Pension Rates Research Articles

Tax System, Replacement Rate of Pension and Child Allowance

This paper examines an endogenous fertility model with the aim of investigating how the tax burden necessary to finance pension benefits and a child-care support policy affects fertility and the replacement rate of pension in the steady state with theoretical analyses and numerical examples. The results presented in this paper are as follows. Without child allowance, income taxation can not raise the replacement rate largely. However, consumption taxation can raise the replacement rate largely. In Japan, the government sets the replacement rate as 50%. In terms of welfare, the pension benefit should be financed by consumption taxation and child allowance should be provided to achieve the replacement rate 50%.

Effects of graded return-to-work: a propensity-score-matched analysis.

Graded work exposure is deemed to have a therapeutic effect. In Germany, graded return-to-work (GRTW) is therefore frequently used following a rehabilitation program if workers are still unable to perform full job duties. The aim of the analyses was to determine long-term effects on disability pension and regular employment. Analyses were performed with longitudinal administrative data. Patients aged 18-60 years who attended an orthopedic, cardiac, oncological, or psychosomatic rehabilitation between January and June 2007 were eligible to participate in a GRTW scheme. The effects of GRTW were analyzed by a propensity-score-matched comparison of patients with and without GRTW. Outcomes were disability pension rates, regular income, and the duration of receiving welfare benefits due to sickness absence and unemployment up to the end of 2009. The propensity-score-matched sample comprised 1875 patients on GRTW and 1875 matched controls not undergoing GRTW. The probability of a disability pension was decreased by about 40% among GRTW patients [5.4% versus 8.6%; hazard rate ratio (HR) 0.62, 95% confidence interval (95% CI) 0.49-0.80]. The three-year income (2007-2009) was EUR12920 higher (95% CI EUR10054-15786) in the GRTW group. The duration of receiving welfare benefits due to sickness absence and unemployment was significantly reduced. Graded work exposure supports labor participation and reduces the risk of permanent work disability.

Retiree Welfare and the 2009 Pension Increase: Impacts from an Australian Experiment

The welfare effects from the 2009 increase in the age pension are evaluated using a quasi‐experimental, difference‐in‐difference regression framework. Using microdata to exploit the exogenous and large increase in the single‐person pension rate, the research finds significant improvements in the material welfare of single age pensioners. In particular, non‐housing and total consumption rose by 7 per cent and 4 per cent, respectively. The effects were amplified among the poorest retirees. The study extends the literature on the welfare benefits of pension programs, and provides evidence that the policy changes were highly effective in lifting the material welfare of the targeted beneficiaries.

Employment and income among first-time cases diagnosed with non-affective psychosis in Stockholm, Sweden: a follow-up study 2004/2005-2010.

Non-affective psychoses (F20-F29) are serious conditions causing a high degree of disability. Loss of income and increasing costs for personal care and treatment are severe consequences following the disorders, but less is known about employment and income in different social strata. The aim was to study these conditions among persons with non-affective psychosis compared to the general population, and possible social differentials. A population-based follow-up study with 530,350 persons (aged 18-44), including 756 first-time cases diagnosed with non-affective psychosis registered in in- or outpatient psychiatric care in 2005 or 2006. Age-standardised rates of non-employment, disability pension, social assistance and poverty were calculated at baseline and at follow-up in 2010. Odds ratios of poverty were estimated using logistic regression, adjusting for employment status, age, education and country of birth. Before diagnosis, rates of non-employment, disability pension and social assistance were higher among persons with non-affective psychosis compared to the general population. At the follow-up, rates of disability pension had doubled, most pronounced among women with only compulsory education. Rates of social assistance were twice as high for foreign-born women. Among persons with non-affective psychosis, non-employment, lower education (among men) and being foreign born (among women) were associated with an increased risk of poverty at follow-up. Poor employment and income conditions were found among persons with non-affective psychosis, but the social insurance system seemed to alleviate the poor income conditions. Early and preventative support to encourage employment and income security is needed, which could support recovery.

