Trends in Pension Benefit Formulas and Retirement Provisions
In: NBER Working Paper No. w3744
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In: NBER Working Paper No. w3744
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Using the fact that the Spanish self-employed voluntarily choose their contributions to Social Security, I study the effect of financial incentives on public pension savings for self-employed workers in Spain. For this, I implement a difference-in-differences approach exploiting the change in public pension saving incentives induced by the 1997 pension reform. I find that the Spanish self-employed significantly respond to the financial incentives for public pension savings. However, the estimated response could be considered modest relative to the magnitude of the return to contributions provided by pension formulas in Spain. I provide evidence suggesting that the lack of salience of the return to contributions could be one of the main drivers of such a modest response, highlighting the importance of information and salience on the responsiveness of self-employed workers to saving incentives.
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Using the fact that the Spanish self-employed voluntarily choose their contributions to Social Security, I study the effect of financial incentives on public pension savings for self-employed workers in Spain. For this, I implement a difference-in-differences approach exploiting the change in public pension saving incentives induced by the 1997 pension reform. I find that the Spanish self-employed significantly respond to the financial incentives for public pension savings. However, the estimated response could be considered modest relative to the magnitude of the return to contributions provided by pension formulas in Spain. I provide evidence suggesting that the lack of salience of the return to contributions could be one of the main drivers of such a modest response, highlighting the importance of information and salience on the responsiveness of self-employed workers to saving incentives.
BASE
Using the fact that the Spanish self-employed voluntarily choose their contributions to Social Security, I study the effect of financial incentives on public pension savings for self-employed workers in Spain. For this, I implement a difference-in-differences approach exploiting the change in public pension saving incentives induced by the 1997 pension reform. I find that the Spanish self-employed significantly respond to the financial incentives for public pension savings. However, the estimated response could be considered modest relative to the magnitude of the return to contributions provided by pension formulas in Spain. I provide evidence suggesting that the lack of salience of the return to contributions could be one of the main drivers of such a modest response, highlighting the importance of information and salience on the responsiveness of self-employed workers to saving incentives.
BASE
Using the fact that the Spanish self-employed voluntarily choose their contributions to Social Security, I study the effect of financial incentives on public pension savings for self-employed workers in Spain. For this, I implement a difference-in-differences approach exploiting the change in public pension saving incentives induced by the 1997 pension reform. I find that the Spanish self-employed significantly respond to the financial incentives for public pension savings. However, the estimated response could be considered modest relative to the magnitude of the return to contributions provided by pension formulas in Spain. I provide evidence suggesting that the lack of salience of the return to contributions could be one of the main drivers of such a modest response, highlighting the importance of information and salience on the responsiveness of self-employed workers to saving incentives.
BASE
Using the fact that the Spanish self-employed voluntarily choose their contributions to Social Security, I study the effect of financial incentives on public pension savings for self-employed workers in Spain. For this, I implement a difference-in-differences approach exploiting the change in public pension saving incentives induced by the 1997 pension reform. I find that the Spanish self-employed significantly respond to the financial incentives for public pension savings. However, the estimated response could be considered modest relative to the magnitude of the return to contributions provided by pension formulas in Spain. I provide evidence suggesting that the lack of salience of the return to contributions could be one of the main drivers of such a modest response, highlighting the importance of information and salience on the responsiveness of self-employed workers to saving incentives.
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In: Acciones e investigaciones sociales, Heft 9, S. 157
ISSN: 2340-4507
Los planes de pensiones y de jubilación son dos fórmulas diferentes que tratan de cubrir las necesidades económicas, que se plantean tras la reducción de los ingresos que se producen como consecuencia de la jubilación para la mayoría de las personas. La opción por una u otra fórmula de ahorro por parte del ciudadano está en la mayoría de los casos motivada principalmente, aunque no únicamente, por el tratamiento fiscal que tiene una y otra fórmula de inversión
In: Compensation and benefits review, Band 45, Heft 6, S. 350-356
ISSN: 1552-3837
The Public Employee Pension Reform Act became effective in 2013. It will take many years before it has a meaningful impact on pension plan underfunding due to the so-called California Rule under which public employees are guaranteed the pension benefits in force on the date of hire. Meanwhile, three California cities have filed for Chapter 9 bankruptcy and more will follow. In an effort to annul the California Rule, and allow employers to change benefit accruals prospectively, the mayors of San Jose and four other cities have sponsored an initiative to amend the California constitution to allow public employers to alter pension benefit formulas prospectively. This article appraises these several developments and their interaction.
