Search Results (30)

Financial stability analysis requires volatility modeling, especially in emerging nations where pension fund systems are very vulnerable to macrofinancial risks. In order to examine the volatility dynamics of Romania’s private pension system, this study uses daily net asset value (NAV) data from 2012 to 2024 to evaluate four GARCH-type models: standard GARCH (sGARCH), exponential GARCH (EGARCH), Glosten–Jagannathan–Runkle GARCH (GJR-GARCH), and component GARCH (C-GARCH). The analysis includes domestic and international equity indices (BET, STOXX), government bond yields (ROMGB 10Y, ROMANI 5Y), short-term interbank rates (ROBOR ON), and exchange rate fluctuations (RON/EUR). Current findings indicate that EGARCH captures asymmetric fluctuations in pension fund performance, where positive shocks generate larger increases in volatility than negative ones, highlighting an atypical asymmetry pattern. Furthermore, the stabilizing effects of government bonds are overshadowed by stock market behavior, which becomes the primary driver of risk. Fluctuations in exchange rates further increase volatility, especially in markets vulnerable to external disturbances. The findings offer empirical evidence for the necessity of more cautious risk management approaches and highlight the importance of regulatory oversight in maintaining market confidence. The study underscores the importance of customized allocation frameworks that reduce vulnerability to disruptive events while maintaining prospects for sustained growth. This new dataset contributes to enhancing the comprehension of pension fund volatility within the context of emerging markets. These insights can assist managers and policymakers seeking to fortify retirement outcomes. Full article

As pension benefits from statutory public schemes become less generous, and many countries face pension-savings crises, the willingness to participate in supplementary retirement saving instruments becomes crucial for sustainable financial well-being. The main objective of this article is to present how trust and financial literacy influence the choice of sustainable auto-enrolment pension scheme as a private and supplementary pension savings. The study highlighted factors influencing participation in auto-enrollment and private supplementary pension savings. The study focuses mainly on financial literacy and trust. We used the CAWI method with 857 interviews in Poland—the first country in Central and Eastern Europe to introduce an auto-enrolment pension system. Our study uses multivariable data-mining tools, and several regression models were applied. We used Logistic Regression (LR), Multivariate Linear Regression (MLR), and Factor Analysis of Mixed Data (FAMD) to support the LR analysis. We propose four regression models. Our findings present that: 1. The lower the consumer’s knowledge level, the more their decisions are based on trust. 2. Trust in the state, rather than trust in financial institutions, plays a crucial role for people with low financial literacy, which is a critical factor in choosing the auto-enrolment option for pension savings. 3. Men had higher odds of auto-enrolment pension saving than women. 4. Employees of economic universities and academics had higher odds of participating in capital pension plans than those of general universities and non-academics. Our findings can signal to governments and policymakers about factors influencing the choice of auto-enrolment supplementary retirement savings. These findings strengthen the role of sustainable economic education. Full article

The Hokuriku Shinkansen is among the five main Shinkansen lines in Japan. It starts from the capital, Tokyo, and passes through the Hokuriku region (Nagano City, Toyama City, and Kanazawa City) before reaching the Kansai region (Kyoto City and Osaka City). In Japan, the Hokuriku Shinkansen is being developed to increase the number of visitors in the area by shortening travel times and ensuring transportation networks in the event of a disaster; the Kanazawa–Tsuruga extension was opened on Saturday, 16 March 2024. The shortened travel times with this opening are expected to increase the number of visitors to the Hokuriku region and other regions, such as the Tokyo metropolitan area. The Tsuruga extension opening will connect the Hokuriku region with the Tokyo metropolitan area through direct service; however, travel between the Kansai and Chukyo regions will require transfers at Tsuruga Station, which would reduce convenience. Consequently, the flow of people in the Hokuriku region is expected to change significantly after spring 2024. Therefore, this study conducted a questionnaire survey of Kanazawa residents in Ishikawa Prefecture prior to the opening of the Tsuruga extension to analyze its effect on the choice of modes of transportation for travel to the Kansai region. The Hokuriku Shinkansen was found to be the most popular route for travel to the Kansai region after the opening of the Tsuruga extension, and the Hokuriku Shinkansen users prioritized comfort during travel and shorter travel times. Moreover, a high proportion of Hokuriku Shinkansen users were unemployed and received pensions, whereas a high proportion of private automobile users were students, housewives, or other people with no income. Full article

