Pensions, vol.11, 2005, p.16-29
South Africans can save for retirement through occupational funds, individual life products and unit trust arrangements. However administrative charges are high overall and erode the value of retirement benefits. Policy makers need to address this through stronger disclosure requirements, consideration of a national standardised product and potential charge ceilings.
Pensions, vol.11, 2005, p.65-80
On balance, the voluntary savings system in the USA, as a complement to Social Security and a substitute for declining defined benefit occupational pension schemes, has been a reasonable success. Facilitated by Federal Government regulations, the defined contribution 401k plan has emerged as the most utilised retirement savings vehicle, shifting responsibility and risk of accumulating sufficient retirement savings to the individual.
Cheltenham: Elgar, 2005
The book deals with the economics of pensions and ageing on the basis of a rigorous theoretical framework alternative to neoclassical economics. It explains that the strength of the various reforms proposed depends on the validity of the economic theories on which they are respectively based.
International Social Security Review, vol.59, Jan.-Mar. 2006, p.49-74
Demographic ageing and its impact on the sustainability of pensions has become the focus of heated debate across the EU as governments attempt to reform their welfare systems. Among the most vocal opponents of the reforms are the traditional social partners, trade unions and employers’ organisations, because these generally entail reduced benefits for employees and higher costs for companies. Author argues that dialogue between the social partners remains essential for achieving consensus on feasible and acceptable reforms that will address the issue of population ageing. It is also argued that these reforms need to be broad-based, combining various labour market, social and family policy changes.
M. Matijascic and S.J. Kay
International Social Security Review, vol.59, Jan.-Mar. 2006, p.3-26
Individual pension savings accounts in Latin America promised to improve compliance and raise benefits in a cost-effective manner, while at the same increasing savings rates, which in turn was expected to promote economic growth. However, with roughly half the region’s labour force working in the informal economy and those affiliated to pension funds not paying regular contributions, individual accounts are unlikely to provide a decent pension for most workers. A number of recent studies have emphasized the importance of a state-provided guaranteed basic pension and have recognised that a range of alternative models are viable in the region, depending on macroeconomic and labour market conditions in each country.
A. Chopel, N. Kuno and S. Steinmo
Public Budgeting and Finance, vol.25, Winter 2005, p.20-43
Article argues that the pension system in Japan has evolved from a programme designed to help the aged poor to one that effectively redistributes massive amounts of money from working families to the retired population, even when older people have high incomes and substantial assets. The system is now locked into a rigid cycle of circulating wealth from the young to the old, ignoring the question of whether public pension recipients are truly needy. At the same time, Japan’s social security system has become fiscally unsustainable, as is shown by the fact that social welfare expenditure is now almost equal to the total tax revenue.
Cambridge Journal of Economics, vol.30, 2006, p.33-48
This paper critically examines dominant neoclassical views on the adoption of mandatory fully funded pension schemes as a substitute for the unfunded pay-as-you-go type. According to this view, such a transition will have the effect of endowing future generations with higher capital and output per head, since it should cause a once and for all increase in aggregate saving and the capital stock. Author identifies three obstacles to such an outcome. Firstly, the reform could fail to boost workers’ marginal propensity to save, since they may reduce their voluntary saving to compensate for larger mandatory saving to fully funded pension schemes. Secondly, if pay-as-you-go’s payroll contributions are reduced and diverted to pension funds, the larger private saving supply will be balanced by lower government saving, if the government is committed to honouring current pension payments. Finally, Keynes’s saving paradox shows that the rise in the marginal propensity to save does not result in an increase in capital accumulation, but rather in a fall in income and employment.