Equity Valuation Effects of the Pension Protection Act of 2006*

We investigate the equity valuation effects of the Pension Protection Act of 2006 (PPA 2006). The PPA 2006 has two main provisions: (1) firms must fully fund their pension plans within seven years (previously allowed 30 years to fund 90 percent of the pension liability) and (2) firms receive a tax deduction for contributions up to 150 percent of the pension liability (previously 100 percent). After controlling for the effects of SFAS 158, growth opportunities, the cost of external funds, and other information released during our sample period, we examine pension firms’ abnormal returns surrounding key dates in the legislative process leading to the adoption of the PPA 2006. First, we find a mean negative abnormal return of ?4.20 percent during the period in which the PPA 2006 was first voted on by Congress. The mean (median) firm in our sample experienced a $310 million ($60 million) decline in market capitalization. Second, we find that the valuation effect was more negative for firms with larger unfunded pension liabilities and larger capital expenditure requirements, while firms with higher marginal tax rates experienced a positive effect. Third, we find no evidence of differential valuation effects for firms in different “at risk” categories as defined by the PPA 2006. Finally, we find a significant number of pension freezes occurred during our sample period. Our results are stronger when excluding these firms from our sample.     

Pension Participants’ Attitudes,Beliefs, and Emotional Responses to the New Dutch Pension System

De Economist - As of 2022, the Dutch pension system will be overhauled. The success of this as well as other pension reforms also depends on how participants react to and accept such changes. We...     

Performance Persistence of Dutch Pension Funds

This paper studies the investment performance of pension funds with a focus on their ability in implementing their intended investment strategy. We use a sample of Dutch industry-wide pension funds, which are obliged by law to report their investment performance according to the so-called z-score. The z-score is a risk-adjusted performance measure with benchmark settings predefined by Dutch law. We find that pension funds as a group cannot beat their self-selected benchmarks consistently. Applying a cross-sectional portfolio approach we find evidence that the largest pension funds outperform the smallest funds.     

农村养老保险、养老金待遇与最优政策组合

采用OLG模型考察了农村养老保险个人缴费率、集体补助率、地方政府补贴率、基础养老金率和人口增长率对资本积累、人均消费和养老金的影响,并寻求政策变量最优组合。研究发现,提高个人缴费率会增加养老金;提高集体补助率、地方政府补贴率以及人口增长率下降都会增加资本劳动比、人均消费和养老金;提高基础养老金率会降低资本劳动比和人均消费而增加养老金。同时,最优的地方政府和集体补贴率随最优基础养老金率同方向变动。若最优基础养老金率不变,则人口增长率小幅变动会引起最优地方政府和集体补贴率大幅反向变动。根据影响方向和力度,应提高个人缴费率和集体补助率,调整财政支出结构以维持现有基础养老金率、相应提高地方政府补贴率,控制人口增长率。     

地理位置对公办养老机构与民办养老机构竞争关系影响研究

文章在考虑养老机构竞争受地理位置影响的基础上,建立了公办养老机构与民办养老机构的博弈模型。结果表明:老年人分布结构变化对公办及民办养老机构的利润带来相反方向的变化,且不完全市场覆盖下老年人分布结构变化对养老机构的影响程度更大;当政府对养老机构投入差距较小时,民办养老机构选址可以离公办养老机构更近,当投入差距较大时,选址应适当离公办养老机构更远;老年人对距离的厌恶程度越大,完全市场覆盖情形下养老机构的利润有所增加,不完全市场覆盖情形下的养老机构利润有所减少;养老机构周边老年人密度越大,服务成本系数差距及距离厌恶系数对其利润的影响越大。     

The Pension Age as a Factor Regulating the Deficit of the State Pension System

Contrary to the widely held attitude towards the necessity of immediately raising the retirement age, this article demonstrates the absence of demographic conditions for changing the existing regulations in granting pension insurance. The demographic factors are recognized as the basic development conditions of the state pension system; however, they have a multichannel impact on it, which requires a holistic and qualified analysis of all the relevant parameters for the governmental regulation. The pension age is viewed from the perspective of achieving the objectives of pension reform and strategic benchmarks in the long-term development of the Russian Pension system.     

