits and Challenges of Applying for Private Pensions in Albania

The Importance of Reviewing the Pension Scheme in Albania Benefits and Challenges of Applying for Private Pensions in Albania

Seguros de pessoas e previdência complementar aberta no Brasil: Um estudo sobre os diferenciais de mortalidade por nível educacional

ABSTRACT This study aims to verify whether the inequalities by education level found in the population as a whole are also confirmed among those who subscribed to personal insurance and/or open private pension plans in Brazil between 2012 and 2017. This study is a trailblazer in estimating mortality differentials by education level in populations with personal insurance and open private pensions in Brazil. The research contributes to the understanding of socioeconomic factors related to living conditions and, consequently, mortality. The results show that, even in a population that records lower mortality rates and higher life expectancies when compared to the Brazilian population as a whole, education level plays a major role as a protective factor. Population and death data were provided by 23 insurance groups. Through an agreement with the Ministry of Labor and Social Security, the Applied Mathematics Laboratory of the Federal University of Rio de Janeiro (LabMA/UFRJ) provided the list of insured people to this ministry, data was cross-referenced with government information and returned to the LabMA/UFRJ with identification of education level, when available, as well as indication of deceased, completing company records. Mortality tables were then drawn up for the insured population by education level. To obtain smoothed tables, Heligman and Pollard’s law was applied using a Bayesian approach, via Markov Chain Monte Carlo (MCMC) simulation. In the period from 2012 to 2017, among Brazilians who took advantage of personal insurance and open supplementary pensions, men with a high education level had, at the age of 60, a life expectancy of 5.6 and 6.6 years greater than those with a lower education level, in mortality and survival coverage, respectively. In the case of women, the comparison between the most educated and the least educated shows a difference of 2.7 years in mortality coverage and 5.4 years in survival coverage.

공적연금 수급과 자기효능감 및 삶의 만족도와의 상관관계 연구

Objective : Such research confirms the effect of public pension benefits on self-competence and life satisfaction of the elderly lt aims to enhance the importance of public pensions and provide implications for the government’s pension reform.
 Methods : After surveying the elderly aged 65 or older living in urban and rural areas, hypothesis testing was conducted through reliability analysis, descriptive statistics analysis,.group difference analysis, correlation analysis, and frequency analysis according to demographic characteristics. Results : There were significant differences in self-efficacy and life satisfaction depending on whether or not to receive public pensions, the type and amount of public pensions, and urban and rural areas. Elderly people receiving public pensions had higher self-efficacy and life satisfaction than those who did not receive them, and pensions with high benefits such as military tuition and faculty pensions had higher self-efficacy and life satisfaction than those who did not. In addition, residents in urban areas showed high self-efficacy and life satisfaction according to their residence in urban and rural areas. Conclusion : Korea is expected to enter an ultra-aged society in 2025, but the elderly poverty rate is the
 highest among OECD countries. In this reality, public pensions are one of the most effective means of maintaining the lives of the elderly. The government needs to establish policies to maintain the public pension at an appropriate level at a time when the finances of the national pension, civil service pension, private school pension, and military pension are inevitably depleted, and each individual should secure his or her retirement life by joining the public pension and further devise private pension and other income security measures.

Fair Terms of Social Cooperation among Equals

Rawlsian justice as fairness is neither fundamentally luck egalitarian nor relationally egalitarian. Rather, the most fundamental idea is that of society as a fair system of cooperation. Collective pensions provide a case study which illustrates the fruitfulness of conceiving justice in these latter terms. Those who have recently reached the age of majority do not now know how long they will live in retirement or how well any investments they try to save up for their retirement would fare. From the perspective of the beginning of their working lives, it is therefore rational for each to enter into an agreement with others, who also do not yet know their fates, that, if one turns out to be among the unfortunate whose private pension pots would not have yielded enough for one’s retirement, one will receive much more in retirement, whereas those whose pension pots would have overflowed their retirements will receive somewhat less. These terms are to each person’s expected advantage, which is made possible by a fair sharing of the fruits of social cooperation which arise through the efficiencies reaped by the pooling of the risk of outliving what one could save for one’s retirement on one’s own. It is rational for each to agree to share one another’s fates by pooling risks across both space and time, on fair terms of social cooperation for mutual advantage. Even when collective pensions arise from, and are proportional to, a baseline of unequal income, they can be defended on grounds of reciprocity involving regard for one another as equals.