한국과 미국의 사적연금자산 수요에 관한 비교연구

Abstract Using the most recent dataset of Korea and U.S. household finance, this study analyzed demand and adequacy of private pensions for pre-retirees. For this purpose, 2013 Korean Retirement and Income Study (KReIS) of national pension research institute in Korea and 2013 SCF (Survey of Consumer Finances) of FRB in U.S. were used. For comprehensive comparisons of the two countries, this study classified the private pension into sub-categories such as personal pension, corporate pension, and retirement benefits , and used three different criteria including ownership, accumulated present value of each pension, and income replacement ratio of each pension. After controlling for other factors, educational level of householder and household income were critical determinants of size and adequacy of private pension in both countries. Different from Korean househ olds, householders’ gender, marital status, and health status had an important effect on the private pension size and adequacy in the U.S. In addition, home ownership significantly increased only private pension adequacy in Korea, and also increased ownership rate, size, and adequacy of private pension in the U.S. Results of this study provide us eful implications for future pension system and policy in Korea.

Accounting Implications for Managed Earnings via Pension Expense

Recent earnings management studies provide evidence firms manage reported earnings to achieve certain capital market reporting objectives. This study extends earlier research by focusing directly on pension expense rather than focusing on the effect of individual pension rate assumptions. This study uses a $.10 screening technique in selecting the sample for testing. Based on a proxy for premanaged earnings, firms hypothetically missing their capital market benchmark earnings (i.e. prior year earnings target) are predicted and shown to reduce their actual pension expense to increase actual reported earnings; whereas firms hypothetically beating their capital market benchmark earnings (i.e. prior year earnings target) are predicted and shown to increase their actual pension expense to reduce their actual reported earnings. Results suggest firms use pension expense to actively and predictably manage actual reported earnings.

How to Finance Pensions: Optimal Strategies for Pay‐as‐You‐Go Pension Systems

The aim of this paper was to design optimal strategies using nonlinear dynamic programming to guarantee the required level of liquidity in pay‐as‐you‐go pension systems through changes in the key variables of the system, such as the contribution rate, retirement age and/or indexation of pensions. These strategies, also known as automatic balancing mechanisms (ABMs), calculate the optimal path of these variables over time, managing fluctuations in longevity, fertility rates, salary growth or any other kind of uncertainty faced by the pension scheme without repeated legislative intervention. A numerical application of our model, which uses the projection of the population structure of two representative countries, illustrates the main findings of the paper. Copyright © 2015 John Wiley & Sons, Ltd.

Psychiatric diagnoses and risk of suicidal behaviour in young disability pensioners: prospective cohort studies of all 19-23 year olds in Sweden in 1995, 2000, and 2005, respectively.

ObjectiveIncreasing rates of disability pension (DP) have been observed among young adults. We studied specific psychiatric DP diagnoses and subsequent risk of suicidal behaviour in a series of three cohorts of young adult in Sweden.MethodIn a nationwide register study, we included all young adults who in 1995, 2000, and 2005, respectively, were 19–23 years old and lived in Sweden (n≈500,000 per cohort). Rates of DP and specific psychiatric DP diagnoses were recorded in each cohort. Hazard ratios (HRs) and 95% confidence intervals (CIs) for suicidal behaviour during the following five years, with the corresponding age group as reference, were calculated by Cox proportional hazard regression, adjusted for demographic variables and previous own and parental suicidal behaviour.ResultsThe overall proportion with DP in this age group increased from 0.92% in 1995 to 2.29% in 2005, with particularly large increases in psychiatric diagnoses such as hyperkinetic disorders, pervasive developmental disorders, and depression/anxiety. The overall proportion of young disability pensioners attempting suicide during the five-year follow-up increased from 2.21% in the 1995 cohort to 3.81% in the 2005 cohort. Within most psychiatric DP diagnoses, the risk of attempted suicide did not change significantly over time, whereas suicide attempts increased in the reference group. Accordingly, the HRs for suicide attempt decreased in some psychiatric DP diagnoses. The highest adjusted HRs were observed for depression/anxiety (16.41; CI: 9.06 to 29.74) and schizophrenia (9.37; 6.13 to 14.31) in the 1995 cohort. The rate of suicide among young disability pensioners during follow-up ranged from 0.19% in 1995 to 0.37% in 2005, mainly occurring in individuals with psychiatric diagnoses.ConclusionSuicidal behaviour has become more prevalent among young disability pensioners, which co-occurred with an increased tendency to grant DP in psychiatric diagnoses with a known high risk of suicidal behaviour. Preventive measures are warranted.

