Academic literature on the topic 'Premium Pension System'

[full article and abstract in English] The aim of this study is to compare Lithuanian and Swedish pension systems from the point of view of their design and performance in order to elaborate reasonable recommendations to Lithuanian pension policy based on the best Swedish experience. Swedish income, premium and guaranteed old-age pensions system are compared with the analogous Lithuanian system of the “first,” “second” pillars and the “social” pensions. The main features of the systems are discussed, and the performance of the systems, mainly from the point of view of adequacy, is compared. The differences in system design and performance are identified, and the possible reasons of these differences are examined. Special attention is paid to differences in financing and the approach to the definition of benefits. The Lithuanian pension points approach is compared to the Swedish Notional Defined Contribution (NDC) approach. Each system is analyzed, and the relevance of transforming the Lithuanian first pillar pensions into a NDC system is examined.

The pension system existing in Ukraine does not correspond to the modern requirements of society and needs radical reforms in which the main focus should be on the introduction of a mandatory accumulative pension system. It is shown that accumulation of funds in accumulative pension system (APS) requires complex calculations. A model for accumulation of funds in the accumulative pension insurance system used in this paper makes it possible to determine a set of interrelated parameters – insurance premium rates, reasonable insurance periods, the desired rates of profitability, the required amount of savings, investment potential of accumulative pension system, etc. The amount of funds in accumulative pension insurance system depends not only on the basis of insurance (number of payers of insurance premiums), the amount of contributions (rate and object) and (primarily) on the term of beginning of payments of insurance premiums, the coefficient of profitability of invested funds and guarantees of their safety at all stages of functioning of the accumulative system. The analysis has shown that it is necessary: to cover all people employed in the economy with accumulative pension insurance; a rate of contributions should be determined not only by wages, but also by income; prior to the introduction of accumulative pension system – to create the necessary infrastructure, to develop a legal framework, to organize the management of accumulative funds, to solve the issues related to the protection of funds from the risks of losses. The beginning of introduction of the accumulative system should be postponed till 2020.

AbstractDuring the last few years, it has been revealed that Allra, a company that operated within the Swedish premium pension system, has acted reprehensively. In 2017 it was reported that Allra´s funds were expensive with mediocre growth and that owners at Allra benefitted at the expense of premium pension holders. Furthermore, Allra maintained subsidiaries in low tax jurisdictions that reduced tax revenues of the Swedish state and contributed to cash outflow. While this article was being written, Allra was also accused of potentially illegal transactions with a company named Oak Capital and suspected of overseeing illegal transactions between its subsidiaries in Luxembourg and Dubai. It is assumed that these transactions were made to enrich the shareholders of Allra. The current study, however, is disinterested in establishing Allra’s criminal guilt. Instead, it focuses on the role that private actors and state authorities have played in Allra’s harmful actions and potentially illegal transactions that have harmed premium pension holders and Swedish citizens. Using a theoretical framework proposed by Diane Vaughan (1983), the study explores issues of social structure and social relations. This is done in order to determine whether the social structure has played an important role in facilitating harm and whether states can be considered involved in this and, if so if it can be considered a case of state-corporate crime. The study concludes that states have been important for upholding and promoting the social structure and that the case can, therefore, be considered an example of statecorporate crime. However, since shareholders in leading positions in Allra have benefitted by using Allra as a tool, it is suggested that the concept of statecorporate crimes be broadened to include individuals and their self-interests.

In this paper, we propose a stochastic method to project the public pension fund in the public pension system (PPS). For this we introduce the stochastic differential equations for the three parts: the premium revenue, the benefit expenditure, and the fund process. From these we show that the solution of the aggregated fund process is the sum of log-normals, which is approximated as one log-normal for the analytic result. Related to the parameter estimations, we implement the moment matching in the first moment. For the second moment, we apply the extreme value method following Parkinson. In order to follow Parkinson, we take the maximum and the minimum range of the fund amount based on the various sensitivity result as well as the baseline one from the deterministic projection result. In this reason, it is naturally to maintain the close interrelation with the deterministic projection result, which is very important since it is still key result in the actuarial valuation of the PPS.