In: U.S. news & world report, S. 44-46
ISSN: 0041-5537
Examines disability pension reform undertaken in the context of political and economic transformation in three Eastern European countries during the 1990s. Explores how policy makers have modified various components of disability policy - eligibility criteria, benefit formulas and levels, work incentives and support for vocational rehabilitation - in response to changing labour markets and economic conditions. Also describes approaches to disability pension reforms in three Western European countries
In: FaMa-Diskussionspapier, Band 2/2012
Amidst the backdrop of a fundamentally changed socio-political strategy within the German pension system towards a strengthening of private pension schemes, in Germany the principles of pension adjustments have attracted a great deal of public attention. In this context, the paper presents a relatively simple adjustment formula with an intrinsic distributional com-ponent.
On the basis of the new formula, sensitivity studies concerning the well-being of the elderly in Germany are performed, and these results are compared to the well-being of other German age groups. The corresponding sensitivity analyses vary due to the parameters of the new formula, and, additionally, they are related to alternative pensions' adjustment formulas in order to compare the diverging consequences of several formulas and their different underlying "philosophies". The micro-data used is from the German Socio-Economic Panel (SOEP) 1984-2010.
Since 1947, the Vietnam Social Security (VSS) has provided social insurance to public servants and armed forces personnel in Vietnam. In 1995, the Government merged the social insurance unit of the Ministry of labour, invalids and social affairs with that of the Vietnam General Confederation of labor. At the same time the system became mandatory to the employees of the newly developing private sector. The consolidated system is publicly managed by the VSS administration. VSS collects contributions and pay social insurance benefits (in case of sickness and sick leaves, maternity and family planning related leaves, work injury and professional disease, survivorship and to people that reached pension ages). This paper investigates this issue by reviewing the characteristics of employment in Vietnam. It concludes that the risk that social coverage remains limited for many years is high and, presents accordingly some policy options to augment VSS's chances to reach universal coverage in the future.
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In: Canadian journal of administrative sciences: Revue canadienne des sciences de l'administration, Band 16, Heft 3, S. 256-266
ISSN: 1936-4490
AbstractIn this paper we present a solution to the problem of pricing guarantees of minimum returns on pension fund contributions. These guarantees exist by law in a number of countries and their use is increasing as a result of a worldwide trend toward privatizing social security and pension fund management. The solutions are based on a discrete martingale approach. We show that the common type of guarantee on contributions to pension funds is equivalent to an option to exchange. Using a discrete martingale framework and a binomial solution, we develop all aspects of this model necessary for its practical application in the context of the pension fund guarantees. Binomial formulas are obtained for two forms of guarantees, one without and one with a ceiling.RésuméCet article présente une solution au problème d'évaluation de la garantie d'un rendement minimum qui fait partie des conditions de certains régimes de rentes. De telles garanties sont légalement obligatoires dans certains pays, mais leur utilisation va en augmentant suite à la tendance mondiale vers la privatisation de la ges‐tion des caisses de retraite et des caisses de sécurité sociale. L'article utilise une technique de martingale en temps discret pour montrer que le type de garantie le plus répandu équivaut à une "option d'échange". De plus, en adoptant une solution binomiale dans le cadre de la martingale en temps discret on développe tous les aspects du modèle d'évaluation de la garantie néces‐saires pour sa mise en application auprès des régimes de rente. Les formules binomiales obtenues s'appliquent à des garanties avec ou sans plafond.
In: Regulation & governance, Band 17, Heft 3, S. 644-657
ISSN: 1748-5991
AbstractThe likelihood that longevity will continue to increase has generated a search for regulation that make people work longer as they live longer, and thus not just containing pension expenditure but also enlarging labor supply, economic growth, and tax revenue. In public pension policy, Nordic countries have led the world with three types of approaches aimed at making people retire later. The first came when Sweden, followed by Finland and Norway, installed life expectancy coefficients in benefit calculation formulas. The second followed as Finland introduced age‐related accrual rates and the third when Denmark indexed the pensionable age to developments in life expectancy. Since economic incentive‐based regulations failed to raise exit ages sufficiently, Finland and Sweden subsequently linked pensionable ages to life expectancy like Denmark. While this policy brings out inequalities in health and workability, the fact that countries found it necessary to index the pensionable age to longevity instead of just relying on economic incentives in regulating retirement behavior may hold lessons for other countries.
This book develops the underlying mathematical framework to combine investment with the uncertainty of mortality. The results, formulas and examples should also help retirees better manage their financial affairs, in addition the instructors teaching their material to the next generation of financial advisors