How Macroeconomic and Financial Fluctuations Affect Retirement: The Case of an Oil Producing Country

This paper analyzes the impact of macroeconomic and financial variables on retirement. Special attention is given to petroleum prices since this variable has not been taken into account in previous studies and is essential for those countries immersed in the trade of this natural resource. Not only unemployment rate but also stock market and petroleum prices are considered as explanatory variables in our model. The study considers the reactions of retirement by gender, age and level of education. We conclude that in the long term, there is an increase in the number of new pensioners when oil prices decrease

Improving the Equity, Transparency, and Solvency of Pay-as-You-Go Pension Systems: NDCs, the AB, and ABMs

The aim of this chapter is to show the advisability of introducing instruments for improving equity, transparency, and solvency into the pay-as-you-go (PAYG) pension system. is is in line with the trend seen in some countries of applying actuarial analysis methodology to the eld of public PAYG pension system management. With this aim in mind, we explain and analytically develop various aspects of notional de ned-contribution accounts (NDCs), the actuarial balance (AB), and automatic balance mechanisms (ABMs). e main conclusion reached is that these tools are not simply unrealistic theoretical concepts but a response to the growing social demand for transparency in the area of public nance management, the need to minimize the political risk faced by PAYG systems, the desire to set the pension system rmly on the road to long-term nancial solvency, and the wish to increase contributors’ and pensioners’ con dence in the system in the sense that promises of pension payments will be respected

Adequacy, Fairness and Sustainability of Pay as you go systems : Defined Benefit versus Defined Contribution

There are three main challenges facing pay-as-you-go public pension systems. First, pension systems need to provide an adequate income for pensioners in the retirement phase. Second, participants wish a fair level of benefits in relation to the contributions paid. Last but not least, the pension system needs to be financially sustainable in the long run. In this paper, we jointly analyse the adequacy, fairness and sustainability of both defined benefit and defined contribution schemes. Finally, risk sharing mechanisms, that involve changes in the key variables of the system, are designed to restore the financial sustainability while we study their consequences on the adequacy and fairness of the system

¿Puede el análisis actuarial (NDCS, BAS y MFAS) mejorar el sistema de pensiones de reparto?

El objetivo de este trabajo es mostrar la conveniencia de incorporar al sistemade pensiones de reparto, herramientas para mejorar su equidad, transparencia ysolvencia, lo que enlaza con la tendencia que se aprecia en algunos paísesavanzados de implantar metodología del análisis actuarial al campo de la gestiónpública. Con el fin de cumplir con el objetivo establecido, en el trabajose explican y se desarrollan analíticamente algunos aspectos de las cuentas nocionales de aportación definida (NDC), el balance actuarial (BA), y los mecanismos financieros de ajuste automático (MFA). La principal conclusiónalcanzada es que estas herramientas, no son meros conceptos teóricos alejadosde la realidad; más bien responden a la creciente demanda social de transparenciaen el ámbito de la gestión financiera pública, al deseo de empujar sostenidamenteThe purpose of this article is showing the convenience of incorporating tools intothe pension system in order to improve its equity, transparency and solvency which matches the tendency seen in some advanced countries aimed at using an actuarial methodology in the field of public management. In order to comply with the objective set out, this work explains and analyzes some aspects of notional defined contribution accounts (NDCs), actuarial balance (BA) and automatic adjustment financial mechanisms (MFAs). The main conclusion reached is that these tools are not mere theoretical concepts away from reality; they rather respond to the growing societal demand for transparency in the ambit of public finance management, to the desire of constantly pushing the system towards financial solvency at the long term and the aspiration of increasing the credibility of contributors and pension savers in the sense that promises of payment of pensions have reasonable expectations of being fulfilled. Likewise this work shows that the traditional methodological divergence between public finances and private finances has no sense and that the transplant of certain techniques of actuarial finances into management of public finances minimizes the political risk of the system when bringing the horizon of planning of politicians closer to the pension systems

¿Puede el análisis actuarial (NDCS, BAS y MFAS) mejorar el sistema de pensiones de reparto?

El objetivo de este trabajo es mostrar la conveniencia de incorporar al sistemade pensiones de reparto, herramientas para mejorar su equidad, transparencia ysolvencia, lo que enlaza con la tendencia que se aprecia en algunos paísesavanzados de implantar metodología del análisis actuarial al campo de la gestiónpública. Con el fin de cumplir con el objetivo establecido, en el trabajose explican y se desarrollan analíticamente algunos aspectos de las cuentas nocionales de aportación definida (NDC), el balance actuarial (BA), y los mecanismos financieros de ajuste automático (MFA). La principal conclusiónalcanzada es que estas herramientas, no son meros conceptos teóricos alejadosde la realidad; más bien responden a la creciente demanda social de transparenciaen el ámbito de la gestión financiera pública, al deseo de empujar sostenidamenteThe purpose of this article is showing the convenience of incorporating tools intothe pension system in order to improve its equity, transparency and solvency which matches the tendency seen in some advanced countries aimed at using an actuarial methodology in the field of public management. In order to comply with the objective set out, this work explains and analyzes some aspects of notional defined contribution accounts (NDCs), actuarial balance (BA) and automatic adjustment financial mechanisms (MFAs). The main conclusion reached is that these tools are not mere theoretical concepts away from reality; they rather respond to the growing societal demand for transparency in the ambit of public finance management, to the desire of constantly pushing the system towards financial solvency at the long term and the aspiration of increasing the credibility of contributors and pension savers in the sense that promises of payment of pensions have reasonable expectations of being fulfilled. Likewise this work shows that the traditional methodological divergence between public finances and private finances has no sense and that the transplant of certain techniques of actuarial finances into management of public finances minimizes the political risk of the system when bringing the horizon of planning of politicians closer to the pension systems