Statutory Pension Research Articles

Österreichs Rentenpolitik: Vom Nachbarn lernen?

Abstract In the German debate on retirement pensions, Austria’s policy is often referenced. The considerably higher statutory pensions in the neighbouring country arouse interest. How does Austria finance these higher pensions? How does the Austrian pension system in general differ from the German one, especially against the background of the latest pension reforms and inflation in Austria? What reform options can applied to Germany?

Der Reformvorschlag einer preisindexierten Dynamisierung der Rente

Abstract This article deals with the financing problems of statutory pension insurance in Germany, which are primarily the result of demographic changes in the population. It discusses the reform proposal of a price-indexed dynamisation of pensions and highlights the economic considerations and political ideas underlying the current linking of pensions to wage trends. The advantages and disadvantages of an alternative link to price trends are discussed. Furthermore, the reform proposal of a differentiated pension adjustment is critically examined. Differentiated adjustments are usually intended to protect only particularly vulnerable pensioners from high inflation.

Facilitators and barriers for working beyond statutory pension age: A prospective cohort study across 26 European countries.

The aging population of European countries highlights the need for extended working lives. This study aims to investigate facilitators and barriers for working beyond the statutory pension age (SPA). Using data from waves 1, 2, 4-9 of the Survey of Health, Ageing and Retirement in Europe (SHARE) (2004-2022), we followed 9131 workers with a mean age of 56.9 [standard deviation (SD) 3.5] years from 26 European countries until they surpassed the SPA for their respective country, sex and year of participation. Using robust Poisson regression, we modelled the prospective association of work factors, lifestyle, health, and demographics at baseline with working at least one year beyond the SPA. Participants were followed for 9.5 (SD 3.9) years. After surpassing the SPA by at least one year, 18% were still working. Among the work factors, opportunities for skill development [risk ratio (RR) 1.20, 95% confidence interval (CI) 1.07-1.34] and recognition at work (RR 1.13, 95% CI 1.01-1.26) facilitated working beyond SPA, while time pressure (RR 0.89, 95% CI 0.81-0.97) and poor prospects for job advancement (RR 0.76, 95% CI 0.70-0.83) were barriers. For the other factors, smoking was negatively associated with working beyond the SPA, while living in the northern part of Europe, higher level of education, and being divorced or separated were positively associated with working beyond the SPA. This prospective cohort study across 26 European countries identified four modifiable work factors that influenced working beyond the SPA. Addressing modifiable barriers and facilitators at the workplace and through public health initiatives could help extend working lives in Europe.

고령여성의 빈곤대책으로서의 공적연금과 기초연금 - 한국과 독일 비교

Purpose: Korea reached an aging rate of 18.4% in 2023, and it is expected to reach 20.6% in 2025, making it a super-aged society. Meanwhile, Germany became a super-aged society in 2008, with an aging rate over 21%. In Korea and Germany, social concern about the elderly's poverty is increasing as the aging rate increases. However, there is a large difference between Korea and Germany in the relative poverty rate of the elderly, in particular for elderly women. This paper focuses on women's pension rights in the public pension and the basic security benefit in old age as measures against poverty of elderly women in Korea and Germany. Research design, data, and methodology: This paper examines the following two points as measures against poverty for the elderly in Korea and Germany, and compares the characteristics, similarities and differences between the two countries: First, the structures of women's pension rights and the pension amounts in the public pensions of Korea and Germany are compared. Second, as public pension and public assistance that guarantee stable income and minimum sociocultural standard of living for the elderly, Korea's “Basic Pension(BP)” and Germany's “Basic Security Benefit for the Elderly (GS: Grundsicherung)” and “Basic Pension(GR: Grundrente)” are compared. Results: The research results are the following three points. First, the relative poverty rate for elderly women in Germany is much lower than that in Korea, and one of the main reasons for this is consideration given to child-rearing period and short-time employment under the Pension law. In particular, the child-rearing period is an important factor for strengthening women's pension rights. Second, as a basic security benefit for the elderly, there is a “Basic Pension(BP)” in Korea, and there is a “Basic Security Benefit for the Elderly(GS)” in Germany. Although the two systems have similarities in terms of financial resources and means test methods, there are significant differences in the scope of eligible beneficiaries of benefit. Third, the basic pension(BP) in Korea and basic pension(GR) in Germany have the same name, and the financial resource for the benefits is borne by the government. But they are completely different systems. The basic pension(BP) in Korea is a public assistance, and its legal basis is similar to Basic Security Benefits for the Elderly(GS)''in Germany. The basic pension(GR) in Germany is an additional benefit added to the statutory public pension amounts and has the effect of increasing pension amount of elderly women in particular. Implications: Public pension and public assistance that guarantee the stable income and the sociocultural minimum subsistence level for women in old age are becoming more important than before. The public pension system in both countries have similarities in that the pension contribution is based on '' individual units'' and a dependent spouse is classified as Voluntary Insured Person. And both countries are enforcing ''basic pension'' as measures against poverty for the elderly. But the relative poverty rate for elderly women in Korea is 48.3%, much higher than 10.4% in Germany. The main reason for this difference between the two countries is the support in the pension system that takes into account women's child-rearing period, working style and low pension amount. Statutory public pension of Germany has the function of social compensation and burden distribution for child care. Korea, which needs to cope with its declining birthrate and aging society, needs to consider the achievements and effects of Germany, which takes into account the child-rearing support and the poverty measure for elderly women in its pension system.

