The Debate on Pension Systems: The Paradigmatic Cases of Chile and Spain

This article is focused on pension systems in the light of two case studies that are antagonistic within the capitalist economy. On the one hand, the Spanish pension scheme, based on the principle of intergenerational solidarity, was achieved by the working‐class after decades of struggle. It constitutes the backbone of the Spanish social security system, thanks to the creation and development of indirect and deferred wages. On the other hand, the Chilean pension scheme, first imposed by the Pinochet dictatorship, is based on a funded system and private management. It rejects the principle of solidarity and, therefore, it makes impossible the construction of a decent pension structure. The comparison of the Spanish and the Chilean pension systems can be expressed in just one revealing fact: while the average pension in Spain is 79 percent of the last salary earned, benefits in Chile barely reach 33 percent for male workers and 25 percent for female workers. The analysis of both cases is framed in terms of the critique of political economy, in direct opposition to the current mainstream in economics. Instead of assuming methodological individualism and a harmonious view of human societies, as orthodoxy does, the critical paradigm conceives of capitalist economy as a dialectical process determined by the existence of social classes with different and opposed interests.     

Mandatory dividend rules and the investment decision: The case of Chile

Chilean companies are forced by law to distribute at least 30% of their liquid profits. The purpose of this paper is to analyze whether this mandatory dividend rule has an impact on investment decisions. Based on accounting data and by using the discontinuous regression approach, our results show that there are no significant differences between the investment plans of Chilean companies that pay dividends and those that do not. Moreover, consistent with the signaling hypothesis, our results also show that firms with a greater probability of paying an excess dividend (above the minimum required by the law) are those with more investment opportunities and more financial constraints.     

The recruitment and selection of pension trustees: an integrative approach

The role of a pension trustee is significant, which makes the recruitment and selection of labour trustees an important issue. In this article, we examine and combine aspects of two approaches to recruitment and selection: the political nomination model and the more professional HRM approach. We argue that an integrative approach would acknowledge the political, regulatory and organisational context while incorporating valid selection criteria such as domain‐specific skills and performance on the job. Such an integrated process can help trade unions in filling labour trustee positions with talented individuals who are more likely to be effective in achieving labour's goals in pension governance.     

The Chilean model

In 1981, Chile replaced its government-run pay-as-you-go pension system with a national system of individual Pension Savings Accounts managed by the private sector. The new system has contributed to the increase in the country's savings rate, the productivity of capital and the rate of economic growth. More important, Chilean workers now have property rights over their own pension contributions and enjoy much higher pensions than under the old system.     

随机工资下DC型企业年金的最优资产配置策略——基于鞅方法求解

研究了当工资为一个随机过程时,缴费确定型(DC)企业年金如何对股票、国债以及银行存款进行最优资产配置的问题。假设企业年金的投资目标为最终财富的期望效用函数最大化,利用鞅方法给出了此优化问题的解析解。结果表明,企业年金的最优投资策略由三部分组成:Merton投机策略、工资的收入效应投机策略以及工资的随机效应对冲策略。     

Costly arbitrage through pairs trading

We study the optimal trading policy of an arbitrageur who can exploit temporary mispricing in a market with two convergent assets. We build on the model of Liu and Timmermann (2013) and include transaction costs, which impose additional limits to the implementation of such convergence trade strategy. We show that the presence of transaction costs could reveal an endogenous stop-loss concern in a certain economy, which affects the optimal policy of the arbitrageur in significant ways. Using pairs of dual-listed Chinese stock shares as samples and a pairs trading strategy based on standard deviation of the spread as benchmark, we demonstrate the efficiency of the strategy implied by our model. Several extensions of our model are also discussed.     

我国养老基金投资的财务分析

养老基金在资本市场中的投资回报是养老基金增值的唯一途径,如何投资运营养老基金是养老金计划中最重要的财务决策。随着我国人口老龄化程度的提高,养老基金的支出压力越来越大。为此,有必要对我国养老基金的投资现状进行分析,探寻提高我国养老基金运作效率的方法和途径,真正实现养老基金的保值增值。     

Taking Friedman Seriously: Maximizing Profits and Social Performance*

abstract This paper examines the situation of firms that have two objectives: profit maximization and social performance. By looking comparatively at the cases of altruism, coerced egoism, and strategy, this paper uses the tools of microeconomics to define the optimal level of social output that should be produced in each case. We show that it is wiser for the firm to act strategically than to be coerced into making investments in corporate social responsibility. In addition, we argue that greater overall social output will be achieved by the strategic approach, than by the altruistic approach.     

