Gender inequalities in pensions: different components similar levels of dispersion

While the average gender gap in pensions is quite well documented, gender differences in the distribution of pensions have rarely been explored. We show in this paper that pension dispersion is very similar for men and women within the French pension system of a given sector (public or private). Gender differences are less marked among retired civil servants than among former private sector employees. However, the determinants of these inequalities are not the same for men and women. Using a regression-based decomposition of the Gini coefficient, we find that pension dispersion is mostly due to dispersion of the reference wage for all retirees but gender differences exist. For women, in particular, pension dispersion is also due to the dispersion in contribution periods. We also decompose the Gini coefficient by source of pension to measure the impact of institutional rules (minimum pensions, survivor’s pension) on the extent of pension inequality. Unexpectedly, we find that the impact of minimum pensions is limited, although slightly larger for civil servants than for private-sector employees. Survivor’s pension schemes, on the other hand, contribute positively to pension dispersion among retired women.     

Immigrants in the Old‐Age Pension System: The Case of Sweden

The article investigates incomes and especially state pensions 2008 among elderly immigrants who arrived in Sweden before 1970. At age 70 and above, the level of state old‐age pension for immigrant men was nearly the same and for immigrant women somewhat higher than for natives with similar characteristics. At age 65–66 the state pension was lower for immigrants than for their native counterparts. The differences in pensions for immigrants of different ages are probably due to changed rules in the Swedish state old‐age pension system from 2003. The new rules have hit different age groups in different ways. The gaps are partially levelled out when other incomes are included. The extent to which levelling occurs varies greatly between different immigrant groups. For immigrants who have arrived during the last decades, the future state old‐age pension outcomes are expected to be worse.

Policy Implications

• The Swedish Pensions Agency should set up a register of pensions from abroad. This will tell us to what extent old‐age pensions from the home country compensate for low old‐age pensions from the Swedish system.
• Better integration on the labour market is a powerful measure for reducing the risk of future low pensions among immigrants. This is a challenge for Swedish integration policy.
• To what extent can other parts of the Swedish welfare system in the future compensate individuals with low old‐age pensions?

     

How Well-Informed Are Pension Scheme Members on Their Future Pension Benefits? Evidence from Ireland

One part of the policy response in many countries to increasing pension coverage will be greater private provision on the part of individuals. This requires that individuals are well informed about pensions. In this article, we assess levels of knowledge of pensions using a representative sample of older Irish adults. We find that two-thirds of individuals enrolled in pension schemes do not know what amount will be paid out on retirement and/or whether the payments will be in the form of lump sums, monthly payments, or both. One policy implication is the need for increased information to be directed at certain groups, in particular, women and less educated people. More fundamentally, the results suggest that the mandatory elements in pension systems should be extended.     

Policy Shift: South Africa’s Old Age Pensions’ Influence on Perceived Quality of Life

Noncontributory pensions serve as an important resource for poverty-affected households in low- and middle-income countries. This study explores how a recent policy change to pension receipt influences perceived quality of life among older South Africans. We use survey data from the longitudinal World Health Organization Study on global AGEing and adult health and from the Agincourt Health and Socio-Demographic Surveillance System census. We find pension receipt to have a positive impact on both men’s and women’s perceived quality of life. These findings hold when controlling for prior well-being status. We find a significant moderating factor of physical limitations on the relationship between pension receipt and quality of life. Individuals reporting the highest levels of physical limitation report a larger increase in their quality of life upon pension receipt than those with less severe physical limitations. We conclude that despite the well-documented household income-pooling in this population, pension receipt still leads to a significant positive impact on pensioners’ perceived quality of life.     

High incidence of disability pension with a psychiatric diagnosis in western Sweden. A population-based study from 1980 to 1998

Regional differences in Sweden in the prevalence of disability pension with a psychiatric diagnosis are unexplained, in spite of the significant impact on the population's health, rehabilitation systems, and the health care system. The purpose of this study was to describe the pattern of disability pensions with a psychiatric diagnosis and to analyze the impact of age and gender. We examined the incidence rates in one urban and one semi-rural region and compared these to national rates. The study sample was drawn from employed persons between 16-64 years of age who, because of their sickness insurance coverage, would be eligible to access disability pensions should it be necessary. Analysis of annual incidences and standardized morbidity ratios were made for 1980, 1985, 1990, 1995, and 1998. Data on disability pension cases were collected from the National Social Insurance registers. In the urban region we found that the proportion of men and women clearly outnumbered the national average: approximately twice the number of persons between 16-64 years of age with a psychiatric diagnosis were receiving a disability pension. In the semi-rural region there were fewer men overall on disability pensions with psychiatric disorders, but in 1980, 1985, and 1995 women clearly outnumbered men. Access to psychiatric care, unemployment, alcohol dependence, and previous sickness absence are suggested as possible factors that might affect the rates of disability pension in different geographical settings.     

