Social Security and Pension Reform: International Perspectives
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Upjohn Press Upjohn Research home page 1-1-2014 Social Security and Pension Reform: International Perspectives Marek Szczepański, Editor Poznań University of Technology John A. Turner, Editor Pension Policy Center Follow this and additional works at: https://research.upjohn.org/up_press Part of the Labor Economics Commons, and the Retirement Security Law Commons Citation Szczepański, Marek and John A. Turner, eds. 2014. Social Security and Pension Reform: International Perspectives. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research. https://doi.org/10.17848/ 9780880994705 This work is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 4.0 License. This title is brought to you by the Upjohn Institute. For more information, please contact [email protected]. Job Name: -- /356308t Social Security and Pension Reform In order to view this proof accurately, the Overprint Preview Option must be checked in Acrobat Professional or Adobe Reader. Please contact your Customer Service Rep- resentative if you have questions about finding the option. Job Name: -- /356308t In order to view this proof accurately, the Overprint Preview Option must be checked in Acrobat Professional or Adobe Reader. Please contact your Customer Service Rep- resentative if you have questions about finding the option. Job Name: -- /356308t Social Security and Pension Reform International Perspectives Marek Szczepański John A. Turner Editors 2014 W.E. Upjohn Institute for Employment Research Kalamazoo, Michigan In order to view this proof accurately, the Overprint Preview Option must be checked in Acrobat Professional or Adobe Reader. Please contact your Customer Service Rep- resentative if you have questions about finding the option. Job Name: -- /356308t Library of Congress Cataloging-in-Publication Data Social security and pension reform international perspectives / Marek Szczepanski, John A. Turner, editors. pages cm “This book is based largely on the 2012 conference of the European Network for Research on Supplementary Pensions (ENRSP), held at Poznan University of Technology, Poznan, Poland, on September 13-14, 2012”—Preface. Includes index. ISBN 978-0-88099-467-5 (pbk. : alk. paper) — ISBN 0-88099-467-3 (pbk. : alk. paper) — ISBN 978-0-88099-468-2 (hardcover : alk. paper) — ISBN 0-88099-468-1 (hardcover : alk. paper) 1. Social security. 2. Pensions. 3. Pensions—Government policy. I. Szczepanski, Marek, 1959- II. Turner, John A. (John Andrew), 1949 July 9- HD7091.S5865 2014 331.25'22—dc23 2013043011 © 2014 W.E. Upjohn Institute for Employment Research 300 S. Westnedge Avenue Kalamazoo, Michigan 49007-4686 The facts presented in this study and the observations and viewpoints expressed are the sole responsibility of the authors. They do not necessarily represent positions of the W.E. Upjohn Institute for Employment Research. Cover design by Alcorn Publication Design. Index prepared by Diane Worden. Printed in the United States of America. Printed on recycled paper. In order to view this proof accurately, the Overprint Preview Option must be checked in Acrobat Professional or Adobe Reader. Please contact your Customer Service Rep- resentative if you have questions about finding the option. Job Name: -- /356308t Contents Preface vii Part 1: Overview 1 Social Security and Pension Reform: The Views of 16 Authors 3 Marek Szczepański and John A. Turner 2 Social Security and Pension Trends around the World 13 John A. Turner and David Rajnes Part 2: Reforms in Europe 3 Have Personal Retirement Savings Accounts Achieved Their 39 Objectives in Ireland? Gerard Hughes 4 Social Security and Pension Income in Sweden 63 Gabriella Sjögren Lindquist and Eskil Wadensjö 5 The Reform of Social Security Pensions in Portugal: 101 A Critical Assessment Maria Clara Murteira 6 The Norwegian Government Pension Fund as an Investor in 129 Global Markets Magdalena Mosionek-Schweda 7 Pension Reforms in Central and Eastern European Countries, 153 1998–2012 Maciej Żukowski 8 Pension Reform and the Measurement of Risk in Occupational 163 Pension Plans in Poland Marek Szczepański and Tomasz Brzęczek v In order to view this proof accurately, the Overprint Preview Option must be checked in Acrobat Professional or Adobe Reader. Please contact your Customer Service Rep- resentative if you have questions about finding the option. Job Name: -- /356308t Part 3: Reforms in Australia, Asia, Africa, and the Americas 9 Australian Pensions: An Equitable Solution in a 185 Postcrisis World? Ross Clare 10 Social Security Reform in China 217 Tianhong Chen and John A. Turner 11 Social Security and Pensions in East Africa 235 John A. Turner 12 The Efficiency of Defined Contribution Pension Plans in 269 the Americas Denise Gómez-Hernández and Alberto M. Ramírez de Jurado Frías Part 4: Reform Issues 13 Pension Fund Governance 287 Adam Samborski 14 Financial Literacy, Education, and Advice 299 John A. Turner and Dana M. Muir Authors 325 Index 327 About the Institute 345 vi In order to view this proof accurately, the