Supplementary Pension Research Articles

The Importance of Supplementary Private Pension as a Form of Life Planning

The Importance of Supplementary Private Pension as a Form of Life Planning

The Impact of Supplementary Pension on Household Risky Financial Asset Allocation

With increasingly serious aging problem in China, supplementary pension, as the second pillar of the endowment insurance system, is expected to play an important role to relieve the pension pressure. Nowadays, people in China are exposed to various investment tools, but they still prefer to invest in risk-free financial assets. The allocation of household financial assets is not diversified enough. While supplementary pension is expected to improve financial structure of households. It may enhance the anti-risk ability of households, rational allocation of household assets, the ability of value-adding, and thus reduce the pressure of society to cope with the aging population. This paper selects the 2019 China Household Finance Survey (CHFS) database, using STATA software to investigate the impact of supplementary pension on risky financial asset allocation of Chinese households by applying probit and tobit models. The results show that supplementary pension can significantly increase the willingness of households to purchase risky financial products but has no significant effect on increasing the proportion of risky assets being held.

An analysis of how Millennials view social security

Objective: To identify and analyze how Millennials view social security.
 Methodology: A survey consisting of a 21- question structured questionnaire developed on the LimeSurvey® tool and sent to approximately 15 thousand people from all regions of Brazil. The respondents were selected on an open basis and according to the age group of this generation. The non-parametric Chi-Square test was performed for each question in the structured questionnaire to verify differences in the evaluation of the control variables.
 Results: Contrary to the analyzed study bases, most Brazilian Millennials in the survey think or are concerned about their retirement. One hypothesis based on the research findings is that Millennials are concerned about their retirements and believe that achieving a secure retirement will be a very complicated task in the future. Despite the low number of supplementary pensions among Millennials, most claim to have a high level of interest in it, and contribute to the literature on the subject.
 Study contributions: In addition to furthering the understanding of how Millennials deal with social security, this study can contribute to the development of public policies aimed at educating young people on social security.

Internal and external determinants of the use of supplementary pension plans in manager compensation

This study scrutinizes the use of supplementary pension plans (SPPs) in the executive compensation strategies of multinational and multi-Latin firms. The proposed analysis focuses on the internal and external factors that may influence the implementation of SPPs and their role in attracting, retaining, and motivating strategically valuable human capital in the form of executive managers. The analysis was based on in-depth interviews with a range of managers, representatives of multilateral institutions, researchers, and heads of pension funds and mandatory pension plans. Relevant complementary data was obtained from a variety or documentary sources. The paper offers valuable findings and implications for the design of compensation strategies of senior managers of multinational and multi-Latin firms. The study also has implications regarding the use of loyalty mechanisms aimed at developingcompetitive advantages to enhance business performance.

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

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

An empirical research on employee welfare and internal control quality.

Internal control is the key to achieve high-quality development of enterprises, but internal control failure cases frequently occur at home and abroad. Therefore, it is particularly important to explore ways to improve the quality of internal control and promote high-quality development of enterprises. Taking non-financial listed enterprises in China from 2015 to 2020 as research samples, this paper adopts empirical research methods to research the impact and mechanism of employee welfare on the quality of internal control of enterprises from the perspective of all-employee governance, aiming to explore ways for enterprises to improve the quality of internal control.The results showed that employee welfare can improve the quality of internal controls significantly. Furthermore, the effect is more significant in non-employee-intensive industries and high-marketization areas. Based on the analysis of internal control elements, the research found that employee welfare affects the quality of internal control mainly through two elements, risk assessment and control activities. However, the effects of employee welfare on the three other elements are insignificant. This paper enriched the relevant research on the economic consequences of employee welfare and the factors affecting the quality of internal control, and has certain enlightenment significance for the popularization of employee welfare, especially supplementary pension, and also provides a reference path for the improvement of the quality of internal control.

Experience of financial challenges, retirement concerns, and planning: evidence from representative samples of workers in 16 countries

AbstractWe examine whether an individual's inability to save in the last 12 months affects the extent to which they are concerned about their future financial security and their propensity to plan for retirement. We use an original survey based upon representative samples of working individuals in 16 countries. We show that individuals who were unable to save over the 12-month period prior to the survey are less likely to consider well-being in retirement as their major financial concern. They are also less likely to invest in supplementary pension funds than those who were able to accumulate savings. We provide evidence that these findings are robust under several specifications and are mediated by respondents' perceived income prospects and assessment of their current financial situations.

