An investigation of defamilization/familization measures to assist women to save pension income and strengthen the adult worker model—The case of Hong Kong

This paper examines the use of defamilization and familization measures to develop an analytical framework to inform the search for ways to improve women's opportunities to accumulate pension income. This framework is associated with the use of the adult worker model. Three main analytical tasks are presented. Firstly, we discuss different interpretations of what defamilization entails. Based on these different views, two types of defamilization measures utilized by the government are identified: care‐focused and economic defamilization. Secondly, with reference to different definitions of the adult worker model, we develop a framework for identifying ways to make the provision of the government's defamilization measures and its alternatives (care‐focused and economic familization measures) more effective in assisting women to accumulate pension income. Thirdly, using the case of Hong Kong, we demonstrate the application of this analytical framework.     

Presenting a new defamilization and familization framework for investigating the residualization of old‐age income security measures—The case study of Hong Kong

Familization and defamilization studies are increasingly seen as an important component of welfare research. They are concerned with the threats to the welfare of individuals caused by involuntary participation in the unwanted family relationship. Moreover, they address the idea that governments have the potential to reduce these threats through the provision of welfare measures. This article contributes to the familization and defamilizaion studies with the focus on the link between these studies and the studies of residualization strategies. It carries out three analytical tasks. The first is to present a new defamilization and familization framework. The second is to demonstrate the usefulness of this framework in analyzing the problem of employing the residualization strategies to reform the old‐age income security system. Our focus is particularly on the insufficient sensitivity of these strategies to women's (and men's) diverse preferences relating to ways of organizing their family life. The third is to demonstrate the empirical significance of this framework. To meet this objective, we apply the framework to the investigation of two old‐age income security measures in Hong Kong—the Mandatory Provident Fund and the Comprehensive Social Security Assistance scheme.     

ISSUES AFFECTING WOMEN'S RETIREMENT PLANNING

There has been a steep rise over the past 20 years in the proportion of women who enter the workforce, with a concomitant increase in the number of women who will be retiring in the next 20 years. In the past, the majority of women over 60 have either been supported by their husbands superannuation benefits, or have been dependent on a government pension. This situation is unlikely to continue; it is becoming increasingly essential for women to make provision for their own post-retirement income. However available evidence suggests that women are not effectively planning for their retirement and are increasingly at risk of facing a life of poverty in their old age. This research project examines some of the factors that impact on women's capacity to effectively plan their retirement. In particular, the research explores the attitudes of women to retirement planning, access to information, and external impediments particularly labour market conditions.     

Pension reform in the Baltic States: Convergence with “Europe” or with “the world”?

Abstract The Baltic States – Estonia, Latvia and Lithuania – join the European Union in 2004. This paper examines pension reform in the three countries over the past decade in the light of the “European social model” and the “World Bank model”. Part one seeks to define these two models. It shows how the former emphasizes income adequacy and solidarity while the latter stresses fiscal sustainability, savings and economic growth. Part two looks at reforms made and proposed. Initial reforms involved raising the retirement age and relating benefits more closely to earnings and service. This resulted in the establishment of pension systems similar to those in many European countries. Subsequent reforms involved attempts to shift from a publicly financed, purely “pay‐as‐you‐go” system to one based upon “funding” and private, individual accounts. Such systems have been promoted by the World Bank. The appropriateness of this approach – its high transition costs, potentially high administration costs, and longer‐term implications for the relative income status of retired people – is questioned. Part three draws conclusions. In the short and medium term, policymaker should safeguard income adequacy rather than seek the doubtful advantages of funding – in other words, look more to “Europe” than to “the world”.     

"Risk" and UK Pension Reform

“Risk” is a word that has become common currency in the financial services industry in general, and in the pensions industry in particular. This article critically examines its use in the context of the current debate about UK pension reform. “Risk” is used by a broad spectrum of interests to discuss a wide range of pension issues in a variety of contexts. The article outlines key theoretical perspectives on the nature and construction, or conceptualization, of risk. Their relevance to debate and policy initiatives, particularly public pension policy, is examined. It is suggested that current government policy is failing to carry with it those to whom the policy applies; that reforms implicitly, if not explicitly, underestimate the importance of “security”; and that failure to conduct a much broader debate about the fundamental notions of work, retirement, saving and security may simply condemn the UK to interminable pension reform.     

