The collection of pension contributions: a comparative review of three Central European countries

This article presents a comparative review of systems of collection of pension contributions in three Central European countries. We discuss some basic requirements for successful contribution collection and show how these three countries fare in that regard. The changing role of the social security institutions is described. The broad trend toward integrated collection systems, with an enhanced role of the tax authority is clearly discerned, although with some country-specific features. Contribution compliance is analysed for the largest group of insured persons – employees, using the indicator: covered wage bill (as percentage of GDP). The value of this indicator has mostly been decreasing in the 2000s. This is not a satisfactory development and could contribute to the deteriorating financial sustainability of public pension systems

Retreat from mandatory pension funds in countries of the Eastern and Central Europe in result of financial and fiscal crisis: Causes, effects and recommendations for fiscal rules

The aim of this book is to assess in various dimensions the causes and effects of the reduction of mandatory pension funds in selected countries of Central-Eastern Europe and to propose changes to existing fiscal rules so that they could respond to the challenge of population ageing impact on public finances. We review the changes made in 2008-2011 in the multi-pillar pension systems CEE region: Hungary, Poland, Lithuania, Latvia, Estonia, Bulgaria, Slovakia and Romania. All of these countries in the course of late 1990s and early 2000s introduced multi-pillar pension systems that replaced traditional PAYG ones. All countries are also EU member states and are subject to the European policy with regards to the coordination of economic government including public finance situation. However, as analysis reveals they have different social and economic contexts, relevant from the pension systems’ perspective. We make a comprehensive assessment of consequences of limiting the role of funded pillar in societies’ pension security of selected countries of Central and Eastern Europe from macro perspective (public finance) and micro perspective (pension levels of individuals), also combining the two approaches. This helped to determine the costs and benefits of current developments in the short and long term for various stakeholders. The book comprises of seven chapters. The first chapter presents the design and changes in the multi-pillar pension systems in the CEE countries in the light of their public finance situation and broader socio-economic context. Chapter 2 analyses how the pension fund markets functioned due to the pension changes introduced recently by the governments. Chapter 3 makes an assessment of the short-term effects of reduction of pension funds sectors on the public finance situation and the public pension system in each of the analysed countries. Chapter 4 analyses the impact of changes in pension system on the level of pension wealth of individuals. Chapter 5 provides an assessment of the long-term impact of changes in funded systems for the stability of public finances and pension systems. Chapter 6 presents the recommendations on how to strike the balance between fiscal tensions and the need to maintain the role of pension funds in developing sustainable and adequate pensions in the future. The last chapter summarises the findings of the project with regards to the formulated hypotheses. The authors gratefully acknowledge the financing of this project by the National Science Centre, the decision number DEC-2012/05/B/HS4/04206

Notional defined contribution pension schemes: Why does only Sweden distribute the survivor dividend?

The aim of this paper is to analyse the role of the survivor dividend in notional defined contribution (NDC) pension schemes. At present, this feature can only be found in the Swedish defined contribution scheme. We develop a model that endorses the idea that the survivor dividend has a strong basis for enabling the NDC scheme to achieve financial equilibrium and that not including the dividend is a non-transparent way of compensating for increases in longevity and/or legacy costs from old pension systems. We also find that the average effect of the dividend remains unchanged for any constant annual rate of population growth, that contribu-tors who reach retirement age always get a higher return than the scheme does, and that population growth enables cohorts with more years of contributions to benefit to a greater extent from the dividend effect

Last lessons learned from the Swedish public pension system

Retirement systems across the world are undergoing major reforms to adapt to continuously changing economic and demographic factors. Among these major changes are the so-called notional defined contribution pension schemes (NDCs), first developed about 20 years ago in countries such as Italy, Latvia, Poland and Sweden. These pension schemes attempt to reproduce the logic of a financial defined contribution pension plan within a pay-as-you-go framework. Among the countries with NDCs, Sweden is the only one where an automatic balancing mechanism goes hand in hand with the prior calculation of a financial solvency indicator that emerges from an actuarial balance sheet. This chapter describes the Swedish pension experience over the 2007–2015 period through its accounting method, together with the problems faced by the system and the policy responses

Wpływ zmian wieku emerytalnego na podejmowanie decyzji o przejściu na emeryturę w Polsce po 1990 roku