Cannabis use in adolescence and risk of future disability pension: A 39-year longitudinal cohort study

AimsThis study aimed at examining a possible association between cannabis use in adolescence and future disability pension (DP). DP can be granted to any person in Sweden aged 16–65 years if working capacity is judged to be permanently reduced due to long-standing illness or injury. MethodsData were obtained from a longitudinal cohort study comprising 49,321 Swedish men born in 1949–1951 who were conscripted to compulsory military service aged 18–20 years. Data on DP was collected from national registers. ResultsResults showed that individuals who used cannabis in adolescence had considerably higher rates of disability pension throughout the follow-up until 59 years of age. In Cox proportional-hazards regression analyses, adjustment for covariates (social background, mental health, physical fitness, risky alcohol use, tobacco smoking and illicit drug use) attenuated the associations. However, when all covariates where entered simultaneously, about a 30% increased hazard ratio of DP from 40 to 59 years of age still remained in the group reporting cannabis use more than 50 times. ConclusionsThis study shows that heavy cannabis use in late adolescence was associated with an increased relative risk of labor market exclusion through disability pension.

Work participation among the morbidly obese seeking bariatric surgery: an exploratory study from Norway.

The aim of this study is to assess the rate of work participation and disability pension, and identify predictors for sickness absence and disability pension, among morbidly obese individuals. The data were collected from the Obesity Surgery Registry at Førde Central Hospital and consists of patients undergoing bariatric surgery between April 2001 and February 2013. Multivariate logistic regression was performed to identify predictors of sickness absence and disability pension. The sample consisted of 576 patients (63.9 % females) with a mean (range, SD) age of 41.7 (18-66, 10.6) and a mean body mass index (BMI) of 47.7 (32.5-80.8, 7.7). Patients working full- or part-time comprised 55.6 % of the sample and 29.7 % received a disability pension; only 46.4 % of the sample received an income from paid work without additional benefits. Having a BMI above 50, lower levels of education, and suffering from four or more comorbidities were significant predictors of sickness absence. Female gender, psychiatric disorders, lower levels of education, asthma, heart failure and suffering from four or more comorbidities were significant predictors of disability pension. The proportion of the work participation and disability pension among this morbidly obese population is of substantial concern, as work participation has proven important for the health-related quality of life. This, combined with the fact that these patients are significantly less educated than the general population, can potentially have grave socioeconomic consequences. Increased knowledge of obesity development and the work history of these patients are needed to implement policies that ensure increased rates of work participation.

Do working conditions explain the increased risks of disability pension among men and women with low education? A follow-up of Swedish cohorts.

