Voluntary Pension Research Articles

Developing the Scale of Voluntary Pension Fund System at Enterprises in Vietnam

Development of corporate voluntary pension funds at Vietnamese enterprises are contributed to enhancing financial security and the development of the Vietnamese pension system. The research has developed criterias and conducted qualitative and quantitative analysis of available data to evaluating the current status of corporate voluntary pension fund (VPF) development in Vietnam in period 2016- 2022. The research results show that voluntary pension fund assets follow the GDP growth trend but at a higher growth rate; coverage, level of increase in coverage, new participants and new participation fee revenue of the corporate VPF are not significant. From there, limitations have been pointed out, base on, proposing and recommend solutions to developing the scale of voluntary pension fund system at enterprises in Vietnam.

DO PEOPLE SAVE ENOUGH FOR TOMORROW? THE COMPARATIVE STUDY ON WESTERN BALKANS

Due to the increase in life expectancy and the decline in the birth rate, which has an impact on the increase in the proportion of the older population, there is a need to develop a rational pension strategy. This is a behavioral economic analysis of voluntary pension funds in the Western Balkans. The main goal of the research is to determine whether fund users behave according to the well-known Richard Thaler model or have a specific pattern of behavior. According to Thaler’s model, people make financial decisions with limited rationality. They are impatient and short-sighted, which is why they focus on the present rather than the future. Younger employees mainly opt for actions that give them immediate gratification rather than planning for the future. More money flows into pension funds when people are approaching retirement, not when they are in their best working and financial position. Another peculiarity of the Western Balkans is that they have gone through a long period of transition, a period of instability, and that long-term savings were not on the agenda for the average family. The paper is based on a hypothesis that should determine whether users of voluntary pension funds in Western Balkans countries (Serbia, North Macedonia, Montenegro) increase a portion of their salary savings as they approach the retirement period. Analysing the content of the statistical reports collected in the pension funds was used as a method of data collection. A regression analysis was performed to examine the established model. Model creation and calculations were performed in IBM Amos 25 and SPSS 25. A significance level was set to α=0.05 (Hair et al., 2019). The results for Serbia, showed significant values for all three R coefficients. R square values were taken into account. Based on the results, the predictor variable (number of users by age) has significantly explained the variability of “amounts of accumulated funds by age” in all three countries of the Western Balkans. The fund users in all three countries behave similarly, paying significantly higher amounts into the fund after the age of forty. Beneficiaries aged between 20 and 39, members of a very productive labour cohort, pay lower, often symbolic amounts into the pension funds. We are talking about relatively young funds in their infancy, which are unstable or insufficiently stable. A more stable and efficient structure can be observed in the case of Serbian voluntary pension funds.

Phát triển quỹ hưu trí tự nguyện tại các doanh nghiệp Việt Nam

Development of corporate voluntary pension funds at Vietnamese enterprises are contributed to enhancing financial security and the development of the Vietnamese pension system. The research has developed criterias and conducted qualitative and quantitative analysis of available data to evaluating the current status of corporate voluntary pension fund (VPF) development in Vietnam in period 2016- 2022. The research results show that voluntary pension fund assets follow the GDP growth trend but at a higher growth rate; coverage, level of increase in coverage, new participants and new participation fee revenue of the corporate VPF are not significant; the investment portfolio is not yet diverse and the investment return rate of corporate VPF is gradually decreasing each year. From there, limitations have been pointed out, base on, proposing and recommend solutions to develop the corporate VPF system in Vietnam.

Developing the Voluntary Pension Fund at Enterprises in Vietnam from the Perspective of Employers

The paper studies the factors affecting the development of the voluntary pension fund system at enterprises from the employers' perspective. Through a survey of 37 enterprises, the paper clarifies employers' awareness of the importance of voluntary pension funds, the need for enterprises' pension funds, and their willingness to invest in the voluntary retirement fund. The findings show that 78.83% of businessmen believe that developing a voluntary pension fund system is necessary because voluntary pension insurance is a way for employees to protect themselves and their families against risks. 100% of business owners want a voluntary pension fund based on an agreement between the enterprises and employees, while 60% of employers prefer the blended mechanism with government supervision and support. Regarding the level of investment in social insurance and other retirement regimes, 68% of enterprises spend less than 10% of total costs to implement the program; 30% of enterprises use from 10% to 20% of total costs to implement the program. Employers show their prudence when considering a voluntary pension fund at their enterprises. More than 60% of employers concern about the fund security, 24% considers the impact of macro economic factors on the fund performance.