The article presents an analysis of the retirement behaviour in Poland in the past 30 years within the context of evolution of the legal retirement age and access to early retirement benefits. It shows that any change in the law, particularly those that widen access to pensions, such as introducing early retirement opportunities or lowering the retirement age itself, lead to an increased take up of pension benefits. The majority of employees claim their pensions at the earliest age that they accrue pension rights, or no more than a couple of years afterwards. This behaviour has not changed over the course of the past 30 years, despite significant changes in a pension system that has moved from the defined benefit to the defined contribution principle, and which has increased the incentives to postpone retirement decisions. People above the age of 50 still want to retire as soon as possible. A shift towards a defined contribution system, combined with a lower retirement age, particularly for women, leads to a declining ratio between pensions and wages. Raising the retirement age and equalising it between sexes seems to be necessary to compensate for increasing live expectancy and to ensure the adequacy of pensions and for the reduction of the gender pension gap over the coming decades.Artykuł przedstawia analizę zachowań emerytalnych w Polsce w ciągu ostatnich 30 lat w kontekście ewolucji ustawowego wieku emerytalnego i dostępu do świadczeń z tytułu wcześniejszej emerytury. Tekst dowodzi, że wszelkie zmiany w prawie, zwłaszcza te, które rozszerzają dostęp do emerytur, takie jak wprowadzenie możliwości wcześniejszego przejścia na emeryturę lub obniżenie samego wieku emerytalnego, prowadzą do zwiększonego wykorzystania świadczeń emerytalnych. Większość pracowników występuje o emerytury jak najwcześniej, czyli w wieku, w którym nabywają uprawnienia emerytalne, ewentualnie najwyżej kilka lat później. Zachowanie to nie zmieniło się w ciągu ostatnich 30 lat pomimo istotnych zmian w systemie emerytalnym: z systemu zdefiniowanego świadczenia w system zdefiniowanej składki, motywując do odkładania decyzji emerytalnych. Osoby w wieku powyżej 50 lat nadal chcą jak najszybciej przejść na emeryturę. Przejście w kierunku systemu określonych składek w połączeniu z niższym wiekiem emerytalnym, szczególnie w przypadku kobiet, prowadzi do malejącej stopy zastąpienia między emeryturą a ostatnią płacą. Podnoszenie wieku emerytalnego i wyrównywanie go między płciami wydaje się konieczne, aby zrekompensować wzrost oczekiwanej długości życia, zapewnić adekwatność emerytur oraz zmniejszyć różnicę ich wysokości między kobietami a mężczyznami w nadchodzących dziesięcioleciach

Spatial Conditions Supporting Sustainable Development of Enterprises on Local Level

Micro, small and medium enterprises (MSMEs) represent more than 99% of enterprises in Europe. Therefore, knowledge about this sector, also in the spatial context is important to understand the patterns of economic and social development. The main goal of this article is an analysis of spatial conditions and the situation of MSMEs on a local level using combined sources of information. This includes data collected in the Social Insurance Institution and Tax registers in Poland, which provides information on the employment, wages, revenues and taxes paid by the MSMEs on a local level as well as contextual statistical information. The data is used for a diagnosis of spatial circumstances and discussion of conditions influencing the status of the MSMEs sector in a selected region (voivodeship) in Poland. Taxonomy methods including factor analysis and clustering methods based on k-means and SOM Kohonen were used for selecting significant information and grouping of the local units according to the situation of the MSMEs. There are eight factors revealed in principal component analysis and five clusters of local units distinguished using these factors. These include two clusters with a high share of rural local units and two clusters with a high share of rural-urban and urban local units. Additionally, there was an outstanding cluster with only two dominant urban local units. Factors show differences between clusters in the situation of MSMEs sector and infrastructure. Different spatial conditions in different regions influence the situation of MSMEs

Analysis of social and economic conditions of microenterprises based on taxonomy methods

The situation of microenterprises on the market is difficult as they are faced with barriers and competitiveness imposed by larger units. We used data from the REGIOGMINA project to assess the situation of microenterprises. The REGIOGMINA project was implemented by a consortium of Kujawsko–Pomorskie Voivodship, the SGH Warsaw School of Economics and the Nicolaus Copernicus University in Toruń in the scope of the GOSPOSTRATEG initiative. This data set was complemented by data provided by the Local Data Bank of Statistics Poland. The analysis describes the situation in Kujawsko-Pomorskie Voivodship. The information from both sources illustrates the situation of microenterprises at a local level (gmina) in the years 2019–2020. A cluster analysis based on taxonomy methods was performed. The aim of the research is to expand the knowledge and contribute to a better understanding of the social and economic problems that microenterprises are confronted with at a local level. The study covers the period before the COVID-19 pandemic and the first year following its outbreak, which makes it possible to assess the effects that the measures taken against the pandemic had on the situation of microenterprises at a local level