Current Problems of the Adequacy of Public Pensions in Bulgaria

This article aims to uncover, describe, and analyze existing inconsistencies between the parameters of the Bulgarian public pension system and international adequacy standards applicable to old-age pensions and embedded in Convention No. 102 of the International Labour Organization and the revised European Social Charter of the Council of Europe. The thesis is that the identified gaps, as they relate to the legislative framework but not to actions of national social policy authorities in implementing the legislation, are a result of political decisions that consistently undermine international commitments in the social policy area undertaken by Bulgaria. These decisions weaken important pension policy functions and especially its protection, insurance and distribution functions. The outcomes are higher risk of poverty among the elderly, decline in their economic status after retirement and vulnerability for pensioners during periods of sharp rise in the cost of living. Some issues about the future adequacy of public pensions within the interaction between public state social insurance and supplementary mandatory pension insurance are also discussed.

Readability and Clarity of Individual Pension Product Contracts

The study analyses the readability and clarity of economic specialised texts on supplementary individual pensions. The research includes agreements on individual pension products available on the Polish market at the beginning of 2017. The level of comprehensibility of language has been assessed using the “Jasnopis” application, based, among others, on the FOG index, while the structure of the content of the agreements has been assessed by an expert linguist (the expert linguist is one of the authors of this and a number of other publications on clear and understandable texts). In addition, one of the texts was subject to a survey, the so-called cloze text, which provided more accurate information about readability for a specific reader group. The results obtained allow the conclusion that the language of agreements on individual pension products is very difficult and their understanding requires higher education or expertise in the field of finance.

Contributions Burden on Persons Active in Agriculture in Relation to Pension Aspects

The paper focuses on the area of the burden of contributions to state budget with an emphasis on pension insurance contributions of employees and self-employed persons active in the agricultural sector with regard to the amount of their future retirement pension. The comparison shows that self-employed workers in agriculture contribute to state budget about 2.5 times less than employees with comparable net income. As a result, the level of pensions is insufficient, predominantly for entrepreneurs whose pensions only amount to 39 to 45% of their real net income. On the basis of analysis of results from different models, calculations were made of the necessary monthly contributions to the supplementary pension savings plans that would ensure retirement living standards equivalent to 70% of net income earned during working life. The paper also quantifies redistributive effects by studying pension contributions of persons active in agriculture during their working life and pension withdrawals in retirement. The results are compared with those obtained from a group of employees. Contributions of the self-employed are also compared within the V4 countries. In the conclusion of the paper there are some recommendations that might lead to a reduction in the gap in contributions and better living standards for future old-age pensioners.

Pension reforms in Brazil and the expansion of supplementary pensions

Resumo Este artigo destaca como as reformas previdenciárias produzidas no Brasil desde o final da década de 1990 contribuíram para a expansão dos esquemas privados de previdência complementar. Medidas restritivas e de caráter ambíguo, adotadas por diferentes coalizões de governo no curso dessas reformas, tornaram a previdência pública no Brasil menos atrativa por fixarem limites para o recebimento das aposentadorias dos servidores públicos. Isto promoveu significativas reduções nas taxas de reposição de renda dos benefícios vinculados ao sistema público de repartição. Apoiando-se na literatura sobre mudança institucional e contrariando argumentos path dependence mais rígidos, a análise proposta busca demonstrar empiricamente como essas medidas ajudaram a difundir os fundos de pensão e os planos privados de previdência no Brasil, particularmente entre os grupos com maiores rendimentos, resultando no fortalecimento do pilar privado do sistema previdenciário.

Wider eine verpflichtende Aktienrente – auch Vermögen sichert Wohlstand im Alter

Abstract A compulsory funded supplementary pension scheme is being discussed to prevent the number of retirees relying on tax financed assistance from increasing. The economic reason could be to prevent free-rider behaviour. The article discusses, why this argument is not convincing. Moreover, we argue that often too little attention is paid to possible welfare losses that households suffer if they prefer accumulating assets to provide for old age but are forced to annuitise the capital. Empirical evidence shows that the accumulation of assets plays an important role in household retirement planning. Therefore, it would make more sense to integrate asset accumulation into eligible old age provision instead.

