Private Pension Research Articles

НЕДЕРЖАВНЕ ПЕНСІЙНЕ ЗАБЕЗПЕЧЕННЯ ЯК ЧИННИК РОЗВИТКУ ЛЮДСЬКОГО ПОТЕНЦІАЛУ В УКРАЇНІ

Approaches to measuring social development in society are summarized, inter alia, through the Human Development Index and its three pillars (health, education and well-being). An analysis of the possible social impact of private pension provision on human development was carried out. The relationship between indicators covering GDP per person, gross fixed capital formation (investment), selected components of the Human Development Index, the sum of private pension assets was analyzed to identify common trends for some of the world’s largest non-state pension funds and, by comparison, for Ukraine. The correlation between private pension assets (PPA) and GDP per person in most developed countries has been high enough to represent a significant contribution of private pension assets to GDP. This impact can be achieved primarily through the investment of private pension assets, as evidenced by the high correlation between the level of PPA and investment figures. A clear time lag between the formation of PPA and investment, which lasts approximately one year, has been revealed. This may mean that pension funds will be allocated to selected investment projects in a year and thus improve the national economy. Similar figures in the case of Ukraine are weakly correlated, which may indicate that there is virtually no impact of still small private pension assets on economic life in general and its humanitarian component in particular. The dependence of average life expectancy at birth on GDP per person based on purchasing power parity (PPP) and the dependence of healthy life expectancy on government spending on health care was simulated. In Ukraine, the relevant indicators differ from the optimal ones and the participation of non-state pension funds in health care projects would be appropriate. Proposals are offered on the development of the private pension insurance, as well as increasing the level of the «long money» component in Ukraine's economy.

A historical study of the role sharing between public and private pensions

A historical study of the role sharing between public and private pensions

"Sustainability of private administrated pension funds in Romania "

At the level of the European Union, pensions from redistributive public systems are the main source of income for the elderly. A quarter of the European Union's population is made up of retirees, and their numbers have been steadily rising in recent years. In the last decade, in Romania, the issue of sustainability of the public pension system has become more and more acute and solutions have been sought for the transfer of responsibility for the payment of pensions from the state to the individual through privately administered pensions. In the field of social policy, the constant concern has been to ensure a decent income for the elderly. The paper aims to identify the financial sustainability of private pension systems, the investment strategies used by these funds, the structure of investment portfolios, the profitability achieved by fund managers. The research method used will be statistical-mathematical. The research data are processed based on the reports and data of the Financial Supervisory Authority (ASF), the Private Pension System Supervisory Commission (CSSPP), the Romanian Association of Private Administrative Pensions (APAPR), the National Institute of Statistics (INS) and those from EUROSTAT. The results of this research consist in highlighting the problems of the current private pension management system and the economic developments of the Romanian economy in the coming decades

THE STATE OF THE PENSION INSURANCE ACCOUNTING PROVISION ENVIRONMENT

The subject of the article is theoretical and applied principles of accounting support of pension provision in Ukraine. The purpose of the publication is the formation of theoretical and methodological and applied aspects of accounting and tax support of pensions in Ukraine. In the course of the research such methods were used as: systematization and generalization, retrospective analysis of the state of pension provision. The main aspects of providing pension insurance in Ukraine are considered. The issue of essential characteristics and structure of the pension system in accordance with the Law of Ukraine "On Compulsory State Pension Insurance" was updated. The main problems of the current state of pension provision have been identified, namely: imbalance of the Pension Fund budget revenues with its expenditures, which leads to a constant deficit of funds in it; a sharp increase, as a result of the 2011 pension reform, retirement age and length of service; rapid growth of the ratio between citizens of working and working age; a fairly high percentage of payment of cash contributions to the pension fund; low level of pension benefits, sometimes less than the subsistence level; underdeveloped system of private pension provision and ignorance of Ukrainian citizens with the pension system. The main aspects of pension reform in Ukraine are presented and the main principles that will help to improve the situation are highlighted. These include, in particular, such as: recalculation of pensions using modern indicators of the salary base; strengthening the requirements for insurance experience. The research of scientific works revealed the types of private pension funds, the expediency and efficiency of their activities, systematized the benefits of creating enterprises to ensure future costs and payments. The article examines the peculiarities of creating preferential pensions at the enterprise, outlines the main aspects of accounting for pensions, taxation of contributions to private pension funds, summarizes the impact of costs incurred in creating the provision of pension benefits for income tax.

