March 2017

13Mar

Is There a Positive Incentive Effect from Privatizing Social Security: Evidence from Latin America

By Truman G. Packard (World Bank) There is increasing concern among policymakers that social security reforms that involve a transition to individual retirement savings accounts may exclude certain groups of workers from coverage against the risk of poverty in old age. While most public pay-as-you-go systems pool the risk of interrupted careers and periods of low earnings over the covered population, the reformed systems shift the burden of these risks to the individual. Adequate coverage under a system of individual...

March 13, 2017
Articles, Labor Market, Regulation, , ,
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February 2017

04Feb

Welfare and Generational Equity in Sustainable Unfunded Pension Systems

By Alan J. Auerbach & Ronald Lee We evaluate several actual and hypothetical sustainable PAYGO pension structures, including: (1) versions of the US Social Security system with annual adjustments of taxes or benefits to maintain fiscal balance; (2) Sweden's Notional Defined Contribution system and several variants developed to improve fiscal stability; and (3) the German system, which also includes annual adjustments to maintain fiscal balance. For each system, we present descriptive measures of uncertainty in representative outcomes for a typical...

February 4, 2017
Articles, Investing, Savings, System Sustainability,
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04Feb

Do Employer Pension Contributions Reflect Employee Preferences? Evidence from a Retirement Savings Reform in Denmark

By Itzik Fadlon, Jessica A. Laird & Torben Heien Nielsen This paper studies how firms set contributions to employer-provided 401(k)-type pension plans. Using a reform that decreased the subsidy for contributions to capital pension accounts for Danish workers in the top income tax bracket, we provide strong evidence that employers' contributions are based on their employees' savings preferences. We find an immediate decrease in employer contributions to capital accounts, whose magnitude increased in the share of employees directly affected by...

February 4, 2017
Articles, Labor Market, Savings,
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04Feb

Private pension funds in Poland

By Lech Keller-Krawczyk This article takes a highly critical look at the pension system in Poland, which had been reformed after 1989 on the basis of the World Bank's 'three pillars' model of a combined state and private, mandatory and voluntary pensions system, despite evidence that the model is flawed and unobjective, being hinged on the inducements of cheaper credits for those countries adopting it. The author relates both the old and new pension systems in Poland, and describes the...

February 4, 2017
Articles, Corporate Governance, Investing, Labor Market,
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04Feb

Retirement delay unified or differentiated: based on the interaction between pension deficit and labor market

By Zou Tieding & Ye Hang The pension deficit has been rapidly enlarging for more than a decade. If the retirement age is set at a low level, it might trigger a pensions crisis. Since the average life span of the Chinese has extended from 71 to 76 years old in last ten years, the feasibility of rising the retirement age has also been promoted. Methods: This paper aims to construct a mathematical model for choosing a proper policy about...

February 4, 2017
Aging, Articles, Labor Market, System Sustainability, ,
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04Feb

Stress Tests for Defined Benefit Pension Plans: A Primer

By Gregorio Impavido Stress testing is a useful and increasingly popular, yet sometimes misunderstood, method of analyzing the resilience of financial systems to adverse events. This paper aims to help demystify stress tests and illustrate their strengths and weaknesses. Using an Excel-based template with institution-specific data, readers are walked through the basics of liability valuation and stress testing of assets and liabilities of a typical defined benefit plan. Full Content: EconBiz

February 4, 2017
Books, Regulation, Supervision, System Sustainability,
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04Feb

What Capabilities Do the New Innovation and Structural Change Policies in Uruguay Require?

By Carlos Bianchi, Guillermo Fuentes, Lucía Pittaluga This paper analyzes three organizations that implement productive development policies in Uruguay: (i) the Dirección Nacional de Recursos Naturales Renovables (National Directorate of Renewable Natural Resources); (ii) sectoral councils; and (iii) the Agencia Nacional de Investigación e Innovación (National Agency of Research and Innovation). Selected cases show that during the past decade, there was a major effort to boost productive development policies in Uruguay and build capabilities for that purpose. The paper also...

February 4, 2017
Articles, Regulation, System Sustainability,
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04Feb

Promised and Affordable Replacement Rates in LAC Pension Systems in 2015 and 2100: Methodology and Determinants

By Solange Berstein, Mariano Bosch & María Oliveri This note, originally prepared as an appendix for the 2016 Development in the Americas Report, Saving for Development, surveys the methodology and assumptions used in the discussion of replacement rates for pension systems in Latin America and the Caribbean. (more…)

February 4, 2017
Adequacy, Articles, Pension design,
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