Pension information and women’s awareness

We explore the role of financial and pension information in increasing women’s knowledge and awareness of their future pension status and interest for pension information. We interview a representative sample of 801 Italian working women to assess their knowledge about pensions, financial issues and their own savings. The responses show that their knowledge and awareness of retirement planning is limited. We then run a randomized experiment to evaluate the effect of increased information regarding pensions on women’s awareness, knowledge, and behaviors. Women in the treated group are provided information in the form of three short online tutorials. A follow-up survey shows that these women become more interested and aware of pension schemes and retirement options after completing the tutorials and are more likely to be better informed and keener to obtain further information. When looking at changes in behavior, we find that treated women who are closer to retirement are more likely to believe that they would make different work-life decisions if they received specific pension information in a timely fashion. Middle-aged women are also more likely to have a supplementary pension fund if they are concerned about their standards of living after retirement.

A nationwide skin protection program introduced in hairdressing vocational schools was followed by a decreased risk of occupational hand eczema.

Compliance with glove use and safe work practices are important factors in primary prevention of occupational hand eczema (OHE) in hairdressers. To assess the risk OHE and compliance with skin protective measures in hairdressers trained before and after implementation of a nationwide skin protection program in Danish hairdressing vocational schools in 2011. A repeated cross-sectional study was performed. A questionnaire was sent in 2009 and 2020. The Danish Labour Market Supplementary Pension Scheme provided information on yearly payments from the hairdressing profession. A response rate of 66.6% (305/460) was obtained in the 2009 survey and of 29.9% (363/1215) in the 2020 survey. The career time prevalence of OHE decreased from 42.8% to 29.0% (adjusted odds ratio 0.55 95% confidence interval [CI] 0.40-0.77) and the incidence rate of OHE decreased from 57.5 (95%CI 48.4-68.4) to 42.0 (95%CI 34.6-50.9) per 1000 person years (incidence rate ratio 0.73 [95%CI 0.56-0.95] between the two surveys). A statistically significant (P< .05) increase in glove use when doing wet-work and when handling hair dyes, permanent wave solutions and bleaching products was observed in the 2020 compared to the 2009 survey. Our data suggest that skin protection training during apprenticeship reduces the risk of OHE in hairdressers. The lack of primary prevention of OHE in hairdressing vocational schools may be a missed opportunity in the prevention of the disease.

SEARCH FOR SUSTAINABLE PENSION SYSTEM AND STATE SUPPORT FOR FUNDED PENSIONS IN CEE COUNTRIES

Pension systems around Europe are being reformed for several decades already. Main objectives of the reforms are to enable people to have adequate income at retirement and to ensure the system’s financial sustainability. Many European countries implemented policies aiming at diversification of financing sources of income at older age: risk-sharing between pay-as-you-go and funded pensions is expected to help in achieving social policy objectives towards pension systems. Central and Eastern European countries (CEE) face even more challenges in ensuring adequate income at retirement. First, CEE countries were required to transform radically their economies in 1990s towards market economy, including old age pension systems. Second, in order to ensure diversified future old age pension income and attract more financial means to the system, introduction of funded pensions from scratch and ensuring as wide as possible coverage with funded pension schemes was of primary importance also. The paper discusses latest developments of retirement pension systems in Europe and state involvement in private pension schemes. In doing so, the focus is on the introduction of funded private pension schemes in selected CEE countries. In spite of initially chosen different paths for the reforms, inconsistent state policies towards funded pensions in the CEE countries resulted in similar outcomes of the reforms. The paper starts with discussion on main objectives of pension systems – enabling people to have adequate income at retirement and ensuring financial sustainability of the systems. Further, possibilities to achieve the objectives of pension reforms are analysed – diversification of income at retirement. Third part of the paper discusses prevailing debates on future of welfare state as such and individualisation trends within different European welfare state models. These debates and perceptions of population about responsibilities of a state for individual welfare affect direction of reforms and future shape of old age pension systems. Fourth part of the paper deals with state policies and tools that are used for encouragement of participation in supplementary pensions. Final part of the paper presents more detailed outline of the pension reforms in selected CEE countries and summarises particular challenges of their pension systems. The paper ends with a discussion on policy implications in relation to latest developments of pension systems in CEE countries.

Colorectal cancer and occupational exposure to solar ultraviolet B radiation in Denmark