Consideration on Japanese IRA-suggestions from private pensions in other countries

Consideration on Japanese IRA-suggestions from private pensions in other countries

Perspectives for reform of public and private pensions based on their historical considerations

Perspectives for reform of public and private pensions based on their historical considerations

Private pensions funds in North Macedonia and Russia

The article focuses on the reform of the pension systems in North Macedonia and Russia, which resulted in switch from one-pillar to multi-pillar pension systems, and current legal and institutional architecture in both legal systems with emphasis on private pension funds which are widely recognized as the core drivers for the improvement of the living standards of retirees. The article starts with the general overview of Macedonian and Russian pension systems which provides the necessary background for understanding of the legal regime of private pension funds. The general overview of the pension systems is followed by the detailed analysis of the legal status of private pension funds in both countries, with more attention being paid to the experience of North Macedonia where private pension funds play a more important role in the pension system. In Russia private pension funds have shown their positive effect, but their coverage in general is still moderate. The overview of general rules of taxation of contributions to private pension funds and pensions concludes the article. The comparative research allowed to make the conclusion that both countries have made different progress in moving to a three-pillar pension system especially from the viewpoint of the established legal and institutional framework, and the establishment and operation of the private funds, both mandatory and voluntary.

COVID-19 Private Pension Withdrawals and Unemployment Tenures

COVID-19 Private Pension Withdrawals and Unemployment Tenures

Особливості формування системи захисту пенсійних активів накопичувальних пенсійних програм

European countries widely use multi-level pension systems, and Ukraine has also gone the way of building a three-level pension model. The use of funded pension programs is associated with the need to create a system of preservation and protection of their pension assets from the manifestations of various risks. The article aims to reveal the peculiarities of the formation of the system of protection of pension assets of accumulative pension programs and to determine the state's role in improving its reliability and efficiency. In Ukraine, the state has a key role in shaping the protection system of pension assets of funded pension insurance. However, the level of protection of pension assets of participants in funded pension programs in the private pension system is insufficient. The main measures for the protection and preservation of pension assets were analyzed. Particular attention is paid to the characteristics of guarantees for the protection of pension assets of the second and third levels of the pension system of Ukraine by the state and its financial institutions. These should include: state control over the preservation and use of pension assets, investment policy to attract financial resources of funded pension insurance in the stock market, promote the development and expansion of the national stock market, disclose information on changes in the value of pension assets and reporting on them, regulation of remuneration of financial institutions servicing pension assets. Issues related to the tax regulation of pension savings were analyzed. Among the options for tax benefits is proposed one that provides that pension benefits are not taxable. The investment income of participants in funded pension programs and their contributions are also exempt from taxation. A set of measures for forming a reliable and effective system of protection of pension assets of funded pension programs was proposed.

Algorithm based on Decision Trees for the optimal choice of the Peruvian Pension System

This article details how fundamental pension insurance is, taking into account that there are two systems: The Private Pension System (AFP), in which the worker receives what he has received throughout the period he has worked, such as a personal savings account and the National Pension Insurance (ONP), which is a public body that allocates the money contributed by workers (common fund) and is disbursed as a concept of pensions to retirees. Taking into account the problem of the lack of information on Pension Insurance provided by both public and private entities, it was decided to build an algorithm for adequate information and thus achieve relevant decision-making for each worker who accesses the payroll forthe first time or for those who decide to start independently,