Long-Term Care

This study examines the redistributive effects of public pensions on old-age income inequality, testing whether public pensions function as the “great equalizer.” Unlike the well-known alleviating effect of public pensions on old-age poverty, the effects of public pensions on old-age income inequality more generally have been less examined, particularly outside Western countries. Using repeated cross-sectional data of elderly Koreans between 1998 and 2010, we applied Gini coefficient decomposition to measure the impact of various income sources on old-age inequality, particularly focusing on public pensions. Our findings show that, contrary to expectations, public pension benefits have inequality-intensifying effects on old-age income in Korea, even countervailing the alleviating effects of public assistance. This rather surprising result is due to the specific institutional context of the Korean public pension system and suggests that the “structuring” of welfare policies could be as important as their expansion for the elderly, particularly for developing welfare states.     

Czechoslovakia’s Interrupted Revolution

Russia’s transition to a market economy has been accompanied by serious, and in some ways unanticipated, disruptions of the existing social welfare system. The social policy dilemma has become a contentious issue in the national political arena. This paper examines the debate on the relationship between social welfare and democratization in post-communist Russia, exploring the case of pensions for the elderly. Although the causes of the pension crisis are complex and rooted in institutional difficulties, the state’s fiscal weakness alone does not explain the difficulties and controversies associated with Russia’s pension crisis. Analysis of the assumptions and principles of pension policy during the Soviet era and perestroika reveals that Russia today is caught between contradictory and competing discourses over citizens’ entitlement to pensions: Is an old-age pension to be considered a reward distributed by a prosperous society, or a basic and inviolable human right? Although the Russian government has used an argument that in effect makes pensions conditional on government resources, citizen and opposition protest has to some extent compelled the Russian government to be increasingly sensitive to demands for guaranteed pensions.     

Warum fast alle das deutsche Rentensystem ungerecht finden, aber trotzdem nichts daran ändern möchten

As Germany’s representative 2006 Survey of the International Social Justice Project clarifies, intergenerational justice and financing of future pensions are seen as central problems of Germany’s state pension system by a vast majority. Despite this common perception, proposals for reform that address the issue of intergenerational justice directly at the institutional level are extremely unpopular. Moreover, concrete constitutive elements of the state pensions system, like the amount of contributions, the amount of benefits and the principle of status-conservation are seen as largely fair. As mechanisms driving this preference for the status quo, anchoring effects, loss aversion and socialization are proposed and tested empirically via factorial survey methods. Results indicate that arbitrary settings (anchors) determine what people regard as a just pension irrespective of individual justice standards. Furthermore, loss aversion can help explain why individual worries about economic status in old age overlay consideration of exchange relations between the young and the old within the pensions system. As a result, potential benefits of reform are hardly recognized. Finally, former institutional settings prove to be formative for ideas of justice in the long run. Even under the condition of comparable economic interests, Germans from the former GDR expect a more egalitarian distribution of pensions, whereas Western Germans strongly favor allocation according to status criteria.     

Pension norms and pension reforms in Europe – the effects on gender pension gaps

Pension levels in the EU15 are significantly gendered. Various reforms to pension systems explicitly aim at improving women's opportunities to build up pension entitlements. These reforms differ from country to country. We see so-called work–life balance policies to increase women's labour market participation by facilitating part-time employment in particular as well as pension entitlements for care periods outside the labour market. At the same time, however, other seemingly gender neutral reforms generally tend to have the opposite effect. These measures include changes in pension calculation norms and pension composition, increasing the importance of non-public pensions. Therefore, future female pensioners will not be significantly better off. However, for women to be better off is necessary in times of pension retrenchments and individualization.

Based on recent life-course theories and studies, this article analyses the multiplicity of reasons for gender differentiated pension levels. It shows that the numerous direct and indirect pension determining factors related to life courses and welfare arrangements are interlinked on many fronts. Their cumulative effects finally result in (continued) significant gender gaps. It is argued that there are no quick fixes for reducing the gender gaps in pensions but that this will require attention to the degendering of labour market and the reformulation of life course norms.     