农村社会养老保险收入再分配模型及实证分析——基于新农保的实践

2009年,我国农村社会养老保险在老农保基础上进行了制度创新,在坚持个人账户的同时,引入财政直接补贴的基础养老金制度,形成新农保制度框架,经试点后于2014年2月推广为城乡统一的居民社会养老保险制度。发端于新农保的居民社会养老保险改革具有更强的收入再分配特点,促进了社会公平。文章基于新农保实践,构建净收益收入再分配模型,通过实证分析测算代际内部、代际之间和城乡之间养老金收入再分配效果。     

Differentiating Indexation in Dutch Pension Funds

Funded social security programs are particularly vulnerable to economic and financial market shocks. As a consequence of the recent crisis, a large fraction of the Dutch pension funds had to submit restoration plans for the recovery of their buffers. Such plans will have to rely primarily on a mix of reduced benefit indexation and increased pension contributions. Hence, a discussion has emerged whether indexation should be differentiated across the various groups of participants in a pension fund. We investigate this issue numerically, developing an applied many-generation small open-economy OLG model with heterogeneous agents. The pension system consists of a first-pillar PAYG component and a second pillar with a pension fund. In our stochastic simulations, we hit the economy with a variety of unexpected demographic, economic and financial shocks. We compare uniform indexation of pension rights across all fund participants with alternatives such as status-contingent indexation in which pensions are protected against price inflation. While the aggregate welfare consequences are small, group-specific consequences are more substantial with the workers and future born losing and retirees benefitting from a shift away from uniform indexation. The exception is a scheme which links indexation directly to the fund’s asset performance. Under this scheme the retired benefit without other groups losing. The welfare effects are primarily the result of systematic welfare redistributions rather than of shifts in the benefits of risk sharing. Contribution rates always have to rise substantially from their initial levels to maintain the system’s sustainability. An increase in the retirement age that leaves existing pension rights untouched does little to avoid this rise with its adverse labour market consequences.     

维吾尔族传统养老文化与社会养老方式的对接

在新疆农村社会养老保障体系的构建过程中,养老文化,特别是少数民族养老文化起着非常重要的作用。新疆各少数民族长期以来已形成了尊老爱幼、邻里帮助、社区互助和以孝为核心的传统养老文化。这种养老文化在促进新疆农村社会养老保障体系构建的同时,也有一定的负面影响。因此,我们应吸取其合理成分,坚持社会主义养老文化的主导地位,积极引导传统民族养老文化与社会主义社会相适应,建立具有民族特色和地方特色的现代养老文化。     

中国人口年龄结构与养老保险制度的福利效应

预测表明,中国人口老龄化程度则在2005年以后不断增加;与此同时,在2030年以前城镇有效劳动力数量不断增加,随后会下降。在此背景下中国的养老保险制度应该在多大程度上发挥再分配的功能是养老保险制度改革需要确定的一个原则。采用中国的参数．评价养老保险制度的福利效应是本文的主要目的。养老保险的福利效应对不同时期出生的人有所差异,如果政府的目标函数兼顾效率和公平。可以得到一个对于社会总福利而言最优的养老保险规模。我们的模拟表明一个合适的现收现付制的养老保险制度在中国可以改进社会总福利。     

Pension principles in the Swedish pension system

This article analyses the role of pension principles of funding and benefit provision for the development of the Swedish pension system. Focusing on four major public pension reforms in the twentieth century, it discusses why certain pension principles were used and under what circumstances they were more or less likely to change. The analysis shows that change was implemented to a large extent as a response to the previous pension system failing to fulfil its intended purpose in terms of financial stability, work incentives and redistribution.     

Pension fairness in China

The most populous country in the world, China faces immense socio-economic challenges providing adequate pensions to its growing elderly population. In that country, pensions available to older people vary considerably across the country's various pension schemes. This paper calculates the fairness coefficients of these pensions based on pension income, contributions, demand, and generational gap. The analysis shows that the pension fairness coefficients are 0.53, 0.38, 0.95, and 0.82, respectively. Synthesizing pension income, contributions, demand, and generational gap, the paper suggests that, in China, old-age pensions across different schemes are absolutely unfair. Finally, it analyzes the superficial and deeper factors behind pension unfairness in China before providing policy recommendations for improving the fairness of the country's pension system.     