Comparing the Performance and Management Style of Retirement Pension Funds before and after the Private Pension Activation Plan

We analyzed and compared the performance and management style of retirement pension funds before and after the private pension activation plan (PPAP). First, we found that retirement-pension funds showed better performance than public funds before the PPAP. However, after the PPAP, the retirement-pension market size increased and the difference in performance disappeared. Second, we found that the difference between top and bottom performance group in the retirement pension fund becomes more significant after the PPAP. Third, we found that various investment strategies such as small-medium size stock investment and sector investment are offered in the retirement-pension fund only to result in the inferior performance. Finally, when we compared the management style, the retirement-pension funds showed a smaller value factor compared to public funds for the period after the PPAP. Therefore, we argue that the fund selection has become a more significant factor in determining the retirement fund performance after the PPAP. However, considering that the average retirement-pension holders’ financial knowledge is rather low, the expansion of fund choices may adversely affect the pension holder’s performance. Therefore, a retirement-pension provider’s role as fund selection authority has become more critical, and it is necessary to establish an institutional device that can manage, supervise, and monitor their activities.

The Performance of Portfolio Management Companies in Terms of Pension Funds: Evidence from Turkey

Private Pension System (PPS) which has been in practice for many countries began its operations on 27 October 2003 in Turkey, and Pension Fund Companies (PFCs), Portfolio Management Companies (PMCs), and government authorities are three main actors in the system. Evaluating the performance of pension funds is vital to the benefit of all participants. In addition, the performance of the relevant funds should be periodically reviewed to use financial resources effectively and efficiently. In this respect, private pension funds are of vital importance, especially for countries with a savings deficit such as Turkey. When the finance literature is examined, it is seen that there are many studies to measure fund performance. However, examining the performance of funds alone is not an adequate control method for the IPS. In addition to the performance of the funds, the performance of those who manage the funds is also important for economic development. In this context, the aim of the study is to evaluate the performance of the PMC of pension funds with Sharpe Ratio and Treynor Index. 149 funds managed by 12 PMCs were included in the analysis for the period between January 2013 and December 2016. According to the findings, TEB PMC has the highest average Sharpe ratio (0.0768) and QNB FİNANS PMC has the lowest highest average Sharpe ratio (0.0225). According to the Treynor index, the highest average score (0.0524) belongs to GARANTİ PMC while the lowest score belongs to YAPI KREDİ PMC with (0.0048).

VENTURE CAPITAL AND ITS IMPACT ON INNOVATIVE AND ECONOMIC GROWTH OF COUNTRIES

The article considers the essence of economic and innovative development as well as innovative entrepreneurship. An analysis of venture capital volumes and GDP indicators for selected countries is conducted. The main relationships and factors influencing venture capital processes, such as risk and information asymmetry, are highlighted. The role of venture capital in the innovative and economic development of countries, the practical content of some of the above theoretical provisions are studied. The gap in venture capital issues between countries is also shown. Thus, the gap between the level of development of venture business in the United States and European countries, as well as Japan and Israel, remains significant. The question remains as to why the United States is a leader in the venture capital business. One of the reasons is a developed capital market with the appropriate infrastructure and its main participants. Another reason is less developed (and / or different) social security systems, which forces people to look for other ways to ensure old age through the mechanisms of the private pension system. Further directions of research on building a model of possible options for innovative development based on the revival of venture capital and the development of innovative entrepreneurship for developing countries are identified. The article notes the stimulating effect of venture capital in the country's innovation and economic growth, as well as the unanimity of conditions and factors influencing the process of venture investment. This also requires further study, as the question of the gap between economic growth, innovation and venture capital for individual countries remains open. Additionally, it is not substanstially analysed, whether the present central bank policy has influenced investors decicions and when this might change.

