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  #461  
Old 11-11-2019, 10:25 AM
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POLAND
https://www.ai-cio.com/news/poland-a...ension-system/
Quote:
Poland Approves Plans to Overhaul Pension System
The funds will be used to boost revenues.
Spoiler:
Poland is moving its state-guaranteed private pension benefits to IRA-like accounts. The shift is designed to trim the Polish government’s liabilities and save $5 billion thanks to reduced retirement outlays.

The government-backed private system, called OFE, is valued at about $43 billion. Private pension funds are owned and run by firms like MetLife, NN Group, and Aviva. The government is transferring assets to fill a budget gap and minimize uncertainty. Poles’ private pension money will be moved to the IRAs at a 15% fee, unless they ask to put it with the state insurer.

OFE manages almost 80% of the assets, which are shares in companies on the Warsaw Stock Exchange. In the 1990s, Poland created privately managed pension funds with partial contributions to the state pension system. Currently, the insurance institution collects a majority of mandatory contributions from employees, which is 19.5% of pre-tax earnings. A smaller amount is set aside for OFE.

Premier Mateusz Morawiecki was in a months-long battle with Finance Minister Teresa Czerwinska over the $11 billion fiscal stimulus program. Czerwinska, who was forced to step down in September, warned that the package could lead to a higher deficit. One of Morawiecki’s campaign promises was to dole out more money to pensioners.

In 2014, the government used public bonds, which amounted to half of the pension system’s assets, to lower its debt. What remained were funds that were heavily invested in riskier equities.


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Old 11-14-2019, 10:04 PM
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BRAZIL

https://apnews.com/0c60f2b8ecb648e1a...e82042#new_tab

Quote:
Brazil Congress passes landmark overhaul of pension system

Spoiler:
SAO PAULO (AP) — The Senate gave final congressional approval Tuesday to an overhaul of Brazil’s pension system, capping years of stalled efforts to sway public opinion and rein in unsustainable government spending on retirement.

The Senate voted 60-19 to adopt changes for civil servants and private-sector workers, handing President Jair Bolsonaro his first major legislative victory. He proposed the constitutional amendment in February and, after some watering down, Congress’ lower house gave its approval in August.

The most meaningful change sets a minimum retirement age of 65 for men and 62 for women. That’s up from averages of 56 and 53, according to the Organization for Economic Co-operation and Development, a club of nations whose populations on average retire at about 66.

The overhaul also introduces progressive brackets for contribution amounts as well as limits for survivor benefits and includes a period for transition to the new system.

The intent is to curb a swelling deficit in Brazil’s “extremely generous” pension system, which accounts for some 40% of total federal spending, according to a note Tuesday from the research firm Capital Economics.

That load has grown along with life expectancy, and increasingly limits the government’s ability to direct funds toward other areas. Brazil will save about $190 billion over the next decade as a result of the overhaul, said Monica de Bolle, senior fellow at the Peterson Institute for International Economics.

“It’s good enough to put Brazil on a more sound fiscal path going forward into the medium term, and does address immediate population aging problems and so on,” De Bolle said in a phone interview.

The reform means Daniel Arag„o, a 38-year-old who works in human resources for the federal government in Rio de Janeiro, will have to labor an extra five years before he can retire. He accepts that sacrifice, despite what he perceives as some of the overhaul’s shortcomings.

“I can understand that reform is needed, or else the system will soon collapse,” Arag„o said.

Such awareness has been constructed over the course of years and reflects a shift in public opinion. Of people surveyed in July by pollster Datafolha, 47% supported the proposal. A reform submitted by Bolsonaro’s predecessor, Michel Temer, was less ambitious but got significantly less support. President Luiz Inacio Lula da Silva achieved only a partial reform after President Fernando Henrique Cardoso failed to make any changes.

The initial proposal of Bolsonaro’s far-right administration was more aggressive and aimed at saving more than $300 billion over 10 years. Congress removed some items, including a reduction of small benefits for elderly and disabled people with low incomes.

On the central artery of Sao Paulo, Brazil’s biggest city, 48-year-old Anibal Soares said he paid less attention to debate of the plan than he should have.

“I heard that after this reform I’ll have to work six more years to get the same pension. Six more years paying social security, for what?” said Soares, a salesman of farm products. “I’m not saying there shouldn’t be a reform, but I have the feeling it will be people like me paying for it.”

The Senate scheduled a debate on final amendments to the main text of the reform for Wednesday.