Extending Private Pension Coverage in a Middle-Income Country

Abstract

Government policies can play an important role in the development of private pensions. These policies can be divided into three groups: (1) policies that are essential to providing a favorable economic environment for pensions; (2) policies that encourage the development of private pensions, given that a favorable economic environment for them exists; and (3) policies that deal with weaknesses of private pension systems. While the policies discussed are generally applicable for middle-income countries, the economic and legal environments for pensions differ across countries. This article focuses in particular on the situation in Brazil.     

THE EFFECT OF NONCONTRIBUTORY PENSIONS ON SAVING IN MEXICO

This paper examines the effects of noncontributory pension programs at the federal and state levels on Mexican households' saving patterns using micro data from the Mexican Income and Expenditure Survey. We find that the federal program curtails saving among households whose oldest member is either 18–54 or 65–69 years old, possibly through anticipation effects, a decrease in the longevity risk faced by households, and a redistribution of income between households of different generations. Specifically, these households appear to be reallocating income away from saving into human capital investments, like education and health. Generally, state programs have neither significant effects on household saving, nor does the combination of federal and state programs. Finally, with a few exceptions, noncontributory pensions have no significant impact on the saving of households with members 70 years of age or older—individuals eligible for those pensions, plausibly because of their dissaving stage in the lifecycle. (JEL D14, J26, O12, H55)     

Questions and answers on employee benefit issues

This Issue Brief addresses 19 topics in the areas of pensions, health insurance, and other benefits. In addition to the topics listed below, the report includes data on the prevalence of benefits, tax incentives associated with benefits, lump-sum distributions, number of private pension plans, pension coverage rates, 401(k) plans, employer spending on group health insurance, self-insured health plans, employer initiatives to reduce health care costs, and employers' response to the retiree health benefits accounting rule, and flexible benefits plans. In 1992, U.S. employers (public and private) spent $629 billion for noncash benefits, representing nearly 18 percent of total compensation, excluding paid time off. In 1992, 71 percent of the 50.1 million individuals aged 55 and over received retirement benefits, including distributions from private and public pensions, annuities, individual retirement accounts, Keoghs, 401(k)s, and Social Security. Among the 76 percent of all private pension plan participants who participated in a single plan, 30 percent named a defined benefit plan as their pension plan type, 58 percent named a defined contribution plan as their pension plan type, and 12 percent did not know their plan type. Private and public pension funds held more than $4.6 trillion in assets at the end of 1993. The 1993 year-end assets are more than triple the asset level of 1983 (nominal terms). According to the Congressional Budget Office, U.S. expenditures on health care were expected to have reached $898 billion in 1993, up from $751.8 billion in 1991, an increase of 19.4 percent in nominal terms.     

Pension prospects of minority ethnic groups: inequalities by gender and ethnicity

Minority ethnic groups have low income in later life from private pensions, partly due to shorter employment records in Britain since migration. Yet disadvantage and discrimination in the labour market, as well as differences in cultural norms concerning women's employment, may lead to persistence of ethnic variation in private pension acquisition. Little is known about the pension arrangements made by men and women in minority ethnic groups during the working life. This paper examines the extent of ethnic disadvantage in private pension scheme arrangements and analyses variation according to gender and specific ethnic group, using three years of the British Family Resources Survey, which provides information on over 97,000 adults aged 20-59, including over 5,700 from ethnic minorities. Both men and women in minority ethnic groups were less likely to have private pension coverage than their white counterparts but the extent of the difference was most marked for Pakistanis and Bangladeshis. Ethnicity interacted with gender, so that Blacks showed the least gender inequality in private pension arrangements, reflecting the relatively similar full-time employment rates of Black men and women. A minority ethnic disadvantage in private pension coverage, for both men and women, remained after taking account of age, marital and parental status, years of education, employment variables, class and income. The research suggests that minority ethnic groups - especially women - will be disproportionately dependent on means-tested benefits in later life, due to the combined effects of low private pension coverage and the policy of shifting pension provision towards the private sector.     

Contracting-Out in the United Kingdom

Abstract

Contracting-out was introduced in the United Kingdom in 1978 as part of the arrangements for the State Earnings-Related Pension Scheme (SERPS) in order to avoid duplication with the existing well-developed defined benefit occupational pension plan sector. Members and sponsors of contracted-out schemes were able to save on their social security contributions in recognition of the fact that they were accruing equivalent benefits through an occupational pension plan. Later on this concept was extended to those with individual money purchase pension plans. This article considers a brief history of contracting-out, the principles of contracting-out, some problems associated with contracting-out, the implications of the introduction of stakeholder pensions and State Second Pension, and the latest rebate review and rebate orders. It examines how U.K. pensions policy since 1978 has been based on a partnership between social security and private pension plans.     

