HOW DOES THE PENSION SYSTEM IN POLAND PREVENT OLD-AGE POVERTY?

Old Age Pensions

10.1093/oso/9780198817055.003.0010 ◽

2018 ◽

Author(s):

Pierre Pestieau ◽

Mathieu Lefebvre

Keyword(s):

Old Age ◽

Pension System ◽

Labour Force ◽

Labour Force Participation ◽

Population Ageing ◽

Pension Systems ◽

Demographic Challenges ◽

Old Age Poverty ◽

Future Outcomes ◽

Social Security Benefits

This chapter gives an overview of the type of pension system existing in Europe. Contributive and redistributive systems are opposed but the chapter shows that pension systems are more often a mix of both. The chapter shows how these systems have been more or less effective in tackling old age poverty in most countries and it points to the main challenges that these systems are facing, namely population ageing and low labour-force participation. The major reforms that have been implemented to ensure future sustainability of pension systems are presented but a number of additional changes that should be implemented are discussed. The chapter also presents projections for future outcomes and the link between demographic challenges and social security benefits is highlighted.

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Drohende Altersarmut – neue Aufgaben für die Rentenversicherung?

Zeitschrift für Wirtschaftspolitik ◽

10.1515/zfwp-2012-0204 ◽

2012 ◽

Vol 61 (2) ◽

Keyword(s):

Life Expectancy ◽

Old Age ◽

Equivalence Principle ◽

Pension System ◽

The Elderly ◽

Pension Scheme ◽

Pension Insurance ◽

Poverty Risk ◽

Employment Trajectories ◽

Old Age Poverty

AbstractOliver Arentz and Steffen Roth state that poverty among the elderly is currently an exception in Germany. Nevertheless, it is foreseeable that future pensioners will have less income and assets at their disposal. Reasons are the effects of the demographic change to the pay-as-you-go pension scheme, gaps in employment biographies and low pay employment. With that in mind, they discuss the reform package advocated by the Federal Ministry of Labour and Social Affairs. Furthermore they derive guidelines for a sustainable reform of the pension schemes.Bert Rürup also argues that poverty in old age is up to now not a relevant social problem in Germany. Nevertheless, there are clear indications that poverty among the elderly will increase in the future due to a bundle of reasons. Because of this there is no silver bullet to solve this problem. In the conception of an adequate strategy to reduce and to prevent a rise of poverty in old age, however, the equivalence principle as the basic principal the German statutory pension scheme has to be questioned critically.Jan Goebel gives an overview of the current development of old-age poverty in Germany and classifies widely discussed concepts for the reform of statutory pension insurance. Although current indicators generally point to an increase in old-age poverty, the empirical data show no growth at present in poverty risk for persons aged 65 and older. However, it is expected that the income position of older people will be worsen due to the declining pension payments of new retirees and the increase in discontinuous employment trajectories as well as the insufficient spread in private old age provision. One of the reforms discussed for preventing rising poverty risks in old age is to consider life expectancy in the pension formula. This appears to be a promising means of reducing inequality within the group of pensioners, he states. The implicit redistribution within the statutory pension system due to the empirically well-known correlation between living standards and life expectancy will decrease, and the equivalence principle can be strengthened.

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Drohende Altersarmut – neue Aufgaben für die Rentenversicherung?

Zeitschrift für Wirtschaftspolitik ◽

10.1515/zfwp-2012-0207 ◽

2012 ◽

Vol 61 (2) ◽

Author(s):

Jan Goebel

Keyword(s):

Life Expectancy ◽

Old Age ◽

Pension System ◽

Living Standards ◽

Pension Insurance ◽

Poverty Risk ◽

Employment Trajectories ◽

Old Age Poverty ◽

Pension Payments ◽

Old Age Provision

AbstractThe article gives an overview of the current development of old-age pover ty in Germany and classifies widely discussed concepts for the reform of statutory pension insurance. Although current indicators generally point to an increase in old-age poverty, the empirical data show no growth at present in poverty risk for persons aged 65 and older. However, it is expected that the income position of older people will be worsen due to the declining pension payments of new retirees and the increase in discontinuous employment trajectories as well as the insufficient spread in private old age provision.One of the reforms discussed for preventing rising poverty risks in old age is to consider life expectancy in the pension formula. This appears to be a promising means of reducing inequality within the group of pensioners. The implicit redistribution within the statutory pension system due to the empirically well-known correlation between living standards and life expectancy will decrease, and the equivalence principle can be strengthened.

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Public Pension Generosity and Old-Age Poverty in OECD countries

Journal of Social Policy ◽

10.1017/s0047279421000544 ◽

2021 ◽

pp. 1-20

Author(s):

KATI KUITTO ◽

JOAN E. MADIA ◽

FEDERICO PODESTÀ

Keyword(s):

Old Age ◽

Pension System ◽

Welfare States ◽

Public Pension ◽

Variable Approach ◽

Working Age ◽

Old Age Poverty ◽

Pension Benefits ◽

The Relationship

Abstract Pension adequacy is gaining importance as old-age poverty remains a pressing problem. In many advanced welfare states, the population is ageing rapidly and recent pension reforms have led to cuts in public pension provision. There are, however, few comparative longitudinal studies on the relationship between pension generosity and old-age poverty. This study provides a comparative empirical assessment of how the prevalence and depth of old-age poverty relates to generosity of public pension benefits in 14 advanced OECD welfare states from 1980-2010. We focus on the role of mandatory public pension provision of mainly first tier schemes that grant the major share of retirees’ income in most countries. We use data on theoretical pension replacement rates for retirees who had different working-age incomes. In order to address endogeneity issues, we adopt an instrumental-variable approach. Our main finding shows that pensions systems and earnings-related schemes, in particular, are quite efficient in reducing the risk of old-age poverty. Yet they still do very little to alleviate poverty among those pensioners in the most disadvantaged situations. We also found that redistribution within the pension system does not substantially contribute to poverty alleviation.