Тенденции изменения архи- тектуры наиболее устойчивых многоуровневых пенсионных систем

The article presents a study of the unfunded (distributive) and funded (accumulative) components in multi-level pension systems in different countries around the world. The existing foreign practices of building pension systems are reviewed. It is proved that high sustainability indicators are achieved in those countries where a combination of the unfunded and funded components is used. The relevance of the topic is conditioned by the accrued problems in the pension sector, largely associated with the aging of the population and low birth rate. To conduct the study, the authors turned to countries with multi-tier, most stable pension systems, such as Denmark, the Netherlands, Australia, Sweden, Canada, New Zealand, Finland and Latvia. As a result, a number of features of the pension systems under consideration were identified. Within the state level of pension systems, the amount of payments depends on various criteria and conditions, the use of which is aimed at making payments more targeted. In countries where occupational pension schemes are developed, participation in them is mandatory for employees and employers. At the same time, voluntary pension schemes are used much less frequently by the population of the countries under study.

Опыт пенсионного обеспечения самозанятых в странах ОЭСР и возможности его применения в России

The processes of destandardization of employment and a reduction in the scope of traditional hired labor, which are actively developing in the modern labor market, create significant problems and imbalances in pension systems, exacerbating the negative impact of demographic factors. In the time of growth in various forms of self-employment, an urgent task of pension policy is to ensure a balance between the interests of the self-employed, standard and non-standard employees and the financial capabilities of the budget; between the sustainability of the pension system and the adequacy of pensions for all participants. The article considers the problems of pension provision for the self-employed in OECD countries and Russia. Various approaches to pension provision for the self-employed, their strengths and weaknesses, associated challenges and risks for pension systems are analyzed. Particular attention is paid to the possibilities of using foreign experience in Russia. There are limited opportunities to pay contributions for the majority of self-employed people and they lack interest in voluntary pension insurance due to the low size of their future pension. Attention is also drawn to the risk of outflow of self-employed people from the registered segment in the event of the introduction of mandatory pension contributions. It is concluded that in present day Russia it is advisable to maintain the voluntary participation of the self-employed in the pension system in combination with increasing motivation to join the long-term savings program by introducing additional preferences for the self-employed, for example, an increase in the terms and share of state co-financing.

Households’ Decision on Capital Market Participation: What Are the Drivers? A Multi-Factor Contribution to the Participation Puzzle

Stock market investments are in the spotlight of the household finance literature, although real-world households make other financial decisions of higher relevance. We widen the scope and include decisions related to, e.g., voluntary pension plans, whole life insurance contracts, and housing and investments in other risky assets than stocks, e.g., bonds or mutual funds. Further, we provide a methodology that goes beyond regression analysis by employing a structural equation analysis (SEA) and apply it on data from a broad and representative survey of the German Central Bank. Our SEA allows us to investigate and quantitatively estimate complex relationships and to test several hypotheses simultaneously. Our structural equation model captures about 60% of the variation in the capital market participation decision. The results show that although households' financial literacy and risk aversion are most strongly related to investments in risky assets, further factors such as wealth, voluntary pension plans and whole life insurance contracts, financial advice, and investment experience should also be considered. Financial literacy is negatively related to risk aversion, i.e., the higher the financial literacy, the lower is the risk aversion. Age and gender are directly related to capital market participation and indirectly via financial literacy and risk attitude.

Developing Voluntary Pension Life Insurance, Aiming to Build a Multi-Pillar Pension System in Vietnam

Vietnam currently does not have a social welfare regime for all workers. The current pension system has different pension regimes (monthly social allowance for the elderly in the social protection policy, pension regime in the form of social insurance and voluntary pension insurance products in the form of commercial insurance). However, the protection scope of the pension tiers is not enough to ensure that all workers have a pension when they reach the end of their working age. To build a multi-pillar pension insurance system, pension insurance products provided by insurance businesses are considered a strategic solution, contributing to reducing the risk of unsustainability of the system, reducing the burden of the social insurance fund, and increasing social security for people. Secondary data collection methods and data analysis methods including descriptive statistical methods, synthesis methods, analysis, comparison, and systematic approaches are used in this study to Analyze and evaluate the current situation of exploiting pension insurance products in the Vietnamese life insurance market. Based on the research results, the authors have proposed several recommendations (for the State, insurance management agencies and insurance businesses) to develop voluntary pension insurance in Vietnam, aiming to build a multi-pillar pension insurance system, ensuring sustainable social security.

Пенсионное страхование как институт социальной защиты населения: состояние, проблемы и перспективы

The article examines the function of pension insurance in the social security system of Russian Federation. The purpose of the article is to determine whether the insurance system is capable of performing its social and economic objectives. The research is based on the analysis of the Russian Federation legislation and scientific works of Russian authors on the development and performance problems of the pension insurance system in Russia. The article studies the main legal provisions of compulsory and voluntary pension insurance in the Russian Federation, examines the main aspects of the compulsory and voluntary pension insurance performance, identifies problem areas, analyzes the dynamics of the earnings replacement rate, considers the factors that negatively impact the interest of citizens in voluntary pension insurance. The author comes to the conclusion that the best option for the development of pension insurance is the joint use of voluntary and compulsory forms of pension insurance.

