Public Pension Research Articles

Public Pension Funds in EU Member States: Their Comparability and Tax Treatment under the Free Movement of Capital (Keva and Others (Case C-39/23))

This note examines the tax treatment of public pension funds within the European Union in the context of the free movement of capital as contained in article 63 of the Treaty on the Functioning of the European Union (TFEU). The note analyses recent developments regarding the imposition, by EU Member States, of withholding taxes on dividends received by non-resident public pension funds in circumstances in which resident public pension funds are exempt. In doing so, the article critiques the actual comparability of these situations. It underscores the limitations of article 65(1)(a) of the TFEU, which theoretically permits tax differentiation based on residence. Furthermore, the article highlights the crucial role of the Court of Justice of the European Union in ensuring that Member States comply with EU law, particularly in order to maintain a genuine internal market for cross-border investments.

Cross‐domain policy feedback effects on mass publics

AbstractScholars have extensively explored policy feedback effects on mass publics. However, research exploring how one policy's implementation affects public preferences for another remains limited. This study proposes a novel cross‐domain policy feedback framework, emphasizing functional and normative interdependence as two mechanisms yielding cross‐domain resource and interpretive effects. We use multiple sets of nationally representative survey data and archival records from China, a context deeply rooted in filial piety culture. We employ a fuzzy regression discontinuity design and multilevel regressions to explore the effects of the one‐child policy on public preferences for old‐age support. The findings indicate that individuals subjected to more stringent enforcement exhibit increased support for the government assuming the responsibility for old‐age support. These changes largely stem from the reduction in their actual and desired number of children. The findings have significant implications for mass feedback research and reform efforts regarding population planning and public pension systems.

Aging With Emerging Social Welfare and Disappearing Filial Piety: Chinese Migrant Workers' Pathways Toward Financial Retirement Planning.

This study examines the pathways and mechanisms linking Chinese migrant workers' migration experiences and their financial retirement planning. Using a mixed-methods approach with 1083 surveys and 32 interviews, this study finds that having a good financial status and social support system and maintaining a hopeful attitude toward retirement are direct pathways toward good financial retirement planning. Good health and hope for retirement are further enhanced by a good financial status and social support. Conversely, poor health and negative employment experiences are linked to poor financial retirement planning. The qualitative findings provide a contextual understanding of the pathways identified in the quantitative analyses. Migrant workers often face a dilemma between self-reliance for retirement and relying on filial piety. These findings apply not only to Chinese migrant workers but also to all migrant workers with limited access to healthcare and public pensions for retirement.

Forecasting Population in an Uncertain World: Approaches, New Uses, and Troubling Limitations

AbstractThe long human lifespan enables long run forecasts of population size and age distribution. New methods include biodemographic research on upper limits to life expectancy and incorporation of early experiences affecting later life mortality such as smoking, obesity, and childhood health shocks. Some fertility forecasts incorporate education and quantum‐tempo insights. Statistical time series and Bayesian methods generate probabilistic forecasts. Yet recent decades have brought surprising changes in the economy, natural environment, and vital rates. In these changing circumstances we need new methods and the increasing use of probabilistic models and Bayesian methods incorporating outside information. The increasing use of microsimulation combined with aggregate forecasting methods is a very promising development enabling more detailed and heterogeneous forecasts. Some new uses of stochastic forecasts are interesting in themselves. Probabilistic mortality forecasts are used in finance and insurance, and a new Longevity Swap industry has been built on them. Random sample paths used to generate stochastic population forecasts can stress‐test public pension designs for fiscal stability and intergenerational equity. Population forecasting a few decades ago was a dull backwater of demographic research, but now it is increasingly important and is full of intellectual and technical challenges.

Public pensions and family dynamics: Eldercare, child investment, and son preference in rural China

Public pensions and family dynamics: Eldercare, child investment, and son preference in rural China

Financial education as a complement to public pensions: the case of naive individuals

Financial education as a complement to public pensions: the case of naive individuals

Retirement consumption puzzle in Japan: Insights from pension and senior worker employment policy changes

Previous studies in Japan have examined the retirement consumption puzzle (RCP) when mandatory retirement was prevalent. However, the retirement landscape has significantly evolved due to rising public pension ages and enhanced policies promoting employment among senior workers. This study explores household consumption behavior as a result of these recent shifts, particularly focusing on the increasingly common practice of partial retirement. We investigate household consumption during retirement, considering partial retirement enabled by policies allowing continued part-time work or self-employment beyond the mandatory retirement age, and address endogeneity issues between retirement and consumption. Our findings reveal that non-durable and food expenditures increase during partial retirement, driven by liquidity effects from substantial retirement lump-sum payments. These results challenge the traditional understanding of consumption patterns in an aging society, highlighting the impact of changes in work environments.