From Bismarck to Friedman

Chile provides the most frequently quoted example of a change from an established state PAYGO pension system to a privately funded scheme based on personal savings. Most of the key results have been impressive and a lot of the often-heard criticisms of funded schemes have been disproved. A number of shortcomings remain. These shortcomings are seldom caused by features inherent to funded schemes, but rather by elements specific to the Chilean arrangement which could be altered given the political will.     

Shocks derived from mining windfalls and horizontal transfers: Exploring the permanent income hypothesis in Chilean municipalities from a spatial competition approach

We explore how spatial interaction affects the strategic use of municipal income when deciding between 1) an optimal long-run expenditure strategy versus 2) using the current income to finance current activities, a phenomenon known as the permanent income hypothesis. Even when this hypothesis is grounded in temporal logic, insufficient attention has been given to the impact of spatial dependence on this type of budget decision. Therefore, we present two reasons why spatial interaction adds new insight to this discussion. First, subnational governments located inside larger functional areas have lower average costs due to the population concentration, allowing for coordination between jurisdictions to achieve more power of negotiation and to potentially exploit economies of scale. Second, local government decision-making is not independent of other jurisdictions as municipalities would constantly evaluate the others’ actions regarding local tax effort, spending, and debt. While this spatial consideration remains a challenge for theoretical modeling, we offer empirical evidence to evaluate how robust the permanent income hypothesis is when geography is incorporated. Our empirical approach uses dynamic panel data with spatial dependence on debt, expenditure, and the error term. To evaluate our hypothesis, we exploit panel data from 320 Chilean municipalities between 2008 and 2020 and use two sources of income: non-matched grants via mining windfalls and horizontal fiscal transfers among cities. The evidence indicates that jurisdictions make backward-looking decisions regarding spending; that is, there are no significant differences between the short and long run. The results for debt, however, are not robust. Policy pertaining to the use of public resources should consider the spatial dependence between municipalities which should be a crucial factor in budgetary decision-making.     

Understanding pension communications at the organizational level: Insights from bounded rationality theory & implications for HRM

This paper applies concepts from bounded rationality theory to develop an integrative model to understand how pension scheme structure and pension scheme communication impact pension participation and contribution rates at organizational level. Organizational pension policies create framing effects that can have intended and unintended consequences depending on how they impact on employees' cognitive processes. Organizational pension communication policy impacts employee pension outcomes through the interaction between fast-acting, automatic System 1 and deliberative, calculating System 2 that typically endorses and occasionally overrides System 1 judgments. System 1 exhibits mental short-cuts (heuristics) and systematic biases. The likelihood of a System 2 challenge to System 1 depends on the personal, socio-demographic and economic characteristics of the individuals within the workforce. We propose that those within the HR function, who understand framing effects, can develop pension policies that positively affect pension plan outcomes at the organization level, specifically the pension participation and average contribution rates, using a combination of policies that in some cases promote System 2 endorsement and in other cases, System 2 engagement.     

The effects of pension rights and retirement age on training participation: Evidence from a natural experiment

This paper uses a natural experiment approach to identify the effects of an exogenous change in future pension benefits on workers' training participation. We use unique matched survey and administrative data for male employees in the Dutch public sector who were born in 1949 or 1950. Only the latter were subjected to a major pension reform that diminished their pension rights. We find that this exogenous shock to pension rights postpones expected retirement and increases participation in training courses among older employees, although exclusively for those employed in large organizations.     

Learning by doing: Active employer sponsored retirement savings plan participation and household wealth accumulation

This paper investigates the impact of household exposure to employer pension plan features using the Health and Retirement Survey. We investigate whether exposure to active management (choice) or participation in plan-sponsored financial education seminars impacts household portfolio allocations and wealth. We consider interactions between pension design and investment patterns outside of workers’ pension plans, utilizing two parametric estimators: the random effects probit and the multivariate probit. We extend our results non-parametrically via propensity score matching. We find repeated evidence that both of the plan features improve asset allocations and financial outcomes for recent retirees, especially when used together.     