Investment Performance of Voluntary Pension Funds’ Portfolios

To ensure adequate retirement income it is usually recommended to save „more and for longer periods”. However, this is not enough. Consumers often overlook the importance of long-term returns on retirement investments. At the same time, the Bulgarians award a lower assessment for the market performance of the services „investment products and private personal pensions” compared to the average for the European Union. The present research aims to analyze the investment results of the voluntary pension funds in Bulgaria for the decade, marked by unprecedented low interest rates and pandemic.

The Importance of Health and Social Protection Assets in the Economic Welfare of Households in Mexico

This paper seeks determines how the possession of health and social protection assets affects the probability of a household belonging to a given quintile of a proposed asset ownership index. An ordered logistic regression model was constructed. As a dependent variable, the quintile of each household was used according to the index. This research is based on 48 explanatory variables from the 2020 National Income and Expenses Survey. It confirms that health and social protection assets are relevant in the location of households in a quintile according to its socioeconomic condition. Estimated marginal effects and predictions for every quintile, show that the effect of the assets varies according to the quintile. Ownership of specific assets increase the likelihood of belonging to the higher quintiles. The possession of a voluntary pension fund is the most relevant asset. The empirical results obtained may contribute to design more efficient inequality-reducing public policies by promoting its acquisition and thereby encouraging social mobility. Main limitations of this research are related with the small number of health and social-protection related variables in the survey.

Exploratory on the Social Capital and Private Saving Theories for Integration of Voluntary Contribution to Pension Scheme in Tanzania

The study reviewed two theories, namely Social Capital and Private Saving. Both explain the significance of voluntary contributions to the pension scheme. They used the approaches to offer insights into how voluntary contributions towards social security schemes are built up and their implication to informal sector actors. The study reviewed the social capital and private saving theories’ effect on voluntary pension scheme contributions. The two approaches were critically assessed on their relevance to voluntarily contributing to a pension scheme in Tanzania. They showed to embed important sociocultural attributes such as networks, mutual support, and norms that facilitate cohesive support between actors (individuals and organisations) governed by standards and trust that enable them to pursue shared goals and objectives for mutual benefit. Theories showed an emphasis on workers contributing to a pension scheme for the betterment of their retirement age. This is a critical time since senior citizens cannot continue to work due to old age.

IMPACT OF COVID-19 ON PRIVATE RETIREMENT SAVINGS IN SERBIA

: The outbreak of the COVID-19 pandemic and the related economic downturn have impacted retirement savings, retirement saving schemes, providers, regulators and supervisors, potentially leading to future lower incomes during retirement and significant dysfunctions in the market. The main goal of this paper is to investigate how key indicators of the voluntary pension funds market in the Republic of Serbia were influenced by the Pandemic. The Pandemic certainly had an important effect, and we all had the opportunity to learn first-hand that low frequency high severity events do happen, so they are not only scenarios for a tabletop exercise for something that we should expect but something we need to be prepared for. This goal will be achieved using secondary data such as the data offered by the National Bank of Serbia, OECD Directorate for Financial and Enterprise Affairs, etc. Finally, this paper will present a comparative analysis of the effects of the pandemic on the market of voluntary pension funds in the Republic of Serbia and OECD member countries.

Analiza rada dobrovoljnih penzijskih fondova u Srbiji u 2022. godini

The topic of this paper is the analysis of voluntary pension funds in Serbia in 2022 with the emphasis on the return rate. Introduction of private voluntary pension funds together with the state pension fund is the essence of the pension system reform, and that reform process began in 2005. Generally accepted pension system is a three-pillar system, but introduction of the second pension pillar in our country will not happen anytime soon, and the question is whether it will be introduced at all. The third pillar of the pension system is voluntary and this is its greatest advantage. Voluntary pension system consists of three interconnected processes: payments to the voluntary pension fund, investment of free funds, and programmed payments - pensions. In order to form a valid investment portfolio and achieve a long-term and good return from investments there must be a stable inflow into voluntary pension funds.