Overprint Preview Option must be checked in Acrobat Professional or Adobe Reader. Please contact your Customer Service Rep- resentative if you have questions about finding the option. Job Name: -- /356308t Preface This book is based largely on the 2012 conference of the European Net- work for Research on Supplementary Pensions (ENRSP), held at Poznań University of Technology, Poznań, Poland, on September 13–14, 2012. The ENRSP is a research network for independent researchers in the field of private pensions. Marek Szczepański, chair of Economic Sciences at Poznań Univer- sity of Technology, organized the conference. It was the first conference of the network held in Eastern Europe. Financial support for the conference was provided by ENRSP and by the PZU Pension Society in Poland. Szczepański has edited a conference volume for that conference, which is published in English in Poland under the title Old-Age Crisis and Pension Re- form: Where Do We Stand? This volume differs from that in that it is oriented toward pension policy experts in the United States. It does not include all the papers from the conference, while it does include several papers not presented at the conference. The volume published in Poland has more of a focus on Central and Eastern Europe, while this volume, through the addition of several papers, has more of a global focus. In addition, all of the papers have been edited so that they use U.S. pension terminology. vii In order to view this proof accurately, the Overprint Preview Option must be checked in Acrobat Professional or Adobe Reader. Please contact your Customer Service Rep- resentative if you have questions about finding the option. Job Name: -- /356308t In order to view this proof accurately, the Overprint Preview Option must be checked in Acrobat Professional or Adobe Reader. Please contact your Customer Service Rep- resentative if you have questions about finding the option. Job Name: -- /356308t Part 1 Overview In order to view this proof accurately, the Overprint Preview Option must be checked in Acrobat Professional or Adobe Reader. Please contact your Customer Service Rep- resentative if you have questions about finding the option. Job Name: -- /356308t In order to view this proof accurately, the Overprint Preview Option must be checked in Acrobat Professional or Adobe Reader. Please contact your Customer Service Rep- resentative if you have questions about finding the option. Job Name: -- /356308t 1 Social Security and Pension Reform The Views of 16 Authors Marek Szczepański Poznań University of Technology John A. Turner Pension Policy Center Countries around the world are reforming their social security and pension systems. International studies often focus on social security re- forms in Europe and North America, and may include Latin America. Reforms, however, are also occurring in Asia and Africa, and include reforms of voluntary and employer-provided pensions as well as so- cial security programs. This book discusses both social security and employer-provided pension reforms, as well as reforms in most regions of the world. This chapter provides an overview of the book. Many of the chap- ters were originally presented at a conference of the European Network for Research on Supplementary Pensions (ENRSP) in Poznań, Poland, in 2012, that was organized by Marek Szczepański. Other chapters have been added to expand the range of countries covered. OVERVIEW Part 1 of the book contains this introduction and a chapter written by John A. Turner and David Rajnes that examines social security and pension reforms around the world. It includes a survey of some of the 3 In order to view this proof accurately, the Overprint Preview Option must be checked in Acrobat Professional or Adobe Reader. Please contact your Customer Service Rep- resentative if you have questions about finding the option. Job Name: -- /356308t 4 Szczepański and Turner main points of chapters of this book, but has a considerably broader fo- cus in terms of countries and issues. For example, an issue not touched on elsewhere is the trend in some countries toward adopting automatic adjustment mechanisms as a way of maintaining the solvency of their social security systems. In some countries, the level of social security benefits at retirement is automatically adjusted downward to reflect improvements over time in life expectancy. Turner and Rajnes’s chap- ter also discusses the policy that a number of countries have adopted, which is raising the earliest age at which social security benefits can be received, and other policies to encourage workers to postpone re- tirement, which are ways of dealing with the added costs to pension systems due to increased life expectancy. Turner and Rajnes discuss in Chapter 2 issues of concern in high- income countries, and also the problem that most workers around the world are not covered by social security or pension programs. Countries such as China and Kenya have developed innovative programs to at- tempt to deal with that issue. The programs in those two countries are discussed in greater depth in Chapters 10 and 11.