THE EFFECT OF INCOME SECURITY IN OLD AGE ON HEALTH OUTCOMES: A COMPARISON BETWEEN CHINA AND THE US

Abstract This paper examines the social determinants of health, particularly the social, political, and economic context of socioeconomic status and health outcomes. Many studies on the political economy of health have highlighted the effects of welfare states on health and health inequalities, typically using welfare state regimes as proxies for social policies. Few research studies have described the association between frailty phenotype and financial wellbeing, however, particularly considering the three-legged stool of retirement income security (public pensions, private pensions, and personal savings/assets) across different welfare state regimes. This study investigates the effects of old-age income disparities on frailty among older adults in the United States and China. Specifically, this paper examines the associations between different sources of old-age income (public and private pensions, personal savings and assets, earnings, workplace subsidies, worker’s compensation, household subsidies, and unemployment insurance benefits) and the five-item frailty phenotype from the RAND Health and Retirement Study (HRS) and the China Health and Retirement Longitudinal Study (CHARLS). The findings reveal that health outcomes measured by the Fried’s frailty phenotype vary considerably by country and income type.

SOCIAL DETERMINANTS OF BRIDGE EMPLOYMENT: DO BIRTH COHORTS MATTER?

Abstract A growing number of retirees now engage in bridge employment, a term referring to their continued participation in the workforce post-retirement. The generation in South Korea born between 1945 and 1955, a period marked by leading industrialization and experiencing economic crises during their working age, exhibits unique socioeconomic characteristics distinct from later generations. Consequently, their retirement trajectories diverge significantly from those of later cohorts, including the Baby Boomer generation (born between 1956 and 1965). In this paper, we investigate whether social, demographic, psychological, and health factors are associated with bridge employment and whether this association differs across birth cohorts. Data were drawn from seven waves of the Korean Longitudinal Study of Aging, conducted between 2008 and 2020. We employ an integrative framework that considers socioeconomic status, health status, and psychological factors as the main variables to explain the odds of continuing to work after retirement. Retirement status includes three categories: employed, bridge, and total retirement. Results from a multinomial logit model reveal birth cohort differences in the relationship between social/psychological predictors and bridge employment. Additionally, higher educational attainment, a private pension, and poor mental health are associated with decisions regarding bridge employment for the industrialization generation, but not for Baby Boomers. Furthermore, females are more likely to participate in bridge employment than males for the industrialization generation, but not for Baby Boomers. Our findings contribute to the current literature on bridge employment by identifying the social determinants of bridge employment and highlighting the importance of cohort differences in bridge employment.

MIGRATION OVER THE LIFE COURSE AND LATER-LIFE DEPRESSION IN CONTEMPORARY CHINA

Abstract Migrating between rural and urban areas over the life course profoundly shapes the conditions of later life. In the Chinese context, living in urban areas with an urban Hukou is associated with socioeconomic advantage. This study is among the first attempt to investigate how migration into urban areas in China is related to these processes and the association with risk of depression in later life by focusing on the timing and the type of migration (rural-urban residential mobility and/or institutional transition of Hukou status) of migration. Using data from China Health and Retirement Longitudinal Study, we found strong associations between migration over the life course and risk of depression in later life in China. The timing and type of migration appears to play an important role. In-situ urbanisation is associated with lower depression scores in later life, and these effects are greater for in-situ urbanisation occurring in middle age compared with young adulthood. Forced urban-rural migration is associated with improved mental wellbeing. Formal social protection, particularly having a private pension, contributes substantially to the mental health advantage of social groups with an urban Hukou. Having an urban Hukou origin has an independent protective role in shaping mental wellbeing in later life in China, potentially partly due to the entitlement to a private pension attached to this status. When informal support has weakened in contemporary China, enhanced formal social protection in the form of adequate pensions should be put in place to mitigate structural inequalities associated with migration in old age.

CORRELATES OF RETIREMENT EXPECTATIONS AMONG BABY BOOMERS IN US AND SOUTH KOREA: APPLICATIONS OF TREE-BASED METHODS

Abstract 75 million US Baby Boomers are expected to retire by 2030. Retirement decisions are a result of a complex interplay of multiple psychosocial factors, including individual (demographics, health characteristics), family (marital status, spousal characteristics), work-related factors (job characteristics, workplace environment), and cultural contexts surrounding retirement. However, traditional regressions of retirement expectations limit the inclusion of a large set of factors and their interactions. This study employed decision trees and random forests to explore the salient psychosocial correlates of retirement expectations among Baby Boomers in two countries that differ in retirement norms and policies, US and South Korea. Sample included adults aged 52-65 from the 2016 wave of the Health and Retirement Study (n=1,192) and the Korean Longitudinal Study of Aging (n= 766). Expectation (probability) of working full-time for the next 5-10 years was modeled continuously (range: 0-100). Prediction models of expectations included 52 psychosocial factors relating to individual, family, and work characteristics. Mean expectations were higher in Koreans than US adults (71.4% vs. 36.7%). Age, self-reported probability of living to age 75, and work hours strongly predicted expectations in both US and Korean adults. While type of employment, Social Security or private pension benefits, and employment tenure were important predictors in US adults, flexible work arrangements were important in Koreans. Differences in features predicting retirement expectations between the US and Korean adults suggest opportunities for country-specific programs and policies aimed to promote workplace environment and pension benefits for successful retirement planning in the Baby Boom generation.