A landscape analysis of investors in the global breast milk substitute industry to target for advocacy.

The International Code of Marketing of Breast-milk Substitutes and subsequent resolutions (the Code) was adopted to address increases in mortality and morbidity resulting from the practices of the breast-milk substitute (BMS) industry. The lack of success in ensuring company compliance with the Code has prompted advocates to consider engaging with investors to shape the governance of BMS companies. To support these efforts, this paper aimed to identify prominent investors in the global BMS industry and explore their Code-related policies and practices. Using multiple methods and data sources, we developed a novel approach to identify and rank investors in the world's leading publicly listed BMS companies. We also examined the policies and voting behaviour of a sample of investors using publicly accessible materials from 2020 to 2022. We found that a small number of large investors, led by BlackRock and Vanguard, hold a substantial share in the global BMS industry. Of the top-10 ranked investors, only Norway's Government Pension Fund (NBIM) reported policy information relating specifically to BMS marketing. Most of these large investors also opposed the sample of public health-related shareholder proposals analysed. In addition, we identified several investors that have reported engaging with BMS companies on Code-related issues, including NBIM, Pictet, and UBS, along with several potential investor targets for future advocacy efforts, including some North American public pension funds. The inclusion of Code-related issues as part of broader policies, disclosures and regulations related to environmental, social and governance oriented investment warrants increased attention.

Social security and retirement around the world: lessons from a long-term collaboration

Abstract Declining labor force participation of older men throughout the 20th century and recent increases in participation have generated substantial interest in understanding the effect of public pensions on retirement. The National Bureau of Economic Research's International Social Security (ISS) Project, a long-term collaboration among researchers in a dozen developed countries, has explored this and related questions. The project employs a harmonized approach to conduct within-country analyses that are combined for meaningful cross-country comparisons. The key lesson is that the choices of policy makers affect the incentive to work at older ages and these incentives have important effects on retirement behavior.

Regressivity in public pension systems: The case of Peru

We study the role of income-mortality differentials and pension eligibility conditions on the level of regressivity and progressivity of Peru’s public pension system, using administrative records from 1999 to 2018 to do so. We consider the joint effect of insufficient contributions, by which the poorest contribute to the pension system but ultimately do not qualify for pensions because of insufficient contributions, and differing mortality by socioeconomic status in contributing to regressivity of the system. We find that the impact of insufficient contributions is more important than the impact of higher mortality in making the system regressive.

The impact of pensions on the income gap among the elderly: the case of Taiwan’s National Pension

ABSTRACT In most countries, first-pillar public pension systems provide comprehensive coverage for all citizens. By contrast, Taiwan’s unique National Pension (NP) is a compulsory, defined-benefit pension insurance that covers citizens excluded from occupation-based social insurance. As such, the NP inevitably includes disadvantaged citizens in its coverage. Using NP administrative data to link labour insurance, social welfare allowance, and income tax, we find that the NP narrows the pension benefit gap between the disadvantaged and the non-disadvantaged. The narrowing effect is stronger for the younger than for the older generation. Furthermore, the NP enhances pension benefits for women more than for men, thereby narrowing the difference in pension benefits between the sexes. As expected, the NP is more important for low-income citizens than for their wealthy counterparts.

Ways of developing the pension system of Ukraine through the study of some European countries’ experience

This article presents a comparative analysis and characteristics of the pension insurance systems of foreign countries, namely Germany, Sweden, Estonia, Poland, France with the aim of implementing their effective and noteworthy experience in Ukraine. The key indicators of the characteristics of the pension systems of these countries and Ukraine (amount of insurance contributions to the public pension fund; retirement age; insurance period; the ratio of the average pension to the average wage) have been studied and analyzed. Having examined these indicators, the authors came to the conclusion that the general trend in most countries of the world is that they guarantee only a minimum pension, which is caused by the increase in the share of pensioners in society. To solve the demographic problems affecting pension provision, the most countries increase the retirement age and provide financial incentives to stimulate citizens to work after the retirement age. To increase the pension, there are pension accumulation tools at the expense of the employer or at the expense of one’s own funds. Following the example of foreign countries, the directions for improving the pension insurance system of Ukraine were allocated.