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The transition to a multi-pillar pension system: the inherent socio-economic anomaly

Journal of Financial Economic Policy ◽

10.1108/jfep-07-2020-0162 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Ishay Wolf ◽

Jose Maria Caridad y Ocerin

Keyword(s):

Income Inequality ◽

Old Age ◽

Pension System ◽

Economic Loss ◽

Pension Scheme ◽

Total Contribution ◽

Content Type ◽

Pension Systems ◽

High Earning ◽

Minimum Pension

Purpose This paper aims to analytically show that in an over-lapping-generation (OLG) model, low earning cohorts bear unwanted risk and absorb higher economic cost than high earning cohorts do. Design/methodology/approach This paper aims to consider the individual's risk appetite, using a simple utility function, based on consumptions and discount rates in each period. This paper calibrates the model according to teh Israeli pension system as a representative of a small open developed organization for economic cooperation and development country. Israel is considered as unique case study in the pension landscape, as it implements almost pure defined contribution pension scheme with continuous trend of pension market capitalization (Giorno and Jacques, 2016). Hence, this study finds Israel suitable for examining the theoretical mix of pension scheme. That model enables exploring combined solutions for adequate old age benefits, involving the first and the second pension pillars, under fiscal constraints. Findings It comes out that for risk-averse individuals, the optimal degree of funding is negatively correlated to asset returns' volatility and positively correlated to earning decile level. The neglect of risk and individual's current earning level will thus overstate the contribution level and funded percentage from total contributions. Moreover, even in an economy with minimum government intervention, and highly developed private pension fund with high average of rate of return, the authors find it is optimal that the pension system contains a sizeable unfunded pillar. This paper innovates by revealing a socio-economic anomaly in design of mix pension systems in favor of high earning cohorts on the expense of economic loss of low earning cohorts. Practical implications The model presented in this paper could be implemented in countries with mix pension systems, as an alternative to public social transfers or means tested, alleviating poverty and inequality in old age. Additionally, this model could raise the public awareness of the financial sustainability of the unfunded pay-as-you-go pillar to diversify financial risk in pension systems, especially for low earning cohort in society. Social implications One area of research that is particularly relevant in this context concerns the issue of alleviating poverty and income inequality. It is often stressed that the prevention of old age poverty is among the central targets of well-designed pension system (Holzmann and Hinz, 2005). The conceptualization of minimum pension guarantee used in this composition allows to clearly capturing the notion of such a poverty and social targets as an integral part of the pension system rolls. Originality/value This paper innovates by revealing a socio-economic anomaly in design of mix pension systems in favor of high earning cohorts on the expense of economic loss of low earning cohorts. That comes to realize through the level of total contribution rates and funded share that are generally optimal for high earning cohorts but not for low earning cohorts. This paper identifies that the effect of anomaly is most significant in a market characterized with high income-inequality level. This paper finds that imposing intra-generational risk sharing instrument in the form of minimum pension guarantee can re-balance pension design among different earning cohorts. This solution demonstrates balancing effect on the entire economy.

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De pensioenbescherming van flexibele werknemers in België

Tijdschrift voor Arbeidsvraagstukken ◽

10.5117/2006.022.002.008 ◽

2006 ◽

Vol 22 (2) ◽

Author(s):

Annelies Debels ◽

Hans Peeters ◽

Gert Verschraegen ◽

Jos Berghman

Keyword(s):

Statistical Analysis ◽

Old Age ◽

Pension System ◽

Panel Study ◽

Research Strategy ◽

The Third ◽

Temporal Flexibility ◽

Part Time ◽

Coordinated Regulation ◽

Pension Benefits

Old age protection of flexible workers in Belgium Old age protection of flexible workers in Belgium This article investigates to what extent the Belgian pension system is adapted to the proliferation of a-typical forms of employment. Are there any differences between the old age protection of flexible and non-flexible workers? What are the effects of flexible employment on participation in the three pension pillars and on the level of pension benefits? To answer these questions, the article pursues a double research strategy: an analysis of Belgian legislation and relevant collective labour agreements is complemented with a statistical analysis on the Panel Study of Belgian Households (PSBH). The analyses show that part-time employment results in a lower pension, while other forms of temporal flexibility such as temporary leave arrangements and temporary unemployment do not. In the second pillar we find that contractual and transitional flexible workers are discriminated. Finally, the results indicate that flexible workers do not compensate for lower pension protection through increased participation in the third pension pillar. Our findings suggest that a re-assessment of the system of ‘assimilated’ periods is required, as well as the development of a system of coordinated regulation for the three pension pillars.

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