The rapid growth of the elderly population is a major global demographic and social issue. Unfortunately, there is a shortage of pension plans and social security programmes for this population in developing countries, which has severe consequences for their quality of life and well-being. In this article, we aim to better understand the pension systems in developing country contexts such as Ghana, Pakistan, and Myanmar by reviewing official government materials (for example, pension reports) and the published literature to suggest relevant policy recommendations. We observed several policy implementation gaps and inequities in pension schemes for older people, specifically for informal and private sector workers. Considering the size of formal versus informal economies and the level of development index of each country, we suggest a wide variety of options for pension policies, financing, designing cash benefits, and pension payments to cover all older citizens. This article addresses the unmet needs of the elderly and their wider economic sustainability to ensure social justice and resource utilisation. Governments in developing countries should embrace and establish unique, inclusive, and friendly policies encompassing the informal sector to warrant older adults’ functional and social well-being with dignity and honour. Full article

China has been successful in getting her people to live longer. But, merely adding years to life and not life to years poses immense socio-economic challenges. However, not much is known about the effects of government policy and program interventions on changes in how well the elderly live over the years. Accordingly, we cross-temporally meta-analyzed 45 research reports (N = 36,352) that utilized the health-related quality of life (HRQoL) scale (SF-36) from 2000 to 2020. We found that: (1) the bodily pain, general health, vitality, and mental health of the elderly deteriorated over time; however, their physical and emotional roles, as well as their social functioning, improved with time; (2) the rising dependency ratio impoverished the HRQoL of the elderly; (3) the HRQoL indicators of the elderly revealed positive gains under the home-based care model whilst they showed a downward trend under the institutional pension model; (4) the HRQoL indicators of the elderly in economically developed areas produced mixed results; but, they all worsened over the years in economically underdeveloped areas. Thus, more investment efforts from the government and private entities are needed to reduce the dependency ratio and to improve the lives of the elderly under institutional care and/or in economically underdeveloped areas. Full article

The landscape of employer-sponsored retirement plans in the U.S. has changed dramatically during the past few decades as more and more private-sector employers have decided to freeze or terminate traditional pension plans. Defined contribution (DC) plans became the primary choice or the only choice for employees to participate in employer-sponsored retirement plans. In the next ten to twenty years, the income from pension plans will only count for a third of the total retirement income for GenXers when compared to their baby boomer counterparts. It is important for research to provide evidence on how the change in retirement income resources impacts retirees’ retirement security and financial wellness. Using Health and Retirement Study (HRS) data before and during the COVID-19 pandemic, this study examines the association between annuitized income and various measures of older Americans’ financial well-being over time, particularly during the pandemic. This study finds that receiving annuitized income has a statistically significant relationship with reduced subjective financial well-being for both measurements, while only one of the measures of objective well-being, having liquid assets greater than the median household income, has a statistically significant positive relationship with receiving annuitized income. Full article

The private pension is a system designed to maintain an income level during passive periods by utilizing the income earned during active working years. It complements the mandatory retirement systems of the public sector and is based on a voluntary participation structure. Additionally, it serves as an investment and savings tool with the ability to provide long-term funds. The legislation for the private pension system was enacted in Türkiye in 2001, and it was implemented in 2003. In addition, a government contribution program was initiated to promote the system in 2013. An automatic enrollment system was introduced in 2017. The effectiveness and performance of individual pension companies play significant roles in the system. This study aims to measure the performance of individual pension companies operating in Türkiye using the gray relational analysis method, which is an effective measurement method, for the years 2016–2022. Subsequently, based on the measurement results, recommendations will be provided. Full article