Tuesday’s vote was a win for Bolsonaro after several defeats in Congress. His administration reportedly plans to submit a follow-up proposal with more controversial changes to the pension system and will include states and municipalities. The lower house is evaluating a separate bill that would modify pensions of the military and police.

Several senators who voted for the overhaul said more will be needed.

“In a few years we will be debating another reform because this one was not enough. Whoever is the next president, he or she will have to deal with this debate,” said Sen. Alvaro Dias of the center-right Podemos party.


https://kfgo.com/news/articles/2019/...ction=business
Quote:
Brazil's Bolsonaro heralds 'great day' as Senate approves pension reform

Spoiler:
BRASILIA (Reuters) - Brazil's President Jair Bolsonaro on Tuesday hailed the Senate's approval of a sweeping overhaul of the nation's pension system as a launch pad for the wider economy, although voting on the last few remaining amendments was delayed to the following day.

Pension reform is seen by the government and many economists as crucial to stabilizing Brazil's public finances and restoring business confidence, conditions they say will lead to stronger and more sustainable growth in Latin America's largest economy.

The Senate approved the main text of the landmark reform by a margin of 60-19 late on Tuesday before Senate President Davi Alcolumbre suspended debate on amendments and convened a session to conclude the voting on Wednesday.

The voting is expected to approve the last four amendments and once it is concluded, Bolsonaro will sign his keystone economic proposal into law.

"Congratulations Brazilian people! This victory, which paves the way for our country to finally take off, is yours! Brazil is ours! GREAT DAY!" Bolsonaro tweeted on Tuesday from Asia, where he is making a series of official visits.

Speaking to reporters in Brasilia, Economy Minister Paulo Guedes said Congress had done "a beautiful job" and that he was "very happy with the result".

Pension reform has dogged successive governments over the past three decades and been at the center of congressional debate for three years running, while the social security deficit has steadily risen.

The bill passed by the Senate aims to save the Treasury around 800 billion reais ($195 billion) over the next decade via measures that include raising the minimum retirement age and increasing workers' pension contributions.

Brazilian markets rallied and stocks hit an all-time high on the legislative result. Economists have said the controversial cuts to social security spending are crucial to closing a fiscal deficit that cost Brazil its investment-grade credit rating.

"The (stock) market rallied a lot today, in part because of this passage," said Tony Volpon, chief economist for Brazil at UBS. "It looks like local investors who have been buying the market in the face of foreign selling are beginning to win the argument."

Brazil's benchmark Bovespa stock index <.BVSP> rose 1.1% to close at 107,197 points, breaking above 107,000 points for the first. The real rose more than 1%, touching 4.06 per dollar for the first time in more than two weeks.

The reform's passage through the lower house of Congress in July, sending it to the Senate, helped give the central bank the cover it needed to cut interest rates. Failure to pass pension reform would lead to higher risk premia in local markets, the central bank repeatedly warned this year.

Brazil's public finances are extremely stretched due in part to hefty social security outlays, but also because tax revenues have fallen far short of expectations due to weak growth.

The economy is on track to grow by less than 1.0% this year, lower than the previous two years and well below the 2% or more most economists and the government expected at the start of the year.

The government's original pension reform bill envisaged savings of 1.237 trillion reais over the next decade. That was diluted to just over 900 billion reais in the lower house, then down to around 800 billion reais in the first round of voting in the Senate.

($1 = 4.07 reais)


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  #463  
Old 11-15-2019, 07:25 AM
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https://finance-commerce.com/2019/11...oms-worldwide/

Quote:
Severe $15.8 trillion pension crisis looms worldwide

Spoiler:
The U.S., China and other leading economies confront a massive funding gap of $15.8 trillion in 2050 to ensure lifetime financial support for their aging populations.

That’s according to a report spearheaded by former U.K. Financial Services Authority Chairman Adair Turner for the prestigious Group of 30, comprised of current and former policy makers.

“If public policies and individual behaviors do not change, many countries’ pension systems will face a severe crisis, threatening either unaffordable public expenditure pressures or inadequate incomes for retirees,” Turner said in a statement.

The projected $15.8 trillion shortfall is adjusted for inflation so the actual nominal dollar amount in 2050 will be materially larger, equivalent to 23% of global gross domestic product that year, according to the 75-page report.

The G-30, which includes Bank of England Governor Mark Carney and former U.S. Treasury Secretaries Timothy Geithner and Lawrence Summers, mainly blamed antiquated pension and retirement systems for the yawning financing gap, which it pegged at $1.2 trillion in 2018. Smaller projected returns on savings — in an era of low interest rates — aggravate the problem.