Rates of disability pension are greatly increased among people with low education. This study examines the extent to which associations between education and disability pensions might be explained by differences in working conditions. Information on individuals at age 13 years was used to assess confounding of associations. Two nationally representative samples of men and women born in 1948 and 1953 in Sweden (22 889 participants in total) were linked to information from social insurance records on cause (musculoskeletal, psychiatric, and other) and date (from 1986-2008) of disability pension. Education data were obtained from administrative records. Occupation data were used for measurement of physical strain at work and job control. Data on paternal education, ambition to study, and intellectual performance were collected in school. Women were found to have higher rates of disability pension than men, regardless of diagnosis, whereas men had a steeper increase in disability pension by declining educational level. Adjustment of associations for paternal education, ambition to study, and intellectual performance at age 13 had a considerable attenuating effect, also when disability pension with a musculoskeletal diagnosis was the outcome. Despite this, high physical strain at work and low job control both contributed to explain the associations between low education and disability pensions in multivariable models. Working conditions seem to partly explain the increased rate of disability pension among men and women with lower education even though this association does reflect considerable selection effects based on factors already present in late childhood.

Productivity loss and work disability in patients with inflammatory bowel diseases in Hungary in the era of biologics

Background and Aims: To assess work disability (WD) and disability pension (DP) rates in a referral inflammatory bowel disease (IBD) involving patients with Crohn's disease (CD) or ulcerative colitis (UC) cohort and to identify possible clinical or demographic factors associated with WD.

Work disability and productivity loss in patients with inflammatory bowel diseases in Hungary in the era of biologics.

To assess work disability (WD) rates in an inflammatory bowel disease (IBD) cohort involving patients with Crohn's disease (CD) or ulcerative colitis (UC) cohort and to identify possible clinical or demographic factors associated with WD. To our knowledge, this is the first study from Eastern Europe that has estimated indirect costs in IBD. Data from 443 (M/F: 202/241, CD/UC: 260/183, mean age: 35.5 (CD) and 40.5 (UC) years, biological drug exposure 31.2/11.5%) consecutive patients were included. WD data were collected by questionnaire and the work productivity and activity impairment instrument. Disability pension (DP) rates in the general population were retrieved from public databases. The overall DP rate in this IBD population was 32.3%, with partial disability in 24.2%. Of all DP events, 88.8% were directly related to IBD. Overall, full DP was more prevalent in IBD (RR: 1.51, p < 0.001) and CD (RR: 1.74, p < 0.001) but not in UC compared to the general population and also in CD compared to UC (OR 1.57, p = 0.03). RR for full DP was increased only in young CD patients (RR<35 year olds: 9.4; RR36-40 year olds: 9.4 and 5.6, p < 0.01 for both). In CD, age group, previous surgery, disease duration, frequent relapses, and the presence of arthritis/arthralgia were associated with an increased risk for DP. Among employed patients, absenteeism and presenteeism was reported in of 25.9 and 60.3% patients, respectively, leading to a 28% loss of work productivity and a 32% activity loss, and was associated with disease activity and age group. Average cost of productivity loss due to disability and sick leave with a human capital approach was 1,450 and 430 €/patient/year in IBD, respectively (total productivity loss 1,880 €/patient/year), the costs of presenteeism were 2,605 (SD = 2,770) and 2,410 (SD = 2,970) €/patient/year in CD and UC, respectively. Risk of DP was highly increased in young CD patients (sixfold to ninefold). Previous surgery and presence of arthritis/arthralgia was identified as risk factors for DP. Work productivity is significantly impaired in IBD and is associated with high productivity loss.

Clinical predictors of the long‐term social outcome and quality of life in juvenile myoclonic epilepsy: 20–65 years of follow‐up

