"The German Statutory Pension Scheme: Balance Sheet, Cross-Sectional Internal Rates of Return and Implicit Tax Rates"
FZG-Discussion Paper No.63, Research Center for Generational Contracts, University of Freiburg
We present a framework for accounting of the German statutory pension scheme and estimate a balance sheet for the years 2005 until 2012. Extending and applying the methodology proposed by Settergren and Mikula (2005), we estimate the cross-sectional internal rates of return of the German pension scheme over this period. We are able to show that the cross-sectional internal rate of return is mainly financed by increasing contributions and by changing the liabilities not backed by assets. Additionally, our results reveal that from an expenditure perspective, the major part of the internal rate of return is resulting from changing longevity rather than indexation of pension entitlements. Finally, we prove that from a cross-sectional perspective the implicit tax of a pension scheme can mainly be interpreted as an “implicit wealth tax” on pension wealth and subsequently present empirical estimates for these cross-sectional implicit tax rates.
"Employment at Older Ages and Social Security Benefit Claiming"
Social Security Bulletin. 76(4): 1-17
Eligible workers can claim Social Security retirement benefits at age 62, the earliest eligibility age; however, those who claim benefits before attaining full retirement age receive permanently reduced benefits. Working longer and claiming benefits later can result in higher Social Security benefits and greater financial security in retirement. This article presents data on trends in the labor force participation rate of older Americans and the age at which people claim Social Security retired-worker benefits.
"Poverty Status of Social Security Beneficiaries, by Type of Benefit"
Social Security Bulletin. 76(4): 19-50
BENJAMIN BRIDGES, U.S. Social Security Administration
ROBERT GESUMARIA, Government of the United States of America - Office of Research, Evaluation and Statistics
This article examines the 2012 poverty status of Social Security adult type of benefit (TOB) groups using both the official poverty measure and the Supplemental Poverty Measure (SPM). For each TOB group the article compares the SPM estimate with the official poverty measure estimate. In addition, it estimates the effects of various features of the SPM on poverty rates, noting why the SPM estimates differ from official estimates. For each poverty measure, the article also compares poverty estimates across groups.
"A Comparison of Free Online Tools for Individuals Deciding When to Claim Social Security Benefits"
Research and Statistics Note No. 2016-03
PATRICIA P. MARTIN, Government of the United States of America - Social Security Administration
DALE KINTZEL, Government of the United States of America - Social Security Administration
When to claim Social Security retirement benefits is one of the most important financial decisions many people make. The Social Security Administration (SSA) provides a variety of online tools and publications to help individuals decide on their own when to claim benefits, but maintains a neutral stance on when a person should claim. Because SSA remains neutral, other government, nonprofit, academic, and for-profit entities have developed tools to assist the public with their claiming decision. This note analyzes the advantages and limitations of six online benefit calculators. Users of these online tools should consider the source of their information and understand that the benefit estimates they produce are based on different underlying assumptions, which can result in different estimated benefit amounts.
"Social Assistance and Minimum Income Benefits: Benefit Levels, Replacement Rates and Policies Across 26 OECD Countries, 1990-2009"
Jinxian Wang and Olaf van Vliet (2016) Social assistance and minimum income benefits: Benefit levels, replacement rates and policies across 26 OECD countries, 1990-2009. European Journal of Social Security, Vol. 18, No. 4, pp. 333-355.
JINXIAN WANG, Leiden University - Department of Tax Law and Economics
OLAF VAN VLIET, Leiden University - Leiden Law School, Leiden University - Department of Economics
Until recently, social assistance and minimum income benefits have received relatively little attention in the comparative welfare state literature. Relying on two new indicators, this paper examines the development of minimum income benefits across 26 EU and other OECD countries. The real benefit level, the first indicator, is relatively easy to interpret, but international comparisons require adjustments for exchange rates and purchasing power, which can introduce variation that is not related to underlying policy changes. In the second indicator, the net minimum income replacement rate, this disadvantage is cancelled out by construction. Our analysis shows that real benefit levels increased in most countries, whilst replacement rates declined on average. A subsequent qualitative analysis of the changes in the benefit levels confirms that the increased benefit levels reflect policy changes and that the lower replacement rates do not reflect benefit cuts, but relatively larger wage increases. Such a widening gap between benefit levels and wages is in line with the policy agenda of ‘making work pay’. Finally, by analysing the extent to which changes in quantitative indicators reflect actual policy changes, this paper seeks to make a methodological contribution to the ongoing debate on the ‘dependent variable problem’ in the welfare state literature.