A Lavagem de Dinheiro e o Financiamento do Terrorismo no Mercado de Seguros, Capitalização e Previdência Privada Aberta

O presente artigo trata sobre o surgimento da criminalização da lavagem de dinheiro e do financiamento do terrorismo, bem como sobre as convenções e órgãos que impulsionam a prevenção desses crimes. Trata, ainda, da atual criminalidade transnacional, com a consequente evolução das formas de se praticar os delitos em comento, da necessidade de rápida e constante adaptação legislativa e da criação de órgãos especializados para o seu combate. Discorre sobre o recente interesse dos criminosos no mercado de seguros, capitalização e previdência privada aberta, assim como analisa a Circular SUSEP nº 612/2020. A metodologia utilizada foi a pesquisa histórica, abordando a evolução das convenções e legislações sobre o tema. Objetiva-se responder as seguintes questões: Como ocorreu a evolução das leis a fim de que se adaptassem e prevenissem efetivamente o crime? Quais órgãos internacionais e nacionais são responsáveis por essa prevenção? Como atuam os terroristas, no mercado segurador, e o que dispõe o programa de prevenção à lavagem de dinheiro e ao combate ao financiamento do terrorismo? Conclui-se que a união de países é essencial para o combate ao terrorismo, bem como a evolução da legislação sobre o tema, de modo a abarcar todas as fases do processo, abrangendo, inclusive, a captação de recursos. Podemos concluir, igualmente, que a Circular SUSEP nº 612/2020 está em consonância com a Política de Prevenção à Lavagem de Dinheiro e ao Financiamento do Terrorismo, pois alinha-se ao modelo de abordagem baseado no risco.

Impactos de la reforma previsional en el crecimiento inclusivo dela República Dominicana

El trabajo estudia los efectos que tienen los esquemas de capitalización individual para pensiones en el crecimiento inclusivo, para ello se analiza la reforma introducida en 2001 en la República Dominicana, una de las últimas en sumarse a la ola de reformas al estilo del “modelo chileno” iniciada en los ochenta. Así, se encuentra que la introducción del sistema de ahorro individual ha llevado a que la República Dominicana crezca más de un punto porcentual adicional cada año entre el período 2003-2019 en sus estimado medio lo que implica que por cada punto de crecimiento que ha experimentado el PIB dominicano, 22% se explica por el funcionamiento del sistema privado de pensiones. Se ha podido hallar también que el impacto anual sobre la relación ahorro-inversión ha sido de 0.89% anual, lo que ha derivado en que el índice de desarrollo financiero del país mejore a ritmo de 0.21% adicional por año y que el diferencial de tasas de interés se haya reducido en un promedio de 3.15% durante el período de estudio. Como parte del círculo virtuoso propiciado por el sistema privado de pensiones desde su introducción, gracias al funcionamiento del sistema privado de pensiones, hoy la tasa de pobreza es casi 4 puntos más baja respecto a un escenario en el que no se hubiese introducido esta reforma.

On the investment strategies in occupational pension plans

Demographic changes increase the necessity to base the pension system more and more on the second and the third pillars, namely the occupational and private pension plans; this paper deals with Target Date Funds (TDFs), which are a typical investment opportunity for occupational pension planners. TDFs are usually identified with a decreasing fraction of wealth invested in equity (a so-called glide path) as retirement comes closer, i.e. wealth is invested more riskily the younger the saver is. We investigate whether this is actually optimal in the presence of non-tradable income risk in a stochastic volatility environment. The retirement planning procedure is formulated as a stochastic optimization problem. We find it is the (random) contributions that induce the optimal path exhibiting a glide path structure, both in the constant and stochastic volatility environment. Moreover, the initial wealth and the initial contribution made to a retirement account strongly influence the fraction of wealth invested in risky assets. The risk aversion of an individual mainly determines the shape of the glide path, while the ratio of the wealth and income influences the steepness of the glide path.