Increasing Corporate Social Responsibility Through an Employee-centered Approach

As the Corporate Social Responsibility (CSR) literature has developed, it appears that a dominant paradigm has emerged. Both scholars who study CSR and those who write about its organizational application have largely converged on CSR as an organizational strategy issue. Viewing CSR as a matter of top-level strategy unwittingly links it to a particular conceptualization of organizational change—a top-down perspective. We suggest that the dominance of this traditional view of organizational change is limiting the study of CSR. Thus, we seek to increase awareness of an alternative model, one that complements the strategic view. Specifically, we describe a model of CSR organizational change that suggests two things. First we assert that significant change can be initiated at lower organizational levels as well as from the top. And second, we suggest that the change can be accomplished in small steps and involve only a portion of the organization, as opposed to an overarching organizational strategy. We present our employee-centered approach to CSR change as an addition to the traditional top-down view.     

A logistics model for emergency supply of critical items in the aftermath of a disaster

This paper proposes a logistics model for delivery of prioritized items in disaster relief operations. It considers multi-items, multi-vehicles, multi-periods, soft time windows, and a split delivery strategy scenario, and is formulated as a multi-objective integer programming model. To effectively solve this model we limit the number of available tours. Two heuristic approaches are introduced for this purpose. The first approach is based on a genetic algorithm, while the second approach is developed by decomposing the original problem. We compare these two approaches via a computational study. The multi-objective problem is converted to a single-objective problem by the weighted sum method. A case study is presented to illustrate the potential applicability of our model. Also, presented is a comparison of our model with that proposed in a recent paper by Balcik et al. [6]. The results show that our proposed model outperforms theirs in terms of delivering prioritized items over several time periods.     

European Pension Funds and Sustainable Development: Trade‐Offs between Finance and Responsibility

Pension funds try to account for sustainable development in their operations. This mainly translates in responsible investing. We investigate how this interacts with the financial objectives. We use a survey of more than 250 pension funds based in 15 European countries. Multinomial logistic regression is used to find out how pension funds trade off sustainable development and financial objectives. Our findings suggest that pension funds that have not included responsibility in their strategy and investments have a clear priority regarding their financial performance. Pension funds who integrate sustainable development in their strategy can bring balance between finance and responsibility. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Corporate sustainability and institutional shareholders: The pressure of social responsible pension funds on environmental firm practices

This paper analyses the role of social responsible (SR) pension funds as influential institutional shareholders in the corporate sustainability of investee firms. We study the influence of 197 UK SR pension funds on 1,253 firms with 31 environmental, social, and governance (ESG) indicators from 2002 to 2018. According to the indicator nature, we perform logit and ordinary least square (OLS) estimations with panel error correction models to control causality. Our results show that SR pension funds significantly impact on 41.93% of the ESG indicators studied. We find that larger pension‐fund shareholding positively influences on ESG firm performance and encourages proactive behaviour towards environmental practices. Firms with larger pension‐fund shareholding are more likely to use renewable energies and disclose environmental information, increasing the firm transparency towards stakeholders. This study contributes to understand that, besides stakeholders, institutional shareholders (SR pension funds) demand sustainable development and are able to transfer important values for the society and the environment to corporate governance.     

新形势下我国城市养老模式的思考

随着人口老龄化速度的加快,如何科学、妥善的解决好数量日益庞大的老年人的养老问题是国家及社会必须面对的现实问题。文章从我们国家传统的家庭养老模式和已经初步建立的并具有一定规模的居家养老模式和机构养老模式入手,分析了不同的养老模式的现实意义及存在的不足,提出了解决这些问题的思路和方法。     

The Brazilian bankruptcy law reform,corporate ownership concentration,and risk-taking

We investigate whether a bankruptcy reform, which increased creditors' protection, affected the risk taking of Brazilian firms. Collecting data from Brazilian (treatment group) and Argentinian, Chilean, Colombian, Mexican, and Peruvian firms (control group) and using a difference-in-difference technique, we show that Brazilian firms with concentrated ownership structure decreased risk taking after the reform. Our results suggest that these firms reduced risk in response to increasing creditors' protection, possibly because controlling shareholder fear losing control. Moreover, our results indicate that the reform probably provoked a wealth transfer from minorities to controlling shareholders.     

内部收益保证下养老基金的最优资产配置

研究内部收益保证下DC型养老基金的最优资产配置问题。利用鞅方法，在HJM利率期限结构下求得了最优资产配置的显性解。结论表明最优投资策略分为四部分：投机策略、利率套期保值策略、基准组合的复制策略及一揽予债券卖空策略。最后对最优策略的动态行为进行了数值分析。