ObjectivesSolar ultraviolet B radiation (UV) may reduce the risk of cancer, including colorectal cancer (CRC), although the evidence is inconclusive. To contribute with evidence, the present largescale register-based nested case-control study aimed to investigate the association between occupational UV exposure and CRC in Denmark. MethodsThe Danish Cancer Registry was used to identify a total of 12,268 men and women diagnosed with primary CRC before age 70. Five controls matched on year of birth and sex, alive and free of CRC at the time of diagnosis of the index case were randomly selected from The Danish Civil Registration System. Occupational UV exposure was assessed by obtainment of full employment history from the Danish Supplementary Pension Fund Register, which was linked to a job exposure matrix. Conditional logistic regression was used to estimate odds ratios (ORs) with corresponding 95% confidence intervals. ResultsWe observed an inverse association between longer duration of UV exposure and CRC in women (≥20 years: OR = 0.84, 95% CI: 0.69–1.03), while no noteworthy associations were observed in men. When focusing on colon cancer only, longer duration of UV exposure (>20 years: OR = 0.92, 95% CI: 0.83–1.01) and higher cumulative UV exposure (highest exposure category: OR = 0.90, 95% CI: 0.83–0.99) were indicated to lower the risk in the study population including both men and women, although the risk reduction appeared to be more evident for women. No consistent risk patterns were observed for rectal cancer. ConclusionsThe present study suggests a modest protective effect from long-term occupational UV exposure on the risk of colon cancer. The effect may be greater in women and these findings need further attention in future large-scale studies.

Occupational exposure to solar ultraviolet B radiation and risk of prostate cancer in Danish men

ObjectivesFormer epidemiological studies have indicated that solar ultraviolet B radiation (UV) may reduce the risk of prostate cancer, however, the evidence is inconclusive. To contribute with evidence, the present study aimed to evaluate the association between occupational UV exposure and prostate cancer in Danish men. MethodsA total of 12,268 men diagnosed with primary prostate cancer before age 70 were identified via the Danish Cancer Registry. The Danish Civil Registration System was used to randomly select five male controls matched on year of birth, alive and free of prostate cancer at the time of diagnosis of the index case. Full individual-level employment history was retrieved from the Danish Supplementary Pension Fund Register and linked to a job exposure matrix to assess occupational UV exposure. Conditional logistic regression was used to estimate odds ratios (ORs) with corresponding 95 % confidence intervals. ResultsWe observed an inverse association between ever exposure to occupational UV and prostate cancer (OR=0.93, 95 % CI: 0.89–0.97). Longer duration of exposure (≥20 years: OR=0.90, 95 % CI: 0.84–0.96) and highest cumulative exposure (OR=0.90, 95 % CI: 0.84–0.96) were both inversely associated with disease risk. ConclusionsThe present study indicates a modest protective effect from occupational UV exposure on the risk of prostate cancer. This finding needs further attention in future large-scale studies.

Occupational hand eczema reduces career length in hairdressers: a prospective cohort study of Danish hairdressers graduating from 1985 to 2007

BackgroundOccupational hand eczema (OHE) is common in hairdressers, and many leave the trade because of the disease. However, the exact impact of OHE on career length is unknown.ObjectiveTo assess the...

ТЕОРЕТИКО-ПРАКТИЧНІ ЗАСАДИ ФОРМУВАННЯ ФІНАНСОВОЇ ГРАМОТНОСТІ НАСЕЛЕННЯ У СФЕРІ ПЕНСІЙНОГО СТРАХУВАННЯ

In modern conditions, there is an urgent need to form a high level of the population's financial literacy. The development of financial technologies, the digitalization of the modern world, and the widespread use of new financial services require an increase in the level of financial education among the population. The aim of our study is to highlight the importance of financial literacy for ensuring a successful pension insurance reform. The dialectical method of cognition, the method of analysis and synthesis as well as online questionnaires used for conducting research madr it possible to determine main problems in the knowledge system regarding the reform of pension insurance. Developed countries, especially those ones experiencing demographic problems, have started the massive development of the multilevel pension insurance system. Consequently, the issue of enhanced financial literacy has arisen not only in the area of personal finance management at the consumption level, but also in the area of pension savings and their investment. Ukraine has initiated a profound reform in the pension provisions field with the transition to insurance principles. Our citizens should form a clear position on the necessity to participate in the supplementary pension insurance system. According to the results of the survey, slightly more than half of the respondents show their interest in pension reform. But their level of knowledge is not sufficient to understand the basic principles of pension reform and take actions aimed at the accumulation of pension funds. This fact necessitates the formation of financial literacy at three levels. The first level is represented by secondary schools. The technical-vocational education institutions, colleges as well as universities of the second level are supposed to deepen the financial literacy which further should be continued as self-education at the third level of adulthood. Improving financial literacy in the field of pension insurance should result in a high level of cooperation with various financial institutions, including insurance companies, private pension funds, and banking institutions in the field of raising funds for future pension provisions through the skillful and systematic personal finance management.

Investment efficiency of supplementary pension schemes vs macroeconomic factors

Investment efficiency of supplementary pension schemes vs macroeconomic factors