Health Capacity to Work at Older Ages in the Republic of Korea

Health Capacity to Work at Older Ages in the Republic of Korea

Reformoptionen der gesetzlichen Rentenversicherung

Abstract Demographic change and thus the ageing of the population is progressing rapidly in Germany. A reform of the statutory pension insurance (GRV) is therefore becoming increasingly urgent, with the German government already promising in its 2021 coalition agreement that “pensions must be reliable and adequate”. Most recently, the German Council of Economic Experts presented several reform options in its annual report, which are intended to ensure adequate old-age provisions with sustainable nancial viability. However, these proposals were not without objections within the Council. The question therefore arises as to how the statutory pension scheme can be reformed to ensure that adequate and a ordable pensions are nanced in a stable and sustainable manner.

Realitäten anerkennen, Rente zukunftsfähig gestalten

Abstract Current plans to permanently fix the level of benefits provided by the German Statutory Pension Scheme are at odds with the reality of demographic ageing and the requirements for sustainable pension policies. Instead, the causes of the ageing process ought to be addressed through poten-tially unpopular reforms. Linking the statutory retirement age to further life expectancy and building up supplementary funded pensions are core elements of a far-sighted reform that could stabilise the German system of old-age provision in the long run. In the short run, increasing con-tribution rates and reducing the benefit level are inevitable. This should be communicated very clearly.

“Swimming Against the Current” of Demutualizations in the 1990s and 2000s: The Case of the Private Statutory Pension Insurance Sector in Finland

The global insurance industry of the 1990s and 2000s witnessed a significant wave of demutualizations often regarded as a world-wide phenomenon. In this article, we describe the case of the Finnish private statutory pension insurance sector and the reasons why it eventually “swam against the current” by explicitly deciding to emphasize mutuals —that still today account for 96% of the particular sector in Finland and has ensured that the almost 150 billion euros of pension assets has stayed in control and in use of the Finnish people, organizations and entrepreneurs. As an empirical dataset, we analyze two interviews of high-level experts who participated in the working group drafting the guidelines for the Finnish Act on Pension Insurance Companies.Received: 28 April 2023 Accepted: 20 December 2023