This research uses representative survey data to elicit the annuitisation preferences of members of the Slovak-funded private pension pillar. The research explores the impact of socioeconomic and sociodemographic variables, as well as some exogenous factors on annuity choices. The following choices are analysed: (i) taking an annuity upon retirement; (ii) delaying the uptake of an annuity and accumulating savings beyond the official age of retirement; and (iii) leaving accumulated wealth to heirs (bequest motive). The paper provides some original contributions. Firstly, it relates annuity choices to intrafamily risk sharing. Attention is paid to household structure, income levels, and the presence of dependent children. Secondly, the importance of diverse information resources on the formation of annuity preferences is examined. We found that professional advice provided by financial institutions and government bodies was associated with higher probabilities of annuity uptake. A disproportional reliance on informal channels may explain the higher preference towards bequest motives in rural areas. Thirdly, annuity choices are studied in relation to alternative sources of income in old age. A combination of social security pensions and bequest-sharing arrangements may offset the need for the annuitisation of pension wealth. Full article

This paper employs data from an original survey to analyse the annuity preferences of members of the Slovak-funded private pension pillar. The focus is on the impact of socioeconomic variables as well as various behavioural attitudes upon annuitisation decisions. The research first considers some well-known behavioural factors (framing, mental accounting) and then turns to some underresearched traits (indulgence, self-control) and behaviours (compulsive shopping, saving habits) and links them to annuity choices. Moreover, the research studies alternative allocations of a lump sum and relates them to annuitisation decisions. Indulgence emerged as a significant negative predictor of annuitisation. This result likely refers to preferences towards hedonic lifestyles in early retirement. Interestingly, low self-discipline was also significant but positively related to an intention towards annuity purchases. People who are aware of their low financial discipline may introduce internal self-protection mechanisms and resort to tried and tested financial products to avoid anticipated feelings of regret and desperation. Annuitisation, in this case, is a regret avoidance behaviour. Full article

The role of the voluntary pension fund is to ensure the preservation and increase of their value by investing the collected payments and contributions, and thus the later amount of private pensions for payment. Savings for a private pension is a long-term investment and aims to preserve a certain level of the investor's standard of living even in times when monthly incomes begin to fall due to retirement. The advantage of investing in a voluntary pension fund compared to individual investment is that it is possible to diversify the risk on a larger number of securities with larger funds invested. Full article

As the aging of Chinese society continues to deepen, it is particularly important for the development of the national elderly care service industry to further strengthen the government’s supervision of private pension institutions and improve their management awareness of standardized operations. The strategic behaviors among the participants of senior care service regulation have not been well studied yet. In the process of senior care service regulation, there is a certain game association among three stakeholders, namely, government departments, private pension institutions, and the elderly. This paper firstly constructs an evolutionary game model including the above three subjects and analyzes the evolutionary path of strategic behaviors of each subject and the evolutionary stabilization strategy of the system. On this basis, the feasibility of the evolutionary stabilization strategy of the system is further verified through simulation experiments, and the effects of different initial conditions and key parameters on the evolutionary process and results are discussed. The research results show that (1) There are four ESSs in the pension service supervision system, and revenue is the decisive factor that affects the evolution of the stakeholders’ strategy. (2) The final evolution result of the system is not necessarily related to the initial strategy value of each agent, but the size of the initial strategy value will affect the rate of each agent’s evolution to a stable state. (3) The increase in the success rate of government regulation, subsidy coefficient and punishment coefficient, or the reduction in the cost of regulation and the fixed subsidy for the elderly can effectively promote the standardized operation of private pension institutions, but the large additional benefits will lead to their tendency to operate in violation of regulations. The research results can provide reference and a basis for government departments to formulate the regulation policy for elderly care institutions. Full article