The long-term social outcome in patients with juvenile myoclonic epilepsy (JME) is still controversial. The aim of this study was both to investigate the long-term social outcome in relation to clinical variables and to identify epilepsy-related factors that affect the quality of life (QoL) in JME patients with a follow-up of at least 20years. A retrospective selection of 33 of 90 patients (21 female) from a tertiary epilepsy center diagnosed with JME and followed for ≥20years (mean 37.8years) was studied. All patients were evaluated with a thorough review of their medical records, and a subsequent face-to-face or telephone interview. QOLIE-31-P questionnaire (QoL In Epilepsy) and Beck Depression Inventory-II were used to assess the QoL and the presence and severity of depressive symptoms, respectively. Of 33 patients, 18 (54.5%) became seizure-free; in 4 of the patients (22.2%), antiepileptic drug (AED) treatment was discontinued. Early and long-term seizure freedom improves both social adjustment (p=0.02) and occupational integration (p=0.02) and associates with a better QoL (odds ratio [OR] 2.25). A high seizure burden highly affects both aspects of personal life-family and work; notably the occurrence of frequent and/or late onset generalized tonic-clonic seizures increases the risk of concomitant diseases (p=0.05) and lifelong AED treatment (p=0.03), decreases the patient's employability (p=0.02), increases the rate of employment disability pension (p=0.05), and considerably increases public/social spending. Seizure freedom significantly increases the QoL (p=0.001), whereas more severe courses of epilepsy (OR 3.2), AED side effects (p=0.04), depression (p=0.02), and sleep disturbances (OR 2.7) considerably decrease the patient's QoL. Although patients with JME are a heterogeneous group, several predictors for the long-term social, family, educational, and occupational outcome have been identified in our study and should be considered in the effort to both improve the patient's QoL as well as preserve economic resources.

The Effect of Longevity on Pensions in the Nigerian Pension Scheme

The old pension scheme pension were based on length of service and on a percentage of final salaries. In the new pension scheme contributions are invested till retirement. Accumulated contributions are used to purchase pension at retirement. The paper looks at the effect of longevity on the annuity values at retirement and the consequent pensions. Three lives age 25, 35 and 45 with 35, 25 and 15 years to retirement are considered. Five Life Tables with life expectancies of 13.48, 14.43, 15.61, 17.98 and 19.51 years at age 60 each were considered. We find that the new pension rate is considerably less than the old rate for each Life Table and longevity increases annuity value, thereby reducing pensions. The percentage goes from 100% to 82.8% taking the Life .Table with the least life expectancy as a base and for a life aged 25.The same result follows for each life considered,

Prediction of patient contacts by cognition in schizophrenia

To investigate the correlations between cognitive function and clinical outcome variables. Patients diagnosed for the first time with schizophrenia between January 2004 and June 2010 were cognitively tested in conjunction with diagnostic procedures. Cognitive test data were connected to Danish healthcare registers and patients were followed in the registers from their first contact with psychiatric in- and outpatient care until October 2011. Patients had impaired attention, processing speed and executive function as measured by Trail Making Test part B; their executive functions, as measured by the Wisconsin Card Sorting Test (WCST), and working memory, as measured by Rigshospitalet's digit span test, were unaffected as compared to norms. The admission rate, from schizophrenia diagnosis to the end of the study, was predicted by Trail Making Test part A, Rey's Auditory Verbal Learning Test (RAVLT), RAVLT (total learning), RAVLT (memory), d2 Test of Attention (total) and d2 type 2 error (error of commission), independent of gender, age and schizophrenia subtype. The length of hospitalization after the schizophrenia diagnosis was mainly determined by the schizophrenia subtype (schizophrenia simplex: incidence rate ratio (IRR) 0.24; 95% confidence interval (CI) 0.15-0.40, p < 0.001). Diagnosis was secondarily determined by deficits in attention and executive function, Trail Making Test part B, d2 Test of Attention (total), d2 type 1 error (error of omission), d2 type 2 error, and also by age and substance use disorder. The outpatient contact rate from schizophrenia diagnosis to the end of the study was predicted by d2 Test of Attention, Trail Making Test part A, and d2 type 2 error. The annual rate of criminal conviction, institutionalization and social retirement pension was mainly predicted by substance misuse. Cognitive function only predicted hospitalization and outpatient contacts to a minor degree in a cohort of newly diagnosed patients with schizophrenia.