Auditoria operacional dos sistemas previdenciários: achados do Tribunal de Contas do Estado do Ceará

The national public administration is preceded by being monitored and supervised given the large resources that are allocated to the provision of services that society needs, leaving the courts of accounts to their control and measurement. With regard to the management programs of the private pension systems, the courts began to audit actuarial management and the accounting entries referring to long-term provisions for the payment of retirement and pension benefits. The Federal Court of Auditors presented irregularities and the Court of Auditors of the State of Ceará carried out operational audits related to the municipal regimes, and asked: what were the findings of the operational audit? The answer came through research of an interpretive nature with a qualitative approach and a case study in two municipalities of the six audited. It was concluded that: the municipal social security management in the State is recurrent in the irregularities and vices in the processes of acquisition of goods, products, or services; actuarial estimates are defective and incapable of assessing the sustainability capacity of the social security system, with indications of the absence of adherence tests for the workforce, actuarial cash flow incompatible with future execution, and inconstancy in results; absence of recording mathematical provisions in the balance sheets, originating from actuarial estimates; and absence of projections of actuarial liabilities in the tax statements. The audits studied pointed out recommendations and determinations to managers, which must be monitored by the body with the possibility of sanctioning and returning resources to public coffers.

Comparative Analysis of Malaysian and Indonesian Retirement Plan

In Malaysia, the Employee Provident Fund (EPF) was established Under the Employees Provident Fund Act 1991 as a social security organisation that offers members trustworthy and efficient savings management and it is open to both personnel. In contrast, the Private Pension Administrator (PPA) developed the Private Retirement Scheme (PRS), a retirement programme, to address retirees' insufficient resources for meeting their retirement expenses in light of rising living standards and longer life expectancies. Having to see the similar aspects between EPF and PRS in terms of creating savings and their importance towards securing a certain degree of comfort for retirees, the purpose of this study is to provide a thorough explanation of how these two retirement plans can benefit all Malaysian private employees. Similar to Malaysia, all private sector workers in Indonesia are also required to participate in retirement plan. Thus, the purpose of this study is to evaluate the similarities and differences between Malaysia's and Indonesia's retirement plan. This research employs a qualitative approach, by conducting library-based research on the relevant materials including, but not limited to statutory provisions, case laws, law textbooks, journal articles, newspapers, conference proceedings, and seminar papers. At the end of the discussion, the findings show that both countries have their own retirement plans and have the same goal which is to provide facilities to all private-sector workers.

ASSESSMENT OF KEY MARKETS FOR INSTITUTIONAL INVESTORS IN UKRAINE IN THE CONTEXT OF WAR

The article is devoted to the assessment of key markets for institutional investors in Ukraine in the context of Russia's full-scale invasion. The purpose of this study is to assess the institutional investor market in Ukraine during the war. To achieve this goal, it is necessary to solve the following tasks: to study the legal status of an institutional investor in Ukraine and its types, to assess changes in the institutional investor market after the start of a full-scale invasion, to identify key risks that exist in the market now, and to provide proposals on the need to improve state regulation of the institutional investor market to protect citizen investors in times of war. The methodological basis of the study was formed by general scientific methods of cognition: the dialectical method of cognition of the phenomena of the surrounding reality and the comparative legal method for establishing the legal status of an institutional investor, methods of logic (analysis, synthesis, induction, deduction, analogy), economic analysis, absolute and comparative advantages and statistical methods for analysing the market of institutional investors and making proposals, mathematical methods for calculating the volume of the market of institutional investors. In accordance with the systemic and structural approach, the institutional investor market was assessed by each of the structural elements of this market. The authors propose to consider an institutional investor as a financial intermediary that attracts and accumulates funds of individual investors (consumers of financial services) and carries out investment activities in the interests of individual investors aimed at financing socially and economically important sectors of the economy for the state and society. The authors pay special attention to the concept of responsible business conduct, pointing out that today, socially responsible business conduct is extremely important for the activities of an institutional investor, which includes "responsible attraction (accumulation) of funds" and "responsible spending (investment) of investors' funds". The study found that the main markets for institutional investors in Ukraine – banking, insurance and private pensions – showed stability and a slight increase in key indicators, which is very positive for Ukraine today. However, in the long term, there are a number of risks that should be taken into account by the government when formulating the state policy on the activities of institutional investors in these markets to protect the interests of citizen investors. The article provides suggestions on the main areas of improvement of the legislation on the activities of institutional investors to minimise the risks of citizen investors.

