February 2017

04Feb

Risk of Disability, Old Age and Death: Pension Sustainability in Colombia

By Sergio Clavijo, Alejandro Vera Sandoval, David Malagón, Laura Clavijo, Andrea Ríos Serna, Ekaterina Cuellar & Nelson Vera This document concludes that the sustainability of the RPM (Pay-as-you-go, defined benefits public regime) looks fragile and is threatened by massive transfers from the RAIS (defined contributions private regime) to the RPM. The fiscal deficit of the RPM could be rising from 140% of GDP (in NPV) to 228% of GDP during the next three decades on account of the migration of...

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

Towards Sustainable But Still Adequate Pensions in the EU: Theory, Trends and Simulations

By Juraj Draxler & Jorgen Mortensen This report is a summary of the research project on the 'Adequacy and Sustainability of Old-Age Income Maintenance' (AIM). Thirteen institutes from across the EU have collaborated on the task of assessing the situation of today’s pensioners and providing insights into future trends and policy options for securing adequate income for EU pensioners. The AIM project produced several state-of-the-art additions to the debate on EU pension reforms. Among others, the National Institute of Economic and...

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

The Performance of Social Security Contributory and Tax-Financed Pensions in Central America, and the Effects of the Global Crisis

By Carmelo Mesa-Lago Sr. Over the last 30 years, Latin America has pioneered structural pension reforms. This article focuses on a representative regional sample of seven Central American countries with diverse levels of development (Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) studying contributory and tax-financed pensions as well as recent pension reforms. It comparatively assesses system performance regarding five social security principles: unity; universal coverage; adequacy of benefits; equal treatment, solidarity and gender equality; and financial sustainability....

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

Benchmarking Retirement Income Systems Around the World: Which Countries Rank Highest and Why?

By David Knox The variety of retirement income systems around the world is great, with varying dependencies on public-sector pensions, funded private pensions, and savings outside these formal systems. But which are producing the best outcomes? And which are sustainable into the future, as many countries face the effects of a significantly aging population? The Melbourne Mercer Global Pension Index considers more than 40 indicators in calculating an index value for the systems in 16 countries covering more than half...

February 4, 2017
Articles, Corporate Governance, System Sustainability
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04Feb

How Should the Adequacy of Pension Coverage Be Balanced Against Financial Sustainability?

By Krzysztof Hagemejer & John Woodall In recent decades many countries have “reformed” their contributory pension schemes, generally strengthening the links between benefit entitlements and the contributions paid over members’ working lifetimes, but primarily seeking to (re)balance them financially, in the face of strains arising from unfavourable labour market or demographic conditions. The result has been reduced benefit entitlements and levels of coverage, however assessed. The impact has been felt, particularly, by those with shorter, broken careers (due for example...

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

Adequacy, Fairness and Sustainability of Pay-as-You-Go-Pension-Systems: Defined Benefit Versus Defined Contribution

By Jennifer Alonso-García, María el Carmen Boado-Penas & Pierre Devolder There are three main challenges facing public pension systems. First, pension systems need to provide an adequate income for pensioners in the retirement phase. Second, participants wish a fair level of benefits in relation to the contributions paid. Last but no least, the pension system would need to be financially sustainable in the long run. In this paper, we analyse defined benefit versus defined contribution schemes in terms of adequacy,...

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

Can Low Income Countries Afford Basic Social Protection? First Results of a Modelling Exercise

By Karuna Pal, Christina Behrendt, Florian Leger, Michael Cichon & Krysztof Hagemejer This report presents the methodology and the results of a modelling exercise that demonstrates that basic social protection benefits are not out of reach for low-income countries in Sub-Saharan Africa, even though some international assistance would be necessary for a transitory period. The Social Protection Sector of the International Labour Organization (ILO) has estimated the cost of basic social protection benefits education, health, pensions) for a selected number...

February 4, 2017
Articles, Pension design, System Sustainability, ,
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04Feb

The Rise of Pension Fund Capitalism in Europe: An Unseen Revolution?

By Adam Dixon In recent years European countries have begun to reform their pension systems favouring funded to pay-as-you-go (PAYG) social security systems and supporting the creation of more 2nd and 3rd pillar funded retirement schemes. Though funded pensions remain small in most European countries, they are growing significantly and may limit the persistence of strong 'varieties of capitalism' by providing an endogenous source of change to economic organisation and corporate governance. To explore this scenario this article examines recent...

February 4, 2017
Articles, Corporate Governance, Investing, System Sustainability, ,
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03Feb

The FinTech Opportunity

By Thomas Philippon This paper assesses the potential impact of FinTech on the finance industry, focusing on financial stability and access to services. I document first that financial services remain surprisingly expensive, which explains the emergence of new entrants. I then argue that the current regulatory approach is subject to significant political economy and coordination costs, and therefore unlikely to deliver much structural change. FinTech, on the other hand, can bring deep changes but is likely to create significant regulatory...

February 3, 2017
Articles, Labor Market, System Sustainability, ,
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03Feb

Austerity, ageing and the financialisation of pensions policy in the UK

By Craig Berry This article offers a detailed analysis of the recent history of pensions policy in the United Kingdom, culminating in two apparent `revolutions' in policy now underway: the introduction of `automatic enrolment' into private pensions, and proposals for a new `single-tier' state pension. These reforms are considered exemplary of the `financialisation' of UK welfare provision -- typified in pensions policy by the notion that individuals must take personal responsibility for their own long-term financial security, and engage intimately...

February 3, 2017
Articles, Pension design, Regulation, System Sustainability,
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