Discretionary Pension Assumption Choices, Corporate Governance Effectiveness and Financial Statement Manipulation in Taiwan

This study examines how financial statement management via pension plan assumption choices, a simple mechanism through which management can manipulate financial reports, is related to corporate governance effectiveness. Based on our sample of Taiwanese listed companies, which are characterized by a high degree of ownership concentration and an emerging economy, we find that the deviation between control rights and cash flow rights, the number of board seats held by the ultimate controller, and board independence are significantly related to more aggressive expected rate of return on pension assets assumption choices. We also find that when the ultimate controller also serves as the CEO, this conflict of interest is associated with aggressive pension assumptions related to the PBO. In addition, institutional shareholders appear to play an important monitoring role, which can mitigate opportunistic pension rate assumption choices. Our findings indicate that the opacity inherent in pension accounting guidance is likely exacerbated by poor corporate governance. It informs the current debate over measurement and reporting discretion for DB pension plans specifically as well as the more general debate over managing financial statements in the presence of accounting discretion.

The Convergence of Welfare State Indicators in Europe: Evidence from Panel Data

This paper investigates whether there is a convergence in welfare state programmes among the ‘old’ EU Member States. To identify such trends, the study relies on net pension and net unemployment replacement rates, as well as on public social expenditure data. Empirically, a sample of 14 economies (EU-15 excluding Luxembourg) between 1980 and 2005 is used. The empirical findings reveal the presence of a convergence process, driven by a strong catch-up in social protection levels in the southern Member States. Furthermore, convergence in replacement rates is substantially less pronounced than convergence in public social expenditure. In sum, the results indicate that the converging trend of public social expenditure and unemployment benefits has continued in advanced industrialised countries and over time. These findings confirm and expand on earlier studies (Caminada et al. 2001; Starke et al. 2008; Schmitt and Starke 2011).

Proof firm downsizing and diagnosis-specific disability pensioning in Norway

BackgroundWe wanted to investigate if firm downsizing is related to an increased rate of disability pensions among the former employed, especially for those with musculoskeletal and psychiatric diagnoses, and for those having to leave the firm.MethodsStatistics Norway provided a linked file with demographic information and all social security grants from the National Insurance Administration for 1992–2004 for all inhabitants in Norway. Our sample was aged 30–55 years in 1995, being alive, employed and not having a disability pension at the end of 2000. Downsizing was defined as percent change in number of employed per firm from 1995 to end 2000. Employment data were missing for 25.6% of the sample.ResultsDisability pension rates in the next four years were 25% higher for those experiencing a 30-59% downsizing than for those not experiencing a reduction of the workforce. 1-29% and 60-100% downsizing did not have this effect. Stayers following down-sizing had higher disability pension rates than leavers. What we have called complex musculoskeletal and psychiatric diagnoses were relatively most common.ConclusionModerate downsizing is followed by a significant increase in disability pension rates in the following four years, often with complex musculoskeletal and psychiatric diagnoses.

Municipal unemployment and municipal typologies as predictors of disability pensioning in Norway: A multilevel analysis

The rise in the number of disability pensioners in Norway has been given much attention by the government and by researchers due to the resulting financial and societal challenges entailed. Eligibility for a disability pension is decided by The Norwegian Labour and Welfare Administration (NAV), and is closely correlated with several socioeconomic predictors. Geographical differences have also been observed in the allocations to recipients of disability pensions, and the purpose of this study was to investigate whether municipal unemployment rates and municipal typologies in Norway may explain some of the geographical variance in individual disability pensioning. 436 municipalities in Norway and all 1,507,192 Norwegian males and females between the ages of 30-55 years in 1997 were included in the analysis. Multilevel random intercept analysis was performed to assess the influence on disability pensioning of the individual factors age, education and income together with the contextual factors municipal unemployment, centrality, industry affiliation and residential density. Individuals in high unemployment municipalities had a 7-17% higher risk of disability pension. Of the total variability in disability pensioning, 2.5% for males and 1.9% for females was between municipalities. The other municipal factors had only small influences. In addition to individual socioeconomic factors, contextual factors seem to be important determinants of disability pension rates. Municipal unemployment had the greatest influence.