Trust in the Financial Performance of Pension Funds, Public Perception, and its Effect on Participation in Voluntary Pension Saving Plans

Trust in the Financial Performance of Pension Funds, Public Perception, and its Effect on Participation in Voluntary Pension Saving Plans

Сучасний стан пенсійного страхування в Україні

The current state of pension insurance in Ukraine constantly requires additional research that would update its development indicators, reveal new trends in its development, justify the feasibility of its reform, and take into account the influence of various factors. The purpose of the study is that based on the assessment of the current state of the pension insurance system in Ukraine, it is necessary to identify the main problems of its development and substantiate practical recommendations on the directions of reforming the social policy of the state regarding pension provision. The compulsory state pension insurance indicators in Ukraine, conducted by the Pension Fund of Ukraine for 2018-2022, were evaluated, which revealed the main trends of development and outlined the main problems. The performance indicators dynamics of non-state pension funds in Ukraine over the past five years has been investigated, trends in the development of accumulative non-state pension insurance have been outlined. The life insurance market in Ukraine is investigated and the voluntary pension insurance indicators are analyzed separately, which provides for the achievement by the insured person of the retirement age determined by the contract. The bank deposits dynamics of households in Ukraine as the potential of additional pension provision of the population is considered. It is proposed to motivate by the state creating corporate non-state pension funds. The practice spread of concluding pension insurance contracts with insurance companies by employers would create an additional source of pension payments and reduce the financial burden on the budget of Ukraine. The existing proposals for reforming pension insurance in Ukraine will contribute to increasing the confidence of the country’s population in both state pension provision and non-state pension insurance.

Investing Pension Savings in Russia: Results and Lessons for the Future

A mandatory savings pillar was added to the Russian pension system in 2002, but by 2022 the Ministry of Finance terminated it and transformed it into voluntary pension savings. Because it was in effect for much less time than the typical life-cycle horizon, mandatory pension savings never had a chance to show its potential for increasing the pension benefits of future pensioners. The successful implementation of a mandatory savings pillar requires that general rules and regulation remain stable over at least a 40-year time horizon for the accumulation phase and a 20-year time horizon for the decumulation or payout phase. In addition to the brevity of its existence, the mandatory savings pillar also faced several other obstacles. The state prioritized the welfare of existing pensioners, and this bias eventually led to the introduction of more and more restrictions on the pension savings pillar and its coverage. Many problems arose in the administration of pension savings and in coordinating the actions of various government departments involved in its regulation. Low investment efficiency for pension savings, irrational asset allocation in non-state pension funds’ portfolios, and poor active management decisions were among other issues. Based on the problems outlined, the authors have formulated basic proposals for the future of the pension savings system

Voluntary Private Pension Funds and Capital Market Development

We examine voluntary private pension funds and their relationship to capital market development. Using data from Turkey, we analyse depth, efficiency and liquidity indicators of capital markets after the introduction of voluntary private pension funds in 2003. Overall, our findings indicate that the introduction of voluntary private pension plans are positively associated with indicators of capital market development, focusing on market depth (such as market capitalisation and trading volume) in both debt and equity markets. We also observe that indicators for other more recently established markets are also positively associated with the introduction of voluntary pension plans. In contrast, equity market turnover shows a negative association. These findings, along with the positive association with the corporate governance index, suggest that pension funds are important for capital market development and for corporate governance of firms as they are long-term investors. However, the introduction of state contributions in 2013 is not robust to alternative specifications.

Инвестиционная деятельность российских негосударственных пенсионных фондов: тенденции, возможности и перспективы

Non-state pension insurance is currently a highly-relevant and rapidly developing form of financial services in the Russian Federation. More and more citizens choose to supplement their state pension with a voluntary pension insurance contract. Non-state pension funds have a great responsibility to preserve and increase the funds of their clients. As a result, they keep looking for new ways to improve their investment strategy. This article features the current trends in the investment policy of Russian non-state pension funds and their development. The research included the methods of statistical and regression analyses, as well as a comparative analysis of the investment portfolios of Russian and foreign non-state pension funds, which revealed the effect of the structure of the investment portfolio on its profitability. Based on the best international practices and the Russian legislation, the main directions of development of domestic non-state pension funds included diversification, sustainable development, asset management companies, etc.

Development of capital pension funds in the Czech Republic and Bulgaria and readiness to implement PEPP

Unfavourable demographic trends are exerting more pressure on public pension systems in all European countries, and the need for alternative sources of pension provision is increasing. Personal pension products can be considered as a possible solution to the problem of providing adequate pensions. The pan-European personal pension product (PEPP) is the first standardised pension product subject to a uniform EU regime. Now that the regulatory framework for PEPP has been established at the EU level, it is up to the Member States to create an appropriate legal environment in order to promote the successful development of PEPP. This article examines the role of voluntary pension funds and the readiness to implement PEPP in the selected countries. We focus on the Czech Republic and Bulgaria, where the role of private pension funds is growing. We examine how PEPP can fit into the national pension systems and make some proposals regarding regulatory measures to be taken in order to ensure that PEPP is not at a competitive disadvantage against national pension products. We find that PEPP may fill the pension gap in countries where public pensions are the main source of retirement income and the role of occupational pension schemes is insignificant.