In many countries around the world, demographic and civilization changes have brought about the phenomenon of aging societies. This phenomenon affects the economy, especially the pension and health care systems, causing difficulties in their financing. The implementation of a policy that would effectively manage the problem of the longevity risk is thus required. Using housing resources and private health insurance to improve retirees’ living standards may serve this purpose. The instruments we propose comprise two variants of contracts: the first for a marriage, the second for an individual client. We analysed the cash flow in both the cases. The results suggest that the amount of cash flows related to reverse equity and dread disease insurance benefits depends on the spouse’s economic status, age, and health conditions. The benefits of the two variants of the contract vary. This paper examines numerous strategies for selecting the type of the contract, taking into consideration the abovementioned factors. Full article

We examine the future benefits of the Israeli privatized pension system, which is considered as a model of transition to funded pension systems worldwide. This research is based on an extensive database obtained from one of the largest traditional private funds in the market. The results paint a concerning picture regarding the adequacy of benefits and quality of life in old age. Israel’s radical privatized pension model signals a warning to other nations. We show that, even with high returns, most individuals cannot handle the magnitude of financial and labor risks accumulated during their career and retirement. We recommend more balanced government intervention as well as the use of risk-sharing mechanisms such as providing minimum pension guarantee and strengthening the unfunded social security pillar. Full article

A common response in public pension systems to population ageing is to link pensions to observed longevity. This creates an automatic stabiliser that arises from the valuation of a private actuarially funded system. However, no private pension plan mechanism has been articulated to adapt to this ageing in relation to the increased costs it entails. Private pension plans focus on saving for retirement; capital is accumulated to pay for it. However, perceptions of health status change over time and, as retirement age approaches, concerns about long-term care (LTC) increase. Moreover, there is not enough time to plan for it sufficiently in advance. This paper proposes to incorporate a mechanism to add an allowance to the financial pension (retirement, disability, rotation) to cover LTC within a private defined benefit pension plan, in the case of a pensioner becoming dependent. Depending on a pensioner’s health status, both the expected number of payments and their intensity are transformed. For this purpose, a mechanism is defined (through Markov chains) to adapt the amount of LTC support to a beneficiary’s health-related life expectancy. The study’s main contribution is that it establishes a private pension plan model that offers to incorporate dependency aid through this mechanism into the economic pensions without increasing the total cost of the plan. It adapts to life expectancy according to a person’s state (healthy, disabled, dependent). Full article

Thailand recently reached “aged” society status, signifying that over twenty percent of the population is over sixty. Considering that Thailand has a low literacy rate, a fractured pension system, and no regulations that could provide sufficient income to cover basic needs after retirement, there will be economic repercussions if the situation is not handled soon. The government and financial institutions have been encouraging Thai citizens to prepare retirement plans but lack understanding of the root causes of being unprepared for retirement. The objectives of this qualitative research were to explore the behavior, knowledge, and preparedness towards retirement in governmental and private wageworkers. Moreover, the study aims to identify the pain points of being unprepared for retirement and deliver the optimal solutions and sustainable retirement plans suitable for each segment. This article employed a sample of 46 wageworkers in Khon Kaen, Thailand with ages ranging from 20 to 59 years old. Qualitative semi-structured in-depth interviews and qualitative content analysis were conducted with the respondents asking about their income, expenses, pains, and problems towards saving for retirement, their desired outcome after they retire, and how they would achieve it. The framework used for the in-depth qualitative interview was by utilizing the customer, problem, and solution zoom tool. The research contributions were to facilitate Thai citizens being ready for retirement stages and overcome post-retirement risks sustainably. The results revealed that the sample could be divided into four segments by their characteristics. Two low-income segments share the same traits and behaviors that can prove that financial literacy plays an essential role in retirement readiness. Lower-income wage workers do not have their money put in place to prepare for retirement. Additionally, this article discussed the study’s implications for wageworkers, employers, and the Thai government. This article recommended that Thai citizens should accumulate wealth in various ways, including investment in financial assets and earning additional income from a second job. Employers should provide suitable retirement contribution schemes. The government should launch a policy enabling above-60-year-old seniors to continue working. Full article