建立强制性企业年金制度探讨

目前在探讨中国企业年金制度的构架时,部分学者认为应发展为强制的企业年金计划,而更多的学者是将非强制性作为既定的前提。通过比较分析强制性与自愿性企业年金计划的利弊,探讨中国在强制性和自愿性企业年金制度的选择中需考虑的问题,可以认为在现有国情和制度框架内,自愿企业年金计划更为合理。但是,如果制度框架和国情发生了变化,是否仍实行自愿企业年金计划就值得重新探讨。     

Pension Challenges and Pension Reforms in Oecd Countries

The 30 OECD member countries have very diverse pension systems.Current old-age public pension spending varies between lessthan 1 and more than 10 per cent of gross domestic product (GDP).Public spending on pensions per person aged 65 or over variesfrom less than 15 to more than 40 per cent of economy-wide GDPper head. For workers entering the labour market today, thetarget pension from all mandatory sources for an average earnervaries between 30 and 100 per cent of individual earnings. Recentpension reforms have a number of common themes. First, pensioneligibility conditions have been tightened. Second, the indexationof pensions in payment has become less generous. Third, somepension schemes link benefit levels to changes in life expectancy.Finally, a number of countries have introduced defined-contributionpensions: privately managed schemes where the pension benefitdepends on contributions and investment returns. Footnotes ¹ E-mail addresses: peter.whiteford{at}oecd.org; edward.whitehouse{at}oecd.org     

Pareto Optimal Pension Risk Allocations

De Economist - We consider a funded pension system where collective risks, in a simple Black-Scholes financial market, are allocated to the retirement savings of individual participants. In...     

State Pension Accounting Estimates and Strong Public Unions

Concerns are commonly raised that strong public unions extract generous pension benefits from state governments and are the cause of states' burdensome pension obligations. Prior research (Anzia and Moe 2015) finds evidence supporting such concerns. Consistent with incentives to minimize such perceptions, our findings suggest that state pension plans with stronger public unions select higher discount rates to improve reported funding levels. While riskier asset allocations are used to support the higher discount rates (which equal the expected return on the plan assets), most of the higher rates appear opportunistic. In addition, consistent with a desire to avoid drawing attention to persistent plan underfunding, our evidence indicates that stronger union plans are less likely to select longer amortization periods to recognize pension deficits when underfunding is larger. We do not, however, find evidence for asset smoothing periods being used to delay the recognition of investment losses on plan assets. Together, our findings suggest that stronger union plans take steps to make their pension obligations look less burdensome to the public.     

养老保险基金的安全运行问题

针对我国目前养老保险基金运行中存在的问题,提出适当调整个人账户养老金支付办法、严格执行法定退休制度、出售和划拨国有存量资产逐步“明偿”隐性债务和做实个人账户、提高政府财政对养老保险的补助支出、对养老保险基金进行有效投资运营使之保值增值等具体建议。     

Pension reform and saving in Britain

The paper examines the pension programme in Britain, focusingon reforms that have increased the fraction of the work-forceopting out of public provision and that have permitted individualsto choose their private pension provider. It also examines theissue of pension provision and household saving. The paper highlightsthe disparities in retirement saving behaviour across typesof pension provision and different households. The paper discussesthe policy issues of the adequacy of household saving, and theimpact of pension reform on household saving and the publicfinances.     

Operations of a Pension Fund after the Asian Crisis: The Thai Experience*

During and after the Asian crisis, institutional investors and pension funds in Asian financial markets have been confronted with a number of difficulties effecting their performance and the way they carry out their role within the national pension system. We analyze these problems by comparing the actual investment policy of an institutional investor with an optimal investment strategy derived from the insights of modern portfolio theory. We also analyze whether the organizational set‐up of a pension fund allows it to adequately perform its role within the pension system. As an example, we examine the operations of the Thai Government Pension Fund (GPF). We find that allowing international investments and reducing restrictions on equity investments while lowering the implicit requirements for investments in government debt would allow the GPF to further diversify its investment risk and to increase its risk‐adjusted return. We also show that some changes in the governance structure of the GPF would lower the occurrence of conflicts of interest for the management and increase the efficiency of the GPF operations.     

The Role of Pension Business Benefits in Institutional Block Ownership and Corporate Governance*

We investigate whether potential pension contracting benefits lead institutions that provide pension services to acquire ownership blocks in firms and the implications of such blockholdings on the firms' corporate governance. We use the 2006 Pension Protection Act, which expanded pension participation in certain states, as a quasi-exogenous shock and find an increase in block ownership by pension-providing institutions in firms with substantial operations in affected states. Further, we find that the acquisition of a large block increases the likelihood that the institution will provide future pension services to the firm. With regard to corporate governance, we find that the acquisition of large pension blockholdings is associated with higher CEO pay and lower CEO turnover following poor financial performance. However, contrary to the prediction of the private benefits hypothesis, we do not find consistent evidence that large pension blockholdings are associated with declining firm profitability, suggesting that pension institutions are incentivized to exert monitoring to preserve the investment value of their blockholdings. Overall, our evidence is consistent with pension service institutions acquiring ownership blocks to obtain pension contracts, but our evidence does not support the prediction that they use their influence to compromise shareholder value.