Gender differences in risk aversion: Evidence from private pension system in Türkiye

Evidence on gender differences in risk aversion is ambiguous. Using actual data of participants in the Individual Pension System in Türkiye, this study provides some evidence of the gender differences in investment decisions. The findings show that men are 17.6 % less likely to exhibit high-risk tendencies compared to women. Age demonstrates a positive association with risk-taking behavior. Also, married individuals have a 35 % higher chance of partaking in high-risk behavior. Nonetheless, this effect is 16 % lower for men than for women. Furthermore, college graduation raises the probability of high-risk behavior by 24 %, while income exhibits a negative impact, decreasing the likelihood of belonging to a high-risk group. When accounting for socioeconomic factors, the direct influence of gender on risk behavior diminishes. Notably, the presence of a higher proportion of women with college degrees and lower incomes contributes to risk-taking behavior independently of gender.

Funding Deficit Pension System: Structural Reforms that Necessarily Involve Partial Privatization of Pensions in Algeria

Purpose: The objective of this work is to highlight the various reform measures to be undertaken in order to ensure the sustainability of general pension schemes, in particular those aimed at promoting the partial capitalization of pensions in Algeria.
 
 Theoretical framework: Like most countries in the world, the Algerian pension system, which is managed on a PAYG basis, is currently facing major funding problems. Indeed, despite the measures taken to reduce its financial deficit, the latter has persisted since 2013 and has been estimated at almost 2.7 billion USD at the end of 2022. In fact, if measures to lay the foundations for sustained growth, which creates jobs (with improved inclusion in social security), are taken by the government, the system could regain its balance in the short and medium term. However, the problem of population ageing, which could occur in a few decades, reminds the urgent need for structural reforms.
 
 Design/Methodology/Approach: The design of the study is descriptive and analytical. Data for this study were collected from official Algerian sources, namely the NRF and the NOS, while content analysis was conducted by interpreting these data.
 
 Findings: The results of this study show that the Algerian public authorities have taken many measures in recent years to fill the deficit in the pension system, of which the repeal at the end of 2016 of the early and unconditional age pensions with possibility of maintaining the activity until the age of 65, the establishment of the NPRF in 2006, the introduction of additional revenue from customs duties applied to goods import operations from 2020, and the introduction of the NSSF in 2021. Nevertheless, this would in no way escape the insolvency of the pension scheme, hence the need for a structural reform that targets in addition to parametric changes, the introduction of a capitalization dose complementing the current pension system (supplementary pension) for its rebalancing in the short, medium and long term.
 
 Conclusion: the availability of substantial oil revenues may downplay the importance of the financial problems facing the Algerian pension system and their impact on budget stability (according to the NRF, the fund’s deficit stood at 376 billion DZD in 2022 and could reach 1.200 billion DZD in 2030), whereas this oil boom should be used to finance the transition by adopting a partially funded pension scheme. At the same time, this would require more efforts to boost the stock market in order to create an environment conducive to the establishment and development of this funded pillar.

Determinants of retirement of formal and informal sector workers in Mexico: the role of health and economic security.

We examine the socioeconomic and health drivers of retirement decisions and compare these determinants between formal and informal sector workers in Mexico. Using data from the Mexican Health and Aging Study 2012 and 2015, we estimate conditional probit models of retirement using sociodemographic, health, health care utilization, health insurance, private pensions, and social security systems covariates. The Institutional Review Board at the University of Southern California reviewed and approved the research (IRB # UP-15-00023). We find that the social security systems are an important determinant for retirement age for formal sector workers. The informal sector workers, who lack access to retirement benefits of the social security system, make retirement decisions mainly based on health and access to health insurance through social security. Despite the lack of access to social security benefits, informal sector workers do not respond strongly to socioeconomic factors in determining the timing of retirement. Strengthening access to better health care services could improve health, extend working lives, and promote healthy aging for workers in the informal sector.