The study of current practices in the legal regulation of social and labour relations in the BRICS countries indicates the need to ensure equal treatment of migrant workers with national workers. Discriminatory barriers to migrant workers accessing social security systems contained in the legislation of receiving countries (the legal status of the migrant, duration of stay and other). The legislation of the country of origin of migrant workers also excludes them from the social security systems. Foreign nationals, residing temporarily in Russia, are subject to compulsory pension insurance. The payment of insurance contributions allows establishing a certain amount of pension rights. However, they often do not acquire the right to insurance, since the insurance pension is granted only to foreign nationals permanently resident in Russia. Basic old-age insurance, basic medical insurance, work injury insurance, unemployment insurance, and maternity insurance extend to foreigners legally working in China. In Brazil, foreign workers are insured under the General Social Security Regime. However, it establishes progressive premium rates. In India, international employees are required to be registered as members of the Employees’ Provident Fund and to contribute to it. Foreign nationals, who have entered South Africa to work under a contract of employment and who have been forced to leave the Republic, are not covered by the social security. It is therefore essential to design and implement policies that will strengthen the sustainability of the social security system and eliminate discriminatory norms between labor migrants and national workers.

The system of early retirement pensions was inherited from the USSR and every third Russian pensioner receives a preferential pension. It is assigned to metallurgists, oil workers, coal miners, ballerinas, trolleybus drivers, teachers - the lists of early retired pensioners are huge. The conduction of pension reform involved seeking resources within the system itself. To solve the problem of financing preferential pensions, a system of early non-state pension provision was created, implemented through non-state pension funds. However, the existing legislative regulation does not stimulate employers of hazardous and dangerous industries to create corporate pension programs due to the fact that they will not exempt employers from paying additional insurance premiums in favor of employees on preferential lists. As a result, there are no employers in the country who will not only pay wages on time, transfer insurance premiums in a timely manner, but for this category in an increased amount, but will also form additional contributions for the same employees under the early non-state pension system. The non-state pension paid in the frame of this system does not replace the early insurance old-age pension, that is, it does not entail a decrease in federal budget costs. The purpose of this study is to consider the main legal acts and the process of development of legislation on early non-state pension provision. The result of the study is practical proposals for improving the legal framework of the early retirement pension system.

Many argue that public school systems should stop linking teachers’ salaries so closely to their years of experience. However, the effect of deferred retirement compensation on the premium paid to experienced teachers has, to date, been underappreciated. To shed more light on this issue, we calculate the total compensation earned by teachers in New York City and Philadelphia from both salary and deferred retirement compensation under each system’s currently operating defined-benefit plan. Retirement compensation in both cities is back-loaded, which substantially increases the premium paid to highly experienced teachers. In late-career years, teachers often earn a larger compensation premium from the accrual of pension benefits than from salary. We show that cash-balance retirement plans, which are less back-loaded, would substantially reduce experience premiums without reducing the total compensation for the average entering teacher.

Ukraine has been reforming its pension provision for a long time, and in particular, such an important component as compulsory state pension insurance. The changes that have taken place as a result of these reforms have not yielded adequate results, and serious problems continue to exist regarding the balancing and long-term financial stability of the budget of the Pension Fund of Ukraine. Therefore, the study of the processes taking place in the solidarity system of pension insurance and the search for solutions to problems in this area is extremely relevant. The purpose of the study is to identify trends in the development of compulsory state pension insurance in Ukraine and substantiate its role in providing disabled citizens with adequate pension protection. The article is devoted to the study of the current state of compulsory state pension insurance and substantiation of its role in providing disabled citizens with decent pension benefits. The analysis of incomes, expenses and deficit of the Pension Fund of Ukraine is carried out, their comparison in national and foreign currencies is carried out. It is established that nominal revenues to the Pension Fund of Ukraine and its expenditures tended to increase, but when they were converted into foreign currency there was a decrease in these indicators (except for 2013), which indicates contradictory trends related to the depreciation of income and fund expenses. It has been proven that the Pension Fund of Ukraine constantly lacks its own funds to meet its pension obligations, as a result of which significant budgetary resources are absorbed and the majority of pensioners are not provided with decent pension benefits. Factors influencing the deficit of the Pension Fund of Ukraine have been identified. It is concluded that the problem of low pensions is largely a consequence of the general economic conditions in the country and to a lesser extent - a consequence of the structure or functioning of the solidarity system itself. After all, the basis for calculating insurance premiums is wages, which are low for most employees. Factors that negatively affect the functioning of the state pension insurance have been identified and measures to overcome them have been identified.