Senior citizens' intrinsic and extrinsic work motivation

PurposeIt is important to understand why some workers prolong their working life even though they are entitled to statutory pension benefits. This paper aims to investigate whether senior workers are motivated by external factors such as pay and social expectations (extrinsic motivation) or are primarily motivated by internal factors such as job satisfaction (intrinsic motivation). This is a central question for policymakers and social partners when it comes to the design of public pension systems and work organisation.Design/methodology/approachThis study uses a combined longitudinal administrative data and an own-designed postal survey to ask individuals aged 65–76 years to describe their work motivation. Based on the answers, this study constructs an index of autonomous motivation (AM) where a value of zero implies only extrinsic motivation and a value of one implies only intrinsic motivation. The values between zero and one thus imply various grades of AM, where higher values signal motivation that is more autonomous and hence a higher degree of intrinsic work motivation.FindingsThe results of the statistical analysis show that the extent of intrinsic motivation is higher among senior workers who retired aged 65 years or older compared to those who retired at 65 years or younger. In addition, this study found that the degree of intrinsic work motivation among senior workers decreases when they face economic and financial constraints. It also found that intrinsic motivation is more prevalent among high-skilled workers.Research limitations/implicationsThis study shows that individuals who continue to work after 65 are mostly motivated by the satisfaction they derive from their job. Job satisfaction is strongly related to skill level, job quality, job content and job autonomy. Results indicate that job quality and commitment to work are essential elements for motivating seniors to postpone retirement.Originality/valueThis study contributes to this literature by applying a multidisciplinary approach from organisational psychology and labour economics that considers the potential importance of intrinsic motivation to work after standard retirement age. The authors think that this approach enhances the understanding of the mechanisms behind the lengthening of working life. Finally, this study suggests a simple, but efficient way of empirically measuring the extent of intrinsic motivation among workers.

Pension insurance contributions and ESG performance: Evidence from China

The paper examines the impact and mechanism of statutory pension insurance contribution rates on firms' ESG performance. Using comprehensive data on statutory pension insurance contribution rates and Chinese listed companies from 2012 to 2019, we find that high contribution rates significantly reduce ESG performance, and the finding remains robust after robustness tests. We explain how pension insurance contributions undermine ESG performance through social responsibility and layoffs. Regarding heterogeneity, labor-intensive and small firms are more susceptible to increased pension insurance.

8.D. Workshop: The German National Cohort (NAKO): Design, current state, and selected results

Abstract This workshop aims to provide an overview on the current state and on selected results of the German National Cohort (NAKO) - the largest multidisciplinary, population-based cohort study in Germany. The session will include one overview presentation and three presentations on selected topics: use of secondary and registry data, environmental exposures, and COVID-19. NAKO aims to investigate the development and aetiology of diseases, and to identify risk factors and enhance early detection and prevention of diseases with a focus on diabetes, cancer, cardiovascular, pulmonary, neurological, psychiatric, and infectious diseases. Between 2014 and 2019, 205,415 participants aged 20-74 years were recruited and examined at 18 study centres across Germany. During their visit to the study centre, they participated in an extensive examination programme including a face-to-face interview, self-administered, computer-based questionnaires, in-depth biomedical examinations, and the collection of various bio-samples. In addition, a subgroup of 30,861 participants received whole-body Magnet Resonance Imaging (MRI) with a focus on brain and cardiac structures, the musculoskeletal system, and body fat distribution. All study participants are re-invited for examinations at the study centres at 4-5 year intervals. The programme for the first re-examination is similar to the baseline programme to detect changes in risk factor profiles and in vascular, cardiac, metabolic, neurocognitive, pulmonary and sensory function. By 31.03.23, 100,822 participants were re-examined, including 14,950 with MRI re-examination. A third examination will start in 2024. Additional information on morbidity, drug use, health care utilization, rehabilitation, cancer diagnoses and therapies, as well as employment and occupational history is obtained by record linkage with secondary data from health insurance companies, the statutory pension insurance, the unemployment fund, as well as through cancer registries and mortality follow-up. Information on environmental exposures (e.g., air pollution, traffic noise, climatic conditions) is linked to residential addresses of the participants to analyse the association with health and development of chronic diseases and to elucidate long-term effects of environmental stressors on health and disease. Two supplemental questionnaires focusing on COVID-19 pandemic-related aspects were provided to all NAKO participants. The second COVID-19 questionnaire was offered online between October 2022 and February 2023 and included questions on general state of health, psychosocial factors, Sars-CoV-2 and long-/post COVID symptoms. It was completed by > 110,000 NAKO participants. Due to its large sample size, the broad examination programme and the longitudinal design, NAKO provides a valuable resource for epidemiologic research and international scientific cooperations. Key messages • The workshop provides information on current state, and selected results of NAKO to facilitate harmonization of data collection between cohort studies and cooperations between scientists. • The workshop will be informative for researchers aiming to work with NAKO data as data access within the European Union is expected to be possible by the end of 2023.