Measuring the Performance of Private Pension Companies in Türkiye by Gray Relational Analysis Method

The private pension is a system designed to maintain an income level during passive periods by utilizing the income earned during active working years. It complements the mandatory retirement systems of the public sector and is based on a voluntary participation structure. Additionally, it serves as an investment and savings tool with the ability to provide long-term funds. The legislation for the private pension system was enacted in Türkiye in 2001, and it was implemented in 2003. In addition, a government contribution program was initiated to promote the system in 2013. An automatic enrollment system was introduced in 2017. The effectiveness and performance of individual pension companies play significant roles in the system. This study aims to measure the performance of individual pension companies operating in Türkiye using the gray relational analysis method, which is an effective measurement method, for the years 2016–2022. Subsequently, based on the measurement results, recommendations will be provided.

TO THE ISSUE OF AN EFFECTIVE MODEL OF PRIVATE PENSION PROVIDING IN THE POST-WAR DEVELOPMENT PARADIGM OF UKRAINE

The article examines the development of the private pension system in Ukraine during the post-war period. It is emphasized that before the onset of open aggression against our state, the pension system was characterized by significant imbalances. The Pension Fund of Ukraine constantly experienced a resource deficit, the size of pensions was one of the lowest in Europe, and the private pension system effectively did not perform its functions. On one hand, the operation of the solidarity state pension insurance system caused negative public resonance. On the other, a distrust of the activities of private pension funds was formed among ordinary citizens, hence the quantitative parameters of their activity were minimal. Evidently, during the period of martial law, key efforts were directed toward the development of the national security and defense sector. Currently, the maximum amount of financial resources, including those from external partners, are directed towards state defense. However, even under such conditions, ignoring problems in the pension system causes additional tension in society and can be used as a pretext for internal destabilization. Accordingly, the state must now direct efforts to form a strategic scenario for the modernization of the pension system. Clearly, in the post-war period, the development of the private pension system and the pension system as a whole will be one of the key issues. It is reasoned that the key trends in the development of private pension provision in Ukraine in the post-war period will be determined by various factors: migration processes, the volume of resources in households, the state of the domestic stock market, and the effectiveness of reforms in this area. The development of private pension providing will become a powerful impetus for the activation of investment processes, forming a financial basis for attracting long-term resources into the national economy. But all of these tasks require a comprehensive approach from the state, in which public interests will be key, and not the main interests of the leading financial and industrial groups.

Substantial difference between private and public pensions in Mexico 2018-2021

The objective of this article is to analyse the pensions of private sector workers, comparing them with those of the public sector. The work is framed under the deductive method, with a hermeneutic paradigm and with a quantitative approach. By 2018 in Mexico, of the total number of pensioners of the Mexican Social Security Institute (IMSS), 1.5 million received less than 5,000 pesos per month (69.8% of the IMSS and 46.7% of the national total); while the Institute of Security and Social Services of State Workers had 1.7% of its retirees in that segment; the IMSS-employer 0.4%; Federal Electricity Commission (CFE) and Petroleum Mexicans (PEMEX) 0%. This great inequality is further accentuated when the IMSS-insurer has 2,270 pensioners with incomes of 60-80 thousand pesos per month, while the CFE has 16,707 pensioners earning 60-200 thousand pesos (7.3 times more with 51 times fewer pensioners than the IMSS-insurer).

Formation of Pension Savings from Pension Insurers: Comparative Analysis and Efficiency Assessment

The subject of the research is the formation of pension savings on compulsory pension insurance by public and private pension insurers. The paper’s relevance comes from the lack of a conclusive solution in contemporary research to the dilemma of selecting between maintaining competition in the pension market and centralizing pension savings. The purpose of the research is to assess the effectiveness of the formation of pension savings for mandatory pension insurance in private pension funds in comparison with the Pension Fund of Russia, both from the point of view of the interests of insured persons and society as a whole. Research methods include comparative analysis and logical generalization, economic-mathematical and statistical methods, methods of financial mathematics. The information base of the study is data from the official websites of the Pension Fund of Russia, the Central Bank of Russia, the Federal State Statistics Service, the Deposit Insurance Agency, the Moscow Stock Exchange, VEB.RF, etc. The effectiveness of the formation of pension savings from public and private pension insurers was assessed by a number of criteria: from the standpoint of the interests of insured persons — these include the profitability of pension savings the reliability of the pension insurer, the possibility of choosing investment strategies; from the standpoint of the interests of society — the evaluation criterion is the use of pension savings as a long-term investment resource for economic development. As a result, it is concluded that the Pension Fund of Russia manages the pension savings of citizens more effectively than private pension funds. This raises the question of whether private pension funds should participate in compulsory pension insurance.