Improving gender outcomes in social security retirement systems

Assessing whether retirement systems meet their varying objectives requires analysing outcomes across different categories of beneficiaries with different working, financial, demographic, and family situations. Policymakers should therefore assess systems on the distribution of outcomes rather than average outcomes. Much has been written about the gender inequalities inherent in labour markets and how these are reflected and reproduced in pension systems, and there is growing evidence that recent reforms have exacerbated these trends. Recent research has turned to the policy measures available to policymakers to forestall or reverse these trends, but this literature tends to overlook important administrative measures that have the potential to reduce inequalities in access that could improve pension outcomes for women within the current policy framework. This paper examines the main issues surrounding gender inequality in retirement outcomes; explores the implications of recent reform trends in light of the differential outcomes for women, including policy options to mitigate the negative impacts; and concludes with a review of key administrative measures, including streamlining affiliation procedures, improving information, and simplifying payment of contributions and receipt of benefits and better compliance of employers.     

Voluntary Pension Saving for Old Age: Are the Objectives of Self‐responsibility and Security Compatible?

Fiscal pressure and demographic change lead governments to seek ways of reducing state expenditure on pensions. Individuals are asked to take more responsibility, and funded, supplementary pension schemes have been established in many countries. This article looks at schemes that are voluntary – the NEST or Personal Accounts scheme in Britain and the Riester Pension scheme in Germany. It examines the debate about whether it is worthwhile for some people to participate in pension schemes that are not mandatory – particularly those with low incomes and/or potentially broken careers. The small pensions they accumulate in such schemes merely offset entitlements to means‐tested pension benefits, leaving them no better off in old age. Concerns about the behavioural consequences of pension means‐testing are not new. Nonetheless, few policymakers have been willing to look at when and how such concerns were expressed in the context of voluntary pension savings. Equally, they have seldom been prepared to explain the costs involved in guaranteeing savings‐based pensions or the implications that the lack of offering such a guarantee might have for individual behaviour. The state has sought for people to take greater ‘self‐responsibility’ for their retirement income, but many people wish for some certainty with respect to the pensions they can expect. These goals might well be in conflict. Whether the ‘state pension for the 21st century’, as proposed by the UK government, will succeed in satisfying the objectives both of the state and of pension savers remains an open question.     

The Retirement Provisions in China,Hong Kong,Singapore and Taiwan: Perspectives on Policy Inputs and Social Outputs

This paper aims to develop an integrated policy index system using a Surface Measure of Overall Performance (SMOP) approach to comprehensively evaluate and compare the policy input and social output of the retirement payment system in urban and rural China, Hong Kong, Singapore and Taiwan. With this, a tool may be developed to help insightfully examine the old‐age income policies and appropriately, and perhaps theoretically in the future, categorize the types of retirement provisions or social security policies as a whole in the East and West. The results indicate that, particularly in urban China, Hong Kong, Singapore and Taiwan, a low level of de‐familization and medium and high levels of gender equality are the common features of these five pensions in China, Hong Kong, Singapore and Taiwan. Furthermore, it is found that the retirement provisions in China, Hong Kong, Singapore and Taiwan can well be divided into two groups based on the level of pension right protection and illustrate different characteristics between them accordingly. In addition, policy implications and suggestions for further reforms of these retirement payment schemes are elaborated in the light of the findings of this policy index system.     

Special pension schemes for workers in arduous and hazardous jobs: Functions and conditions to ensure equal treatment

Most jurisdictions grant differentiated and more beneficial treatment – usually in the form of early retirement, and commonly under special pension schemes – to workers in arduous or hazardous jobs. Several justifications for such treatment have been advanced, including i) compensating the worker for the hardship, ii) protecting the worker from the hazard, and iii) realizing the principle of equality in the distribution of costs and benefits in the social security system. This article analyses these functions from a socioeconomic perspective and explains how early retirement for workers in arduous and hazardous jobs is necessary to ensure equality by treating “unequals unequally”, and in proportion to their inequality. Moreover, this article presents a precise formula to calculate when a worker should be allowed to retire, so that workers in occupational domains with a shorter life expectancy do not systematically enjoy lower expected benefits from the pension system while having contributed the same amount. Implications for the design and desirability of special pension benefits are discussed.     

Pension privatization in crisis: Death or rebirth of a global policy trend?

From 1981 to 2007, more than thirty countries worldwide fully or partially replaced their pre‐existing pay‐as‐you‐go pension systems with ones based on individual, private savings accounts in a process often labelled “pension privatization”. After the global financial crisis, this trend was put on hold for economic, ideational, and institutional reasons, despite a rise in critical indebtedness that has facilitated pension privatization in the past. Is the global trend towards pension privatization dead or in the process of being reborn, perhaps in a somewhat different form? Several recent trends point to rebirth as policy‐makers scale back public and private pension systems, attend to minimum pensions and “nudge” rather than mandate people to save for retirement.     