The article substantiates the relevance of issues related to the functioning of social protection systems for the population of developed countries. The review and analysis of the modern pension system in Japan is made. The mechanism of recognition of Japanese citizens and foreign citizens residing in it as insured persons of a certain category and the mechanism of functioning of individual subsystems of the pension insurance system (in particular, basic pension, employee pension insurance, optional (additional) pension insurance system) are considered. The data on the absolute amounts and rates of insurance premiums, the formulas by which the monthly pension is calculated, and the conditions that must be met by insured persons to acquire the right to a pension (for old age, for disability, for the loss of a breadwinner) are given. The conditions for receiving and the amount of benefits for dependents and child benefits are indicated. The review and analysis of the modern health insurance system in Japan is made. The mechanism of functioning of individual subsystems of the pension insurance system (in particular, insurance at the place of work, insurance at the municipal level, insurance for persons aged 75 and over) is considered. The data on the absolute amounts and rates of insurance premiums, on the specifics of fi nancing the activities of public and private organizations, which, on the basis of the principles of non-commercial activity, provide medical services to the population of Japan are presented. The conditions for receiving and the amount of benefits for the birth of a child, for a funeral, for temporary disability are indicated. Attention is drawn to the distinctive features of the pension and health insurance systems in Japan. It is proposed to use the Japanese experience to reform the national systems of social protection of the population.

Pension is a subject that soon or later affects all individuals in society. Within the premium pension system mutual fund fees are an important factor to consider since it can erode savings. This study investigates fees and performance of all mutual funds that existed in the premium pension system (PPS) between 2004 and 2016. Risk-adjusted performance and fees are adjusted to reflect the discount that is given for fees within the premium pension system to reflect actual investor experiences. The data needed to make these adjustments were obtained from the Swedish Pension Agency. The main purpose of this study is to investigate if there is a relationship between fee and risk-adjusted return within the Swedish premium pension system. Further on this study aims to explain what mutual fund characteristics can be used to predict performance and fees within the premium pension system.Theories used in this study are efficient market hypothesis, agency theory, behavioral finance, economies of scale and portfolio theory. The factors from the Carhart 4-factor model is used to construct the factor model utilized in this study to estimate risk-adjusted returns. This study adapts a quantitative research method and panel data regressions were conducted to determine how fee and risk-adjusted performance is related to various mutual fund characteristics. Hausman tests were conducted to evaluate if the fixed effects model or random effects model was the most appropriate to use. The result of the Hausman test proved that fixed effect model was the most appropriate model to use.This study will draw conclusions about whether the fee that the mutual fund companies charge can be justified given their risk-adjusted performance. The results for the sample of all mutual funds and the sample of equity funds imply that there exists a positive relationship between fee after discount and performance. Therefore, mutual funds in the premium pension system compensate for increasing fees with a higher risk-adjusted return. The sample of balanced funds differs since there is a negative relationship between risk-adjusted returns and fees. This study finds that size is a determinant of risk-adjusted performance, with larger mutual fund performing better than smaller funds. Because of this finding, it can be concluded that economies of scale do exist among the mutual funds in the premium pension system. Actively managed mutual funds charge higher mutual fund fees on average than passively managed funds. Further on, there is significant evidence that actively managed equity funds perform worse than passively managed equity funds. This suggests that investors are better off investing into cheaper equity index funds rather than expensive actively managed equity funds.