How pension accrual affects job satisfaction

Using a sample of 429 employees in a large, unionized public utility company in Canada, we examine the incentive effects of a final-earnings pension plan on employees’ job satisfaction. Contrary to rational economic expectations, job satisfaction is found negatively related to expected accruals under the pension plan. Satisfaction was also lower among those who perceived a higher likelihood of being declared redundant, had better nonmarket alternatives, and who viewed conflictual approaches as most effective in resolving prior disputes at work. Conversely, employees who perceived greater support for employer-sponsored training, perceived such training to be effective, and believed cooperative approaches to dispute resolution worked best, were more satisfied. Implications for pension theory, research, and policy are discussed.     

The Pension Reform Process in France

The French old age security system was constructed progressively following the end of the Second World War in response to the pressing problem of old age poverty. In 1945 less than 40% of old people (4.5 million in total) had a pension. This was despite the existence of some pension systems dating back to the end of the nineteenth century and the beginning of the twentieth century. Monetary depreciation also meant that the pensions of those who enjoyed such benefits were very low. Historical factors explain the current pension system's organization and institutional division favouring pay-as-you-go schemes. While the French pension system has been largely successful in eliminating old age poverty, it today faces new challenges and constraints that make reform necessary. The debate as how best to reform the pension system is a long and winding one. Change is slow and incremental. Ideological, social and cultural factors and their interrelations help explain the difficulties in effecting reforms.     

Individual Pension Plans in Spain: How Expected Change in Future Income and Liquidity Constraints Shape the Behavior of Households

Understanding the motives that underlie Spaniards’ retirement saving decisions is important because many, if not most, future retirees will need to rely on personal savings to maintain a decent standard of living. The governor of the Bank of Spain has stated recently that the current public pension system will not guarantee an adequate pension to the citizens, advising to save now for retirement. In this debate on public pensions, and the complementary role that private pensions might play in Spain, this article has shed light on the decision of Spanish households to engage in individual pension plans and it has identified which factors determine the total amount saved in such retirement plans. Using micro data from the Bank of Spain (Survey of Household Finances 2011), the analysis has revealed that the expectations of lower future income, along with preferences for the financial risk and education, exert an important influence on the likelihood of enrolling in a private pension plan. University education minimizes the myopic behavior of households in the sense of making them more forward-looking and cautious in the face of their future well-being. Additionally using Heckman’s methodology to correct for the problem of selection bias, our results have revealed that liquidity constraints affect negatively the total amount of money saved for retirement.     

Extending private pension coverage in a middle-income country: the case of Brazil

Government policies can play an important role in the development of private pensions. These policies can be divided into three groups: (1) policies that are essential to providing a favorable economic environment for pensions; (2) policies that encourage the development of private pensions, given that a favorable economic environment for them exists; and (3) policies that deal with weaknesses of private pension systems. While the policies discussed are generally applicable for middle-income countries, the economic and legal environments for pensions differ across countries. This article focuses in particular on the situation in Brazil.     

Retirement and risk: the individualisation of retirement experiences?

A climate of uncertainty and risk exists in the field of retirement and pensions. Many employers have modified their pension schemes shifting the financial risk onto employees. Many individuals with private pensions have watched the value of their savings diminish. Added to this, the trend toward early retirement before state pension age has destabilised the traditional life course notion of a fixed retirement age, (especially for men). As a result, the concept of retirement itself has become more unpredictable and difficult to define. In this article we examine the extent of the individualisation of retirement experiences by reference to a study of retirement transitions in two organisations. The research investigated the influences on people's retirement decisions and the extent to which they experienced choice and control over how and when they retired. It is possible to identify a pattern of individualisation in contrast to its opposite of a mass transition into retirement, collectively understood and embedded in formal, institutionalised arrangements. However, underlying this fragmentation of experience there are clear structural patterns. The form that structured individualisation took here, was less to increase the majority of people's range of alternatives and choices over when and how to retire and more to enlarge the range of risks they had to cope with.     

居民养老保险:参保主体、筹资与待遇水平

本文从参保结构、筹资水平和待遇水平等3个方面对城乡居民养老保险制度进行了分析。研究发现,在参保结构方面,伴随着城镇化率的提高,居民养老保险参保人数的相对比例在下降;在筹资水平方面,个人缴费水平过低,其主要原因是财政补贴资金激励性不足,从而需要在进一步提高财政补贴的同时,优化补贴结构,提高对个人缴费的激励作用;在待遇方面,居民养老金总体水平较低、但增长幅度较大,与职工待遇相比,替代率的差距要远远小于绝对额的差距。