The interaction of pillars in multi‐pillar pension systems: A comparison of Canada,Denmark, Netherlands and Sweden

Canada, Denmark, the Netherlands and Sweden have advanced multi‐pillar pension systems. Using micro‐simulations, this article presents a close examination of the interaction of pillars in these countries. The relative importance and the role of the different pension pillars vary from country to country, and according to age, income, gender and socio‐economic dimensions as well as between generations. A further area of investigation is the mitigation capacity of the four pension systems. On the one hand, adverse labour careers lead to lower life‐time earnings and lower private pension accruals. On the other hand, these effects are mitigated through the design of pillars and their interaction. Mitigation is important to income security and stability in retirement and to post‐retirement income distribution. However, mitigation mechanisms come at the cost of incentives. Moreover, in many countries, the generosity of public benefits is set to decrease – increasing the importance of private pensions. This will shift risk and uncertainty from employers and pension institutions to individuals. Thus, risks and uncertainties related to private pensions will become more important, raising questions about the division of responsibilities between public and private pensions, and about the potential of mitigating such risk through pillar interaction. These concerns are further reinforced by labour market changes. Although a pension system free of distortions is inconceivable, this article seeks to contribute to addressing how mitigation should be designed, and how mitigation and risk sharing should be balanced against incentives, challenges which are as much political as technical.     

New Labour and Pensions Reform: Security in Retirement?

New Labour has defined the problem of security in retirement as one of undersaving and has sought to resolve it both by measures which encourage saving and by improving financial literacy. The article discusses both of these approaches, arguing that each is flawed and that, in addition, New Labour's pension policy exhibits several tensions which threaten to undermine the objective of providing a secure income in retirement.     

From pension funds to piggy banks: (Perverse) consequences of the Stability and Growth Pact since the crisis

As part of their strategy for economic and monetary union, European governments committed themselves to fiscal discipline – particularly by placing limits on annual deficits and on public debt. Subsequently, and as they sought to respond to the “current crisis”, they embraced the view that only if public finances were kept under control would sustainable recovery be possible. Rules of fiscal governance were strengthened. To help them meet these rules, the governments of many member States of the European Union made changes to their pension systems or to funds they had established specifically to pay the costs of population ageing. The intention was not to cut retirement benefits or to improve the efficiency of the relevant pension schemes and institutions. Rather, it was to free up resources immediately. Funded pension schemes and pension funds were treated like “piggy banks” that were raided when times became hard. Moreover, the policies pursued succeeded in meeting their objectives only because the system of national accounts according to which outcomes are judged does not recognize the way in which most of the fiscal gains are matched by future fiscal liabilities.     

Gender and proposed Auto‐enrolment in the Republic of Ireland: Lessons from the UK

The introduction of “soft” compulsion in the form of Auto‐enrolment into non‐state pensions has been seen as a key policy response to the challenges presented by an ageing population and concerns about under‐saving for retirement in the UK. Since its introduction in 2012, amongst eligible employees in the private sector, pension participation had risen by over 31 percentage points to 73% of eligible employees in 2016. Despite these trends, Auto‐enrolment in the UK has not been without criticism, particularly in terms of its exclusion of certain groups, including carers, amongst whom females are over‐represented. The Republic of Ireland (ROI) has recently announced its intention to implement an Auto‐enrolment pension scheme. As such, this article examines the UK's experience of rolling out Auto‐enrolment policy and considers lessons that could be learned by the ROI from the UK in its pursuit of Auto‐enrolment, with a particular focus on women's pensions. Initially it outlines the current Irish pension system, the gendered nature of pensions, and the proposed Auto‐enrolment system in ROI. Then it discusses the UK's experience of Auto‐enrolment, with a particular focus on gender, before examining the lessons the ROI can learn from the UK's Auto‐enrolment policy in relation to women and pensions. Finally, it concludes that Auto‐enrolment alone will not resolve the gendered nature of pensions in the ROI and calls for a gender‐based assessment of the proposed policy of Auto‐enrolment in the ROI.     

Contribution evasion: Implications for social security pension schemes

However well-conceived a contributory national pension programme may be, however sound the economic principles on which it is founded, irrespective of whether it is based on defined benefits or defined contributions or whether it is publicly or privately managed, if participants fail to meet their contribution obligations the pension scheme cannot achieve the objective of providing adequate retirement income for them and their dependants. Contribution evasion has obvious implications for individuals. But it also has implications for the State, which may be importuned to supplement inadequate pensions from general revenues. The nature of contribution evasion and the reasons why contributions are evaded are surveyed. Possible practical measures which have been applied to promote compliance are described and the dangers of contribution evasion to participants and to the State are outlined.     

