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Welfare Reform on the Web (October 2002): Pensions - Overseas

ARE THERE POSITIVE INCENTIVES FROM PRIVATISING SOCIAL SECURITY? A PANEL ANALYSIS OF PENSION REFORM IN LATIN AMERICA

T G Packard

Journal of Pension Economics and Finance, vol. 1, 2002, p. 89-109

Article looks at whether the transition from a public pay-as-you-go pension system to one with private individual retirement accounts has increased the percentage of the work force covered in 18 Latin American countries. Results indicate that the introduction of individual defined contribution accounts improved coverage gradually over time.

EARLY RETIREMENT REFORM: CAN IT AND WILL IT WORK?

H P van Dalen and K Henkens

Ageing and Society, vol. 22, 2002, p. 209-231

Reforms of early retirement schemes in the Netherlands mean that pensions will be financed on a more actuarially neutral basis, that is, benefits will be strictly related to contributions made. On the basis of a labour market and a population survey, article examines early retirement intentions of older Dutch workers under alternative policies. Concludes that the early retirement schemes' reform may lead to a substantial delay of the retirement date, but in practice factors other than financial incentives are at work.

HOW WELL DOES A PARTNERSHIP IN PENSIONS REALLY WORK? THE ISRAELI PUBLIC/PRIVATE PENSION MIX

J Gal

Ageing and Society, vol. 22, 2002, p. 161-183

Since its emergence in the 1950s, the Israeli old age pension system has been based on a mix of low universal state pensions and a very significant state-supported but privately-funded system of income-related occupational pensions and long-term savings schemes. This structure has contributed to a reduced level of state expenditure on pensions in comparison with other welfare states. However it has failed to encourage savings for old age among the working population and to ensure that retired people can maintain an acceptable standard of living. Extremely high poverty levels among older people reflect both low state benefits and the fact that the majority don't have an occupational pension.

INCENTIVES TO RETIRE LATER: A SOLUTION TO THE SOCIAL SECURITY CRISIS?

F Breyer and M Kifmann

Journal of Pension Economics and Finance, vol. 1, 2002, p. 111-130

An increase in the retirement age is a popular option for solving the crisis in unfunded pay-as-you-go pension systems which has arisen due to increased longevity. It is argued that strengthening the link between retirement age and benefit level would induce workers to retire later. However analysis shows that where the pay-as-you-go system is earning a lower rate of internal return than a funded system, changing incentives so as to delay payments to individuals can very easily lead to an increase in the payroll tax required to fund the system. Suggests that partial funding can help ameliorate the cost problems associated with reforming early retirement.

THE SPANISH PUBLIC RETIREMENT PENSIONS SYSTEM: PRINCIPAL CHALLENGES AND RECENT DEVELOPMENTS

F B Angel

International Social Security Review, vol. 55, July-Sept 2002, p. 57-72

During the 1990s a broadly endorsed analysis was carried out of the problems afflicting the public pensions system. The main challenges which emerged included the need to ensure the future financial stability of the system, in view of the threat of population ageing, and to improve its fairness so that benefits received would reflect contributions paid. The Toledo Pact subsequently set out a series of reforms including separation of funding sources for contributory and non-contributory programmes; the establishment of a Reserve Fund with surpluses from social contributions; the raising of the retirement age; the equalisation of various rates of contribution to different schemes; and the strengthening of proportionality between contributions and benefits.

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