Politik- und Marktversagen erfordern Entgeltund Rentenkorrektur

Abstract Pension policy with regard to statutory pension insurance can be described as a failure, at least since the Riester pension. It does not secure the standard of living and many pensioners are poor despite their pensions. In addition to a reduction in benefit levels, unemployment and significant inequality in income distribution also contribute to these developments. The author calls for compensating for this market and political failure and for raising the pension back to its original level.

Selection into maternity leave length and long-run maternal health in Germany

Abstract Existing literature shows the importance of maternity leave as a strategy for women to balance work and family responsibilities. However, only a few studies focused on the long-run impact of maternity leave length on maternal health. Therefore, how exactly they are related remains unclear. We examine women’s selection into different lengths of maternity leave as a potential explanation for the inconclusive findings in the literature on the association between maternity leave and maternal health. This study aims to unravel the association between maternity leave length and mothers’ long-term health in Germany. Drawing on detailed data from the German Statutory Pension Fund (DRV), we estimated the association between maternity leave length and sick leave from 3 years following their child’s birth for 4,243 women living in Germany in 2015 by applying discrete-time logistic regression. Our results show a negative relationship between maternity-leave length and long-term maternal health, likely driven by negative health selection. Long maternity leaves of more than 24 months were associated with worse maternal health in the long run, while a positive association emerged for vulnerable women with pre-existing health problems.

Voluntariness of social insurance for entrepreneurs – de lege ferenda postulates

Abstract Subject and purpose of work: The subject of this paper is to discuss the situation of entrepreneurs in the Polish social insurance system and to present postulates based on conclusions resulting from the analysis of the legal situation of entrepreneurs. Materials and methods: The institutional analysis method was used in the paper, which made it possible to present the situation of entrepreneurs in the Polish social insurance system. Based on the analysis of legal acts and the rules of the social security system, the main challenges and issues related to the non-agricultural business activity in Poland were pointed out. Results: As a result of the analyses, de lege ferenda postulates have been formulated indicating the need for changes in the area of social insurance for people engaged in non-agricultural business activity. Conclusions: Assuming that entrepreneurship is more valuable and that the right to social security can be exercised not only though the insurance process (but also by way of provision, cumulative, or assistance techniques), it is reasonable to introduce voluntary social insurance coverage for people engaged in non-agricultural business activities. With the introduction of voluntariness, it would be necessary to redefine the conditions of eligibility for the statutory minimum pension so that the rights to benefits are not abused.

Intergenerational actuarial fairness when longevity increases: Amending the retirement age

Continuous longevity improvements and population ageing have led countries to modify national public pension schemes by increasing standard and early retirement ages in a discretionary, scheduled, or automatic way, and making it harder for people to retire prematurely. To this end, countries have adopted alternative retirement age strategies, but our analyses show that the measures taken are often poorly designed and consequently misaligned with the pension scheme's ultimate goals. This paper discusses how to implement automatic indexation of the retirement age to life expectancy developments while respecting the principles of intergenerational actuarial fairness and neutrality among generations of the respective policy scheme design. With stable demographic conditions, we show in policy designs in which extended working lives translate into additional pension entitlements, the pension age must be automatically updated to keep the period in retirement constant. Alternatively, policy designs that pursue a fixed replacement rate are consistent with retirement age policies targeting a constant balance between active years in the workforce and years in retirement. Under conditions of population ageing, the statutory pension age will have to increase at a faster rate to meet the intergenerational equity criteria. The empirical strategy employed a Bayesian Model Ensemble approach to stochastic mortality modelling to address model risk and generate forecasts of intergenerationally and actuarially fair pension ages for 23 countries from 2000 to 2050. The findings show that the pension age increases needed to accommodate the effect of longevity developments on pay-as-you-go equilibrium and to reinstate equity between generations are sizeable and well beyond those employed and/or legislated in most countries. A new wave of pension reforms may be at the doorsteps.

Pension financialization and collective risk sharing in Canada and Finland

AbstractThis article contributes to the debate concerning pension financialization and how countries are adapting their pension systems to respond to demographic ageing. We do so by examining the statutory pension systems of Canada and Finland, which diverge interestingly from current international trends. The Canadian and Finnish public pension schemes reflect two tendencies often associated with pension financialization: an increasing reliance on financial markets and an investment policy with a diversified asset allocation. However, unlike in many other countries, this has not resulted in heightened individual risks in old‐age income security caused by a shift from defined benefit to defined contribution pensions – an otherwise common trend internationally.