The gender gap in pensions in Latin America

Lower female lifetime labour market participation rates, greater interruptions during their working lives, and wage gaps contribute to create gender gaps in pensions at the time of retirement. The design of social security systems may reinforce or attenuate these gaps. This article provides new evidence on gender gaps in access to pensions and in pension income in four Southern Cone countries in Latin America and analyses their evolution between 2000 and 2013, showing significant improvements in both gaps, with differential patterns by countries. The decrease in the gender gap in pension income has been particularly significant in Argentina and Brazil. In both cases, the largest increases in pension values during the period correspond to the lowest income percentiles, where women are overrepresented. The application of redistributive policies in these countries, aimed at reducing poverty and inequality but not necessarily focused on gender equity, has had positive and probably unintended consequences in terms of reduction in gender gaps in pensions.     

Can complementary pension plans help improve retirement income in the Dominican Republic?

In the 1990s, following the earlier example of Chile, pension system reforms were implemented in a number of Latin American and other countries. These reforms focused on introducing models of pension provision that were fully‐funded and privately managed. Although aspects of these reforms have been positive, for many persons covered by these systems retirement income is not adequate. The development of occupational pension plans may offer an alternative, complementary mechanism to help improve pension adequacy. This article discusses different complementary pension plan models and examines the case of the Dominican Republic. It argues that complementary occupational pension plans may be a viable policy option for this developing country.     

Australia's retirement income revolution: a Finnish system "down-under"

Most advanced industrial societies are confronting serious economic recession, and governments are seeking ways to stimulate economic growth and reduce government expenditure. For many countries these problems are compounded by aging populations and demographic changes. There are fewer people in the workforce, and more people in older age groups live longer and have increased expectations for retirement lifestyles. The result has been that many governments are radically transforming their systems of retirement income provision, often causing political, economic and social upheaval and widespread public anxiety. Australia is one country in which there have been huge changes in the retirement income system in the past 5 years. The system has been substantially privatized, and future retirement income will come from statutorily enforced earnings-related individual savings accumulated in decentralized private funds. Australia's new retirement income regime bears extraordinary similarities to the Finnish system of employment-related pensions, yet there was no reference to the Finnish system in the evolution of the new Australian system. There are lessons for Australia and for other countries in the long and successful operation of the Finnish pension system. This article first examines Australia's retirement income system, recent government policy changes and likely implications of these retirement policy changes for the future of Australia's traditional welfare state. Cross-national comparisons of the retirement income regimes in Finland and Australia, identifying international best practice in each country, comprise the second half of the article. Such comparisons will be of interest to policy-makers seeking new policy directions.     

A Disaster Foretold? The Case of the Personal Pension

With the creation of the State Earnings Related Pension Scheme (SERPS) in 1975, pensions policy in the UK was characterized by a consensus between the Labour and Conservative parties. By the mid 1980s, under the influence of New Right ideas, the Conservatives had broken with this consensus. Conservative pensions policy now centred on the ideological objectives of promoting individual property ownership and pension provision “independent”of the State. Such objectives were central to the creation of personal pensions under the 1986 Social Security Act. This article examines the political background to the emergence of this policy and seeks to evaluate how far the stated aims have been achieved. It does this by analysing the current controversy over methods of selling personal pensions and by looking at statistical evidence on the incomes of individuals who have taken out personal pensions. The argument concludes that personal pensions have been, predominantly, taken out by groups with low incomes, and the combination of low contributions and transaction costs threatens to lead to inadequate pension provision; such problems are likely to be particularly marked for women. In turn this conclusion, when set in the context of the tax regime applying to personal pensions, raises further doubts over the extent to which “independent”pension provision is likely to be achieved.     

The retrenchment of public pension provision in the liberal world of welfare during the age of austerity—and its unexpected reversal, 1980–2017

Pension system adaption during the “age of austerity” since 1980 is expected to vary between industrialized countries broadly in line with their membership of conservative, liberal, or social democratic worlds of welfare. Empirical testing on the liberal world focuses on the later period and differs in its conclusions. This paper is based on a systematic study of the scale, nature, and trajectory of change in six liberal pension systems between 1980 and 2017 using expenditure, economic, demographic, and social rights data. These data are analysed using a framework developed through critical engagement with Pierson's three welfare state change criteria and the welfare state “dependent variable problem.” The paper finds a significant retrenchment of public pension provision in most liberal welfare states after 1980 but largely during the first half of the period. This has been partly reversed in most countries since the mid‐1990s, though the scale of this reversal varies between countries. The recent rise of the state in liberal systems has been noted by some commentators, but to be properly understood, the paper argues, it must be considered in the context of the significant retrenchment, which preceded it. There is a scope especially for research on the broader social context of recent reforms, particularly how middle‐income groups were affected by retrenchment and how recent reforms have mitigated this.