Actuarial balance sheets as a tool to assess the sustainability of social security pension systems

The choice of the methodology used to produce a social security pension system's balance sheet is mainly determined by the system's financing approach. In this article, it is shown using the example of the Canada Pension Plan that if the assessment of the financial sustainability of a pay‐as‐you‐go or partially funded system is done through the means of an actuarial balance sheet, then the methodology used should take into account future contributions of current and future participants. The balance sheets produced using the open group approach, as well as methodologies used in United States and Sweden, are discussed.     

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.     

Kurt Lewin's Leadership Studies and His Legacy to Social Psychology: Is There Nothing as Practical as a Good Theory?

This paper re‐examines Kurt Lewin's classic leadership studies, using them as a concrete example to explore his wider legacy to social psychology. Lewin distinguished between advanced “Galileian” science, which was based on analysing particular examples, and backward “Aristotelian” science, which used statistical analyses. Close examination of the way Lewin wrote about the leadership studies reveals that he used the sort of binary, value‐laden concepts that he criticised as “Aristotelian”. Such concepts, especially those of “democracy” and “autocracy”, affected the way that he analysed the results and the ways that later social scientists have understood, and misunderstood, the studies. It is argued that Lewin's famous motto—“there is nothing as practical as a good theory”—is too simple to fit the tensions between the leadership studies and his own views of what counts as good theory.