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Welfare Reform on the Web (January 2011): Pensions - overseas

Coping with Spain's aging: retirement rules and incentives

M. Catalan, J. Guajardo, and A. W. Hoffmaister

Journal of Pension Economics and Finance, vol. 9, 2010, p.549-581

This paper evaluates the macroeconomic and welfare effects of extending the averaging period used to calculate pension benefits in a pay-as-you-go system. It also examines the complementarities between reforms extending the averaging period and those increasing the retirement age under alternative tax policies. The analysis applies a model in the Auerbach-Kotlikoff tradition to the Spanish economy. Extending the averaging period to the entire work life maximizes long-run welfare and limits expenditure pressures at the peak of the demographic shock as much as increasing the retirement age in line with life expectancy. Moreover, during the demographic transition, pension reforms induce intertemporal labour substitution effects that engender aggregate labour cycles.

The future of pensions policy in Europe

P. Askins

Pensions, vol. 15, 2010, p. 345-248

This paper is an attempt to explore the issues faced across Europe as a whole in making financial provision for an increasingly ageing population. It considers four major influences affecting pension provision: longevity, the Baby Boom generation, regulation and supervision, and the continuing impact of globalisation.

Non-take up of social benefits in Greece and Spain

M. Matsaganis, H. Levy and M. Flevotomou

Social Policy and Administration, vol. 44, 2010, p. 827-844

There is little research evidence on how means-tested social safety nets for older people are affected by non-take up. This paper aims to fill part of the gap by presenting estimates of non-take up of means-tested benefits for older people in Greece and Spain in 2004. Two types of benefits are examined: 1) supplements to contributory pensions put in place to ensure a minimum level and 2) social pensions for older people lacking adequate contributions to pension schemes as well as having insufficient income. Results show that non-take up of these means-tested retirement benefits is quite extensive.

Overhaul of the French pension system

E. Ries and I. Rous-Duval

European Pensions, Oct. 2010

Under the controversial reform of the French pension system, the early release retirement age (currently 60, provided the individual has made pension contributions for 162 semesters) would be progressively raised to 62 by 2018, increasing by four months each year from July 2011. The duration of pension contributions will also be progressively increased. From January 2012 it would be necessary to make pension contributions for 41 years (164 semesters) to be eligible to receive a full pension.

The Republic of Ireland: a young country, but is it young enough to avoid future problems in public pensions?

L.F. Agudo and M.A. Garcia

Pensions, vol. 15, 2010, p. 259-267

The Republic of Ireland enjoys a relatively young population, a comparatively high birth rate, positive migration and population growth. These characteristics could lead to the conclusion that the country will not experience problems sustaining its public pension system. However, the demographic structure is changing, and forecasts suggest that the country will experience population ageing in the long term (around 2050). This study demonstrates that, given the current characteristics of the Irish public pension system, reforms will be needed to ensure its long term viability.

The reform of some European public pension systems: Spain, Italy and Sweden: a breakthrough?

L.F. Agudo and M.A. Garcia

Pensions, vol. 15, 2010, p. 297-304

The viability of European public pension systems established as part of a welfare state has been thrown into doubt by population ageing, increased longevity, and earlier retirement. They are now in urgent need of reform, generating intense debate. This article analyses the pension systems of Spain, Italy and Sweden and the reforms which they have introduced or are attempting to introduce.

South African social security and retirement reform: a long journey towards redrafting of the new Pension Funds Act

L. Nevondwe

Pensions, vol.15, 2010, p. 287-296

The South African Pension Funds Act currently in force was passed in 1954 in the Apartheid era and is in urgent need of reform. The government published a first discussion paper on retirement reform in 2004 and a second in March 2007. Proposals in the second discussion paper include a wage subsidy, a state old-age grant for all, mandatory contributions to the National Social Security Provident Fund, mandatory participation in occupational or individual pension schemes, voluntary additional contributions to these, reform of the governance and regulation of the pension industry, and reform of the taxation system. The proposals were intended to be implemented in 2010, but this is impossible as a promised third discussion paper has not appeared. This article considers what lessons South Africa can learn from Chile, Sweden and Nigeria about pension reform.

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