We investigate the activity and performance of 64 Swedish registered mutual equity funds available in the Swedish Premium Pension System from October 2002 to December 2011. Fund activity is measured by applying the holdings based analysis Active Share combined with Tracking Error Volatility (TEV). Active Share is a relatively new measure that compares a fund’s holdings with its benchmark index constituents (Cremers & Petajisto, 2009; Petajisto, 2013). This is used as a proxy for the fund’s stock selection strategy. As a complement, TEV is used as a proxy for the factor timing strategy. Performance are measured by using Jensen’s (1968) model, Fama and French’s (1993) model and Carhart’s (1997) model. We document that Swedish funds in the Premium Pension System are relatively passive in term of Active Share compared to US funds. We attribute this finding to the relative number of stocks held by a fund compared to the market. Swedish equity funds hold a relatively larger share of the number of stocks in the Swedish market while US funds hold a relatively smaller share of the stocks in the US market. We run a panel regression analysis to test the relation between Active Share and various variables. We find that funds with higher TER fees and fewer stocks on average have higher Active Share. There are also indications that TEV is positively related to Active Share. However, the overall explanatory power of the variables is low. We attribute this as evidence that Active Share is an independent measure of fund activity. Overall, we find neutral performance for an equally weighted portfolio of all funds in the PPS. To examine the performance differences between different levels of activity, we sort funds into five portfolios based on Active Share and TEV. The results show that, given a medium-to-low TEV, funds with high Active Share significantly outperform funds with low Active Share. Furthermore, it appears that the fee rebate in the Premium Pension System is important especially for the passive funds. Without the rebate, the passive funds underperform significantly. We run a panel regression analysis on the future fund performance to test the predictive abilities of Active Share and TEV. The results indicate that Active Share does not explain future performance differences. Conversely, TEV is negatively related to future performance which can be explained by fund managers being overconfident

Background: Since 1998 Sweden has individual accounts as a part of both public and occupational schemes (Sundén 2006). Yearly, 2,5% of the pensionable income is set aside to the premium pension (The Swedish Pension Agency 2021) Individuals are able to choose how the premiums should be paid in the system and in what way the money should be invested, either by choosing from the fund market or by refraining from making an active choice and instead let the Swedish pension agency management their money in the passive alternative called AP7 Såfa. The passive alternative AP7 Såfa is a portfolio which adapts to the age of the investor and is built to fit a long-term pension investment.  Purpose: This study will focus on evaluating if the passive alternative AP7 Såfa has an excess risk-adjusted return compared to given portfolios in the premium pension selection system, or if the investor would benefit from managing the portfolio more actively. The study will also search for benefits using the Treynor-Black model to check the optimal allocation between this actively managed portfolio versus the passive alternative AP7 Såfa.  Conclusion: This thesis has shown that there might be superior strategies rather than the index fund to find risk-adjusted excess return in the premium pension system. However, those strategies require professional analysts in order to forecast securities. For households choosing between active management themselves or the passive index fund AP7 Såfa, the most beneficial investment is to be passive and to not actively manage the portfolio. The optimum strategy is found to be the Treynor-Black model with a combined portfolio of the index fund and the active portfolio.