The Impact of the COVID-19 Pandemic on the German Pension System

The COVID-19 pandemic was declared over in April 2023. Like the financial crisis of 2008, the pandemic outbreak had an exogenous shock effect on Germany's micro- and macroeconomic environment. This mainly affected the labor market, and after that, the Bundesregierung took measures to stabilize the labor market to prevent a dramatic increase in unemployment. The German pension system is a pay-as-you-go system that is financed on a long-term basis by demographic and economic developments. Based on these factors, projections on the effects of the COVID-19 pandemic on statutory pension insurance in Germany were already made in 2020. This paper compares the forecasts from 2020 with the actual development, combined with whether German pension insurance can be assessed as sustainable after the pandemic.

Die Aktienrente der Bundesregierung: Zielsetzung, Konzept, Gestaltungsfragen und Würdigungen

Abstract The statutory pension insurance in Germany is facing a massive financing problem. The background are demographic developments with a clearly aging population and the concept of „current income financing” – meaning that a decreasing number of people of working age have to pay the pension for an increasing number of people of retirement age with their social security premiums. Likewise the federal government set “stop bars” as political objectives, according to which premiums shall not rise above a certain level, pensions not fall below a certain level and the retirement age not be increased. With this in mind, in order to stabilize the statutory pension insurance, the government is planning to introduce partial capital cover. Hence, the federal government is to provide credit-financed “generational capital” of initially EUR 10 billion, which is to be gradually increased in the following years in order to invest it in the global stock market. The revenues and surplusses are intended to dampen future increases in premiums or to reduce the annual federal grants – currently in triple digit billions of Euros – to the statutory pension insurance. The article briefly presents the background to the pension problem in Germany and the basic points of the new concept of “stock pension”. Subsequently, open design issues are addressed, and ultimately a critical appraisal of the government’s concept of pension support, based on so-called “generational capital”, is made.

Pension Wealth and the Gender Wealth Gap

We examine the gender wealth gap with a focus on pension wealth and statutory pension rights. By taking into account employment characteristics of women and men, we are able to identify the extent to which the redistributive effect of pension rights reduces the gender wealth gap. The data for our analysis come from the German Socio-Economic Panel (SOEP), one of the few surveys that collects information on wealth and pension entitlements at the individual level. Pension wealth data are available in the SOEP for 2012 only. While the relative raw gender wealth gap is about 35% (or 31,000 euros) when analysing the standard measure of net worth, it shrinks to 28% when pension wealth is added. This reduction is due to redistributive elements such as caregiver credits provided through the statutory pension scheme. Results of a recentred influence functions (RIF) decomposition show that pension wealth reduces the gap substantially in the lower half of the distribution. At the 90th percentile, the gender wealth gap in net worth and in augmented wealth remains more stable at roughly 27–30%.

Understanding the effect of retirement on health behaviors in China: Causality, heterogeneity and time-varying effect.

Retirement is an important turning point during the course of life, but few studies have examined the effects of retirement on a broad range of health behaviors in China. We use the longitudinal data of the China Health and Nutrition Survey (CHNS) from 2004 to 2015 to conduct empirical analysis. Fuzzy discontinuity regression was used to assess the association between retirement and health behaviors in the entire sample and subgroups based on gender and education. A time-varying effect model was used to measure the anticipatory effect, immediate effect and lag effect of retirement. We observed that the transition to retirement was associated with healthier lifestyle habits, such as reduced smoking and alcohol consumption and increased exercise motivation. However, the transition was associated with worse sedentary behavior. No significant statistical association was found between retirement and sleep duration. Men and those with higher education levels are more likely to experience the impact of retirement. The anticipatory effect suggests that as the statutory pension age is predictable, workers adjust their behaviors 4 and 5 years before retirement. The lagged effect indicates that it takes time to develop new habits; thus, retirees change their behaviors 2–3 years after retirement. The paper discusses possible reasons for our findings and proposes several policy implications from the perspectives of the government and society to facilitate the realization of healthy aging.