Friday, June 4, 2010

New papers from the Social Science Research Network


"Key Issues Regarding Japan's Public Pension Reform" Nomura Journal of Capital Markets, Vol. 1, No. 2, Summer 2009

AKIKO NOMURA, Nomura Institute of Capital Markets Research

Japan's public pension system underwent radical reforms in 2004, and the results of the first financial review under the new regime were released in February 2009. Although the review concluded that systemic revisions were unnecessary, some observers have criticized the report for its use of overly optimistic assumptions. In addition, there has been a rekindling of the debate over whether the basic pension should be funded by premiums or by taxes. If demographics and socio-economic conditions necessitate further reforms, it is essential that those reforms be started without delay.

"Pension Reform in the United States: Guaranteed Pension Accounts are Key" Rotman International Journal of Pension Management, Vol. 2, No. 2, Fall 2009

TERESA GHILARDUCCI, University of Notre Dame - Department of Economics, The New School - Department of Economics

Policy makers in the United States reacted swiftly to the recession by restructuring the nation's collapsing financial institutions, yet they ignored the failing pension system. President Obama is now proposing pension reforms that will likely exacerbate its current problems of asset volatility and inadequate income replacement. This article offers an alternative: Guaranteed Savings Accounts administered by the Social Security Administration. At the start, retirement savings accumulated in Defined Contribution plans could be swapped for Guaranteed Savings Accounts guaranteeing a minimum three percent real rate of return. Over time, Guaranteed Savings Accounts would grow through contributions from employers and employees. Tax expenditures related to current 401(k) pension contributions could be distributed more fairly. This would allow lower-income workers to build their Guaranteed Savings Accounts further through pension tax credits. Accumulating retirement savings would be co-mingled, and professionally managed at low-cost. On retirement, Guaranteed Savings Accounts would be converted into life annuities. Guaranteed Savings Accounts would eliminate four major problems besetting the current American Defined Contribution-based pension system: High asset volatility, high fees, and the hedging difficulties with longevity and inflation risks.

"Focus on... Pension Reform" Journal of Pension Benefits, Vol. 16, No. 4, p. 3, Summer 2009

DAVID A. PRATT, Albany Law School

The last issue of the Journal included an interesting article by Professor Theresa Ghilarducci, "If This Isn't the Time for a Guaranteed Retirement Account, When Is It?" (Journal of Pension Benefits, Vol. 16, No. 3, Spring 2009.) Professor Ghilarducci is one of the country's most interesting and thought-provoking pension scholars, and her ideas are set out in more detail in her recent book, When I'm Sixty-four: The Plot Against Pensions and the Plan to Save Them.

"Several Issues in Reform and Development of China's Old-Age Security System" China Economist, Forthcoming

YANZHONG WANG, Chinese Academy of Social Sciences (CASS)

Since China's reform and opening to the outside world, especially since the mid-1990s, China's social security system has undergone a number of reforms and adjustments. We can say that the basic framework of social insurance system had been established, but it is still facing many difficulties such as small coverage, high payment rates, "empty" individual accounts, etc. The question is whether China will choose the proper way from so many suggestions inside and outside China to solve the above issues. I will analyze some important issues on pension reform and old age security system construction and give my own view in this paper.

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