Texas Public Pensions: A Common Pool Resource Perspective

Public employee pension management is the nexus of public and private financial management systems that are significant long-term components of public finance. The idea that these pension systems can look quite similar yet perform in quite different and conflicting ways is significant when designing policy; system design templates are not successful in complex systems. Even pension systems within the same city can have radically different states of actuarial health based upon small differences in the rules (or adherence to the rules) establishing them. To better understand such systems, viewing them from a common pool resource perspective is useful. Elinor Ostrom (1990) , in her seminal book Governing the Commons, provides eight principles that facilitate governing common pool resources. The general theme running through Ostrom's principles is the need to facilitate the building and channeling of social capital. By facilitating constructive collective choice, the goal of effective, sustainable collective action is achievable. In this study, we examine the political, cultural, and institutional structures that are in place in the pension systems of Dallas and Houston, Texas. We examine the pensions’ governance practices to determine which appear to violate Ostrom's ideal institutional arrangements and their impact on the pensions’ long-term sustainability. Pertinent survey information from pension beneficiaries conducted as part of this research are provided

Unmet community care needs among older adults in China: an observational study on influencing factors

BackgroundWith the rapidly aging population in China, there is an urgent need to understand and address the community care needs of older adults. This study sought to examine these unmet community care needs of older adults in China and the factors influencing them, with the goal of providing essential groundwork for the development of community care health policies.MethodsThis study used data from the 2018 China Longitudinal Healthy Longevity Survey of 8,870 adults aged 65 years and older. Logistic regression analysis was performed to identify factors related to unmet community care needs.ResultsThe results showed that lower number of children, increased years of schooling, poorer self-perceived economic and health status, residing in an institution rather than living with household members, not having public old-age pensions, and not having activity due to daily living impairments were associated with a higher likelihood of unmet community care needs among older adults.ConclusionsThese findings indicate the necessity for crafting policies that consider the factors affecting unmet community care needs of older adults, including their health vulnerabilities and individual needs. Implementing national initiatives aimed at enhancing the quality of services delivered to older adults is crucial, along with establishing programmes to proactively address their vulnerabilities and individual needs. This study can contribute to the formulation of policy measures aimed at enhancing community care services of older adults in China.

Optimal Design of Raising Retirement Age

Population aging threatens the future fiscal balance of the public pension system across many countries, and policymakers have often undertaken parametric pension reform as a solution. However, any reform will inevitably introduce intergenerational conflicts and thus needs a gradual transition to allow individuals to slowly adapt to their new retirement plans. In this article, we study the optimal schedule for lifting the full retirement age using the optimal control approach. Given the aggregate actuarial loss of the pension system, our target is to smoothly distribute the deficit across different generations, subject to a fairness constraint that prohibits any cohorts from taking advantage of others. We further illustrate our results using China as an empirical example and investigate the impacts of different actuarial assumptions, benefit accrual formulae, and population structures.

Barriers to Saving for Retirement: Evidence from a Public Pension Program in Mongolia

Barriers to Saving for Retirement: Evidence from a Public Pension Program in Mongolia

Chinese Migrant Workers' Financial Security in Old Age-A Cultural Shift From Reliance on Filial Piety to Public Pension.

Migrant workers' retirement in rural China need not mean that they are financially ready for retirement. This study examines which factors influence migrant workers' public pension savings. Using a mixed-methods approach comprising surveys and interviews with Chinese migrant workers from three emigration provinces (Anhui, Henan, and Sichuan), we find that migrant workers with more social support and less spending on children are more likely to have public pension savings than their counterparts. We also observe an age cohort effect for spending on children: The younger cohorts of migrant workers in their 40s and 50s are more likely to spend their savings on children than save for retirement. In the dual process of urbanization and population aging, the emergence of retirement in rural China is reshaping the intergenerational relations such that the culture of filial piety is no longer the sole foundation of old-age financial security.

Taking our lives out of their portfolios

AbstractBrett Christophers’ Our Lives in Their Portfolios documents the rising dominance of asset managers in tangible assets that matter to society, such as housing and infrastructure. He rightly describes the social harm of asset managers who focus on short-term wealth extraction from assets that require long-term investment. Where Christophers focuses less is on another structural question raised: why are the financial assets of working people in public and union pension funds managed by these extractive asset managers in the first place? How do we take our lives out of their portfolios?

Taxation of public pensions in European Union countries

Taxation of public pensions in European Union countries

Population aging, pensions, informality and labor market frictions in Lebanon. Reforms and policy choices

We evaluate the effects of population aging on the macroeconomic evolution of the Lebanese economy and the financial sustainability of its major pension schemes. We use an OLG model with labor market frictions as in de la Croix et al. (2013). Individuals are differentiated by their origin, age, gender, and education and choose the sector of activity, which implies that the size of the informal sector is endogenous. We assess the long-run implications of population aging and show that the public sector pension scheme is unsustainable. In contrast, the private sector scheme is insufficient to ensure decent living standards for the elderly. Finally, we evaluate the effects of two pension reforms. We first propose a mix of measures that guarantee the sustainability of the public sector scheme. Then, we evaluate the impact of the pension reform introduced in December 2023 and of an alternative reform aiming at increasing the size of the private sector scheme to improve the living standards for the elderly.