Private pension funds: pragmatics and problems of activity in Ukraine

Introduction. Nowadays, the pension system in Ukraine is being transformed, which necessitates analytical research on the activities of private pension funds, namely, open-ended, identifying problems of their activities and finding ways for further effective development.Methods. In the article author uses methods of analysis and synthesis, graphic research methods, economic and statistical methods for information collection and processing, in particular, sample surveys, groupings, statistical comparisons, trend analysis - in the process of evaluating the activities of private pension funds in Ukraine, and the method of logical generalization in formulating conclusions.Results. Author did an analytical assessment of indicators that characterize both the quantitative side of the activities of private pension funds in Ukraine and the qualitative side of their effectiveness in the domestic financial market. Attention is focused on the peculiarities of the structure of the portfolio of open non-state pension funds and it is concluded that the biggest quote (about 95%) in it belongs to cash on bank deposits and government securities. Author analyzed the indicators of profitability of the five most profitable open pension funds of Ukraine (according to the results of 2020) and their comparative characteristics, both in terms of the level of profitability and with the inflation rate. The tendency to decrease the profitability of investment portfolios during the analyzed period is noted. It was found that the structure of the portfolio of the most profitable open private pension funds is practically the same as the general structure of all pension funds of Ukraine. Discussion. Author proposed to form the portfolio structure of a private pension fund based on the characteristics of its depositors, and for the part of the portfolio with the largest investment horizon include risky instruments: direct investment funds, venture funds and real estate funds. This will allow using part of the pension savings as a long-term investment resource for the modernization of the domestic economy.Prospects for further research necessitate consideration of the main methods used in the process of selecting an asset management company, the administrator of a private pension fund, and assess the effectiveness of its asset management of private pension funds.

MODERNIZING PENSION FUND CONTRIBUTION

Purpose: The purpose of this research is to develop a pension model which uses mobile phone technology to facilitate contribution towards the user's pension scheme. Methodology: The entry age pension funding method, and annuity present value & accumulations methods are used to come up with the contribution rate and the actuarial liability for the model. Findings: The model developed is independent of salary or any other income and only takes into consideration those legally registered to use mobile phone. Being a private pension plan, and the fact that it involves the member directly via and individual mobile phone subscription, wider coverage is anticipated. Unique contribution to theory, practice and policy: Contribution towards pension scheme by use of mobile phone technology in which contribution (which is fixed and independent of salary) is achieved by how frequently, the credit is loaded and used by the subscriber.

How Do Defaults Affect Behavior of Individual Retirement: Evidence from Ankara

Turkey is one of the few countries that has introduced national-level automatic enrollment in private pension systems to encourage people to save for retirement. Although the policy's effectiveness is debatable, it is fair to conclude that it has accelerated enrolment in individual pension plans. This is due to the fact that defaults have a significant impact on saving behavior. However, there are few empirical data that explain how defaults operate. To find out, we created a survey for Ankara public employees in order to explore possible demographic, financial, and behavioral constructs for automatic enrollment choices. Gender, marital status, and the number of dependents in the family all have an impact on the decisions. Other noteworthy findings concern behavioral constructs: Ankara public employees who find individual pension systems complex are more likely to opt out, and the public authority endorsement effect greatly reduces the risk of quitting the system. These findings show that there is a need for more educational and informational efforts on the pension system, and that policymakers have a significant amount of responsibility as a result of this strategy.

Retail financial markets as a driver for the development of financial sector

The paper analyzes the influence of the dynamics of retail financial markets on the development of financial sector on the annual data for 39 countries, including developed and developing economies, for the period 1990—2018. To assess the general dynamics of retail markets development, a composite indicator was built. This indicator is included in the models for corporate lending market, stock market and non-life insurance market. The results show that, on the one hand, the development of retail markets (households credit market, life insurance market and private pension funds) stimulates the development of non-retail financial markets (corporate lending market, stock market and non-life insurance market) due to the expansion of their resources. On the other hand, overheating of retail credit market has a negative impact on the stability of the banking sector and subsequently leads to a reduction in the size of the corporate credit market, and the excessively rapid growth of life insurance market may hinder the development of its other segments.