The Practice of Pension Funds Bankruptcy and Corporate Pension Programs Liquidation

in the article the world practice of control over the activities of private pension funds is investigated. The principles of international pension regulators are analyzed. The methods of bankruptcy of pension funds are revealed. The features of liquidation of corporate pension programs are emphasized. A number of practical examples of the termination of the activity of pension plans are indicated. Differences in the procedures for completing professional pension plans and individual pension schemes are balanced. Conclusions and recommendations are given for national supervisors to improve pension systems.

Some problems of reforming the pension system in Ukraine

The article, based on the analysis of the past stages of reforming the pension system, current pension legislation and law enforcement practice in this area, considers the problems and prospects of reforming the pension system in Ukraine. Conclusions were made and separate proposals were made on the need for a comprehensive approach to the process of reforming the pension system in Ukraine in order to establish a decent level of pension provision for citizens and guarantee the implementation of pension rights. Emphasis is placed on the need for legal regulation of the pension system at the level of law in accordance with the provisions of Article 92 of the Constitution of Ukraine and the termination of the practice of administrative regulation. The necessity of improving the solidarity pension system (pay-as-you-go) in the direction of establishing international legal standards for determining the amount of pension, simplifying the procedure for its appointment, increasing the role of insurance experience is substantiated. There are reservations about the possibility of introducing a funded pension system due to the negative experience of other states and the lack of a properly developed system of state guarantees for the stability of such a system. The importance of protecting a certain category of people from occupational risks in the work environment has been proven by introducing mandatory pension insurance through occupational and corporate pension funds. Conceptual issues of pension provision are perhaps the most relevant in modern Ukrainian society and in the world as a whole. At the same time, pensioners in Ukraine remain one of the most vulnerable social groups. The level of poverty remains high among people of retirement age due to the low level of pension provision, which indicates the need for further systematic improvement of pension legislation, which, on the one hand, would establish a decent level of pension provision, and on the other – guarantee citizens access to pension rights. Key words: reform, pension, joint pension system, accumulative pension system, Pension Fund.

What is the Return Rate of a Corporate Pension Scheme? Generalized Annuity Factors Simplify Calculation

Corporate pension schemes are widely spread especially in Northern Europe, North America, Japan. Often the major portion of defined contributions to the scheme is shouldered by the employer. A crucial question for an employee is, whether the return from his/her corporate pension plan - taking into account the corporate engagement and eventually governmental savings promotion - is favourable in comparison to other capital products for the time of retirement. This question is not answered by the absolute return in form of the future pension amount. Additionally, the employee must know the relative return, the Pension Rate of Return (PRR), in relation to what he/she has invested in form of employee contributions into the pension plan during his/her work life. Focussing on better pension information and also on counteraction to melting interest return, two current topics will be addressed. A very useful evaluation instrument for this task is the Generalized Annuity Factor (GAF). It is a generalization of the well-known Annuity Factor, which is restricted to constant payments only. With GAF any time dependent payments, e.g. linear or more complex nonlinear payments over time can be valued by a compressed closed-form formula in the same manner as constant payments by the classic Annuity Factor. Pension payments regarding mortality are such complex payments depending systematically on age. Because of its computational efficiency the new instrument simplifies calculations to be done also in smaller funds, firms or public services with common spreadsheet programs.