Bakgrund: Var dag ställs människor inför val som har högre eller mindre utsträckning påverkan på dess framtid. En av de vanligaste ekonomiska beslutssituationer människor ställs inför är beslut gällande pensionen. Det svenska pensionssystemet är komplext och särskilt inom premiepensionen ställs individen inför en mängd valmöjligheter. Där kan individen välja egna premiepensionsfonder eller välja att inte göra ett aktivt val och därmed ha kvar förvalsalternativet AP7 Såfa. Samtidigt som kraven är höga på individens beslutsfattande visar beteendeekonomisk forskning att individens förmåga att fatta rationella beslut inte är på den nivå som traditionella ekonomiska teorier utgår ifrån. Den stora mängd valmöjligheter som finns inom premiepensionen förefaller skapa problem och leder till att åtskilliga individer väljer att inte göra något aktivt val. Tidigare forskning visar att ett flertal demografiska faktorer samt individens finansiella förmåga och kännedom om finansiella marknaden påverkar individens beslut gällande pensionen, samt att det finns ett behov av vidare forskning på vad som påverkar individer gällande pensionssparandet. Denna studie ämnar bygga vidare på de tidigare studier som gjorts för att kartlägga vilka egenskaper som leder till att en individ fattar aktiva beslut inom premiepensionssparandet samt koppla de beslut de gör till beteendeekonomiska teorier för att få en djupare förståelse för individens agerande gällande premiepensionsvalet. Med studiens resultat hoppas vi kunna bidra med ökad förståelse för vad som påverkar de val som görs gällande premiepensionen. Syfte: Syftet med denna studie är att undersöka samband mellan en individs egenskaper och om denne gör ett aktivt val gällande premiepensionemn, samt undersöka bakomliggande beteendeekonomiska biases gällande individens val inom premiepensionen. Detta med avsikt att genom en kvantitativ metod skapa ökad förståelse kring varför individer fattar de beslut de gör kring premiepensionssparandet. Genomförande: Denna kvantitativa studie antar en iterativ ansats där studien präglas av en tvärsnittsdesign och data har samlats in genom ett snöbollsurval med hjälp av enkäter. Sammantaget ingår 172 individer i denna studie. Slutsats: Resultatet av studien visar att hur länge en individ har befunnit sig i arbetslivet, inkomstnivån samt om individen investerar i aktier på fritiden har en positiv påverkan på sannolikheten att denne har valt egna fonder till premiepensionen. Resultatet skiljer sig mot vad viss tidigare forskning visat. Studien identifierade även ett antal beteendeekonomiska biases som påverkar individen inom premiepensionsvalet. Resultatet tyder på att de individer som har gjort ett aktivt premiepensionsval påverkas av mentala genvägar när det kommer till att välja premiepensionsfonder. Vidare indikerar resultatet på IV att de som inte gör ett aktivt val påverkas av beteendeekonomiska biases som leder till inaktivitet.
Background: Every day people have to make choices that have a greater or lesser impact on their future. One of the most common financial decision-making situations people face is the decision regarding the pension. The Swedish Pension System is complex and, in particular, within the Premium Pension the individual is faced with a variety of choices. There individuals can choose their own Premium Pension funds or choose not to make an active choice and thus retain the AP7 Såfa. While the demands are high on the individual’s decision-making, behavioral finance research shows that the individual’s ability to make rational decisions is not at the level of traditional economic theories. The wide range of options available within the Premium Pension seems to create problems and leads to the fact that several individuals choose not to make any active choice. Previous research shows that a number of demographic factors, as well as the individual's financial literacy and financial market awareness, influence the individual's decision regarding the pension. Previous research also shows that there is a need for further research on what affects individuals in terms of pension savings. This study aims to build on previous studies to map which characteristics affect an individual to make active decisions in the Premium Pension and to link the decisions they make to behavioral finance theories to gain a deeper understanding of the individual's actions regarding the Premium Pension choice. With the result of the study, we hope to contribute with better understanding of what influences the choices made within the Premium Pension. Purpose: The purpose of this study is to investigate the relationship between an individual's characteristics and if they make an active choice regarding premium pension funds, as well as investigate underlying behavioral finance bias that affect an individual’s choice within the Premium Pension. With the intention, through a quantitative method, to create a better understanding of why individuals make the decisions they make regarding the Premium Pension. Completion/methodology: This quantitative study assumes an iterative approach where the study is characterized by a cross-sectional design and the data has been collected through snowball sampling using surveys. Altogether, 172 people are included in this study. Conclusion: The result of the study shows that how long an individual has been working, the income, and if the individual invests in shares has a positive impact on the probability that the individual has chosen own funds for the premium pension. This differs from what some previous research has shown. The study also identified a number of behavioral biases that affect the individual in the Premium Pension Plan. The result indicates that those individuals who have made active Premium Pension choices are affected by shortcuts when it comes to choosing Premium Pension funds. Furthermore, the result indicates that those who do not make an active choice are affected by behavioral biases that lead to inactivity.

碩士
開南大學
商學院碩士在職專班
102
We conducted a comparative study through literature analysis regarding the annuity system and reform in countries with advanced social welfare policies (e.g., Japan, the United States, and Germany) and in Taiwan. Moreover, the citizens who had default payment of national pension insurance fees in the New Taipei City were surveyed and analyzed. The findings of this study are listed as follows: (a)For economically disadvantaged populations, the primary cause of the default payment was the burden and pressure resulting from their nonparticipation in the national pension systemand inability to pay the national pension insurance fee because of economic distress. (b)The difficulties and problems encountered and the process of adjustment, amendment, and reform in promoting and implementing annuity systems in countries with advanced social welfare can be used as referencesto facilitate gradual financial improvement. We proposed three suggestions as follows: (a)The government can reference the four-step insurance burden exemption measure adopted in Japan to help citizens with economic distress. (b)Establishing relevant juristic-person foundations or provident fund systems can help disadvantaged citizens who cannot economically afford the insurance fee. (C)The propagation and education training relevant to the national pension system should be enhanced to achieve the purpose of communication. Keywords： national pension, national pension reform, pension system, Bismark model New Taipei City, social insurance