The report – which covers 21 countries, including Japan, Germany, India and Mexico, accounting for 90% of global GDP – said the coming crisis is not just about pensions. Lifetime financial security also depends on the availability of public health, housing and transportation services, as well as on informal community and family support.

The G-30 advocated a mixture of policies to tackle the problem:

Increasing the official retirement age by at least four-to-six years by 2050 while enabling people to work longer. A quarter of the funding gap could be closed if retirees on average worked 20% of the time of standard-aged workers.
Promoting higher savings by individuals and increasing taxes to support public pensions. Such steps might include mandatory savings programs.
Accepting that expected incomes in retirement may need to be lower. For middle and high-income retirees, that might mean living on 60% of average pre-retirement incomes, rather than 75%.
The report’s working group, which included UBS Group AG Chairman Axel Weber and BlackRock Vice Chairman Philipp Hildebrand, also called for action to reduce the administration and asset management costs borne by people saving for retirement. That might include establishing national utilities to provide bulk processing and purchasing of asset management services.

Reforms to minimize investment management costs must be a priority, according to the report.

The G-30 said that while the shift by corporations away from defined benefit to defined contribution retirement plans like 401(k)s for their workers had in some ways been inevitable, it has not worked out well for many individuals. The group suggested hybrid retirement programs as a possible solution, including guaranteeing minimum investment returns for defined contributions.

“Reforms to defined contribution should enable individuals to benefit from collective investment management, at low cost, and not have their retirement savings hostage to market cycles as much as they are today,” G-30 Chairman and Singapore senior minister Tharman Shanmugaratnam said in a statement.

The report acknowledges that confronting the coming crisis will be difficult because it will involve potentially politically unpopular decisions.

Making it “even more arduous is that it occurs at a time when governmental institutions are increasingly mistrusted, mainstream political parties are under strain,” and voters are becoming more diverse as well as “susceptible to populist rhetoric and demagoguery,” the G-30 said.


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  #464  
Old 11-15-2019, 07:26 AM
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GREECE

https://www.reuters.com/article/us-g...KBN1XO23G?il=0

Quote:
Exclusive: Greece plans to sell off pension arrears to get cash upfront

Spoiler:
ATHENS (Reuters) - Greece plans to sell billions of euros of social security contributions owed to its pension fund to private investors to get cash upfront and facilitate recovering other receivables, senior government officials told Reuters on Thursday.

The country’s conservative government, which took over in July, is keen to boost investment inflows and fix major issues affecting economic recovery prospects, including bad loans plaguing the banking sector.

It is also looking at ways to repair the social security system’s overall balance sheet to strengthen its viability.

“There is a strategy to sell arrears the state social security system has not managed to recover in past years,” one of the government officials said.

The arrears represent social security payments for staff owed to pension funds by private companies in Greece, partly because of the country’s debt crisis.

The project, headed by Deputy Labour and Social Affairs Minister Notis Mitarachi, will look into selling a first batch of up to 12 billion euros ($13.22 billion) of legacy arrears out of about 35 billion on the social security system’s books.

The process will not involve securitization because issuing asset-backed securities may be treated as borrowing and face obstacles with Eurostat, the European Union’s statistics service that harmonizes statistical methods across its member states, one of the officials said.

Instead, the government will look into selling the arrears to private investors for a cash down payment and agree a profit sharing scheme from any recoveries. Selling such arrears will be done at discounts to the nominal value.

Potential buyers will need to use a servicer as do specialist funds which buy non-performing loans from banks.

The project will set Dec. 31, 2014 as a cut-off, meaning it will try to sell off arrears accumulated up to that date. It will focus on amounts owed above 100,000 euros. It will not include arrears which already have a repayments plan or arrears of the self-employed.

“It will be a way to get quick upfront cash and improve our ability to focus on collecting more recent arrears, relieving the current administrative weight,” the senior official said.

Later on Thursday, Labour Minister Yannis Vroutsis issued a statement denying that there was a plan to sell arrears worth 12 billion euros. The government officials, who spoke to Reuters, stood by their comments.

They said the state aims to fine-tune the process by the end of this year and proceed with preparatory work in the first quarter of next year so that sales can take place in the second quarter of 2020.

The government is also looking for an adviser for the project.


This looks like a pension obligation bond.... for their social security system.

This sounds like an incredibly bad idea.
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  #465  
Old 11-15-2019, 02:26 PM
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GREECE

https://www.reuters.com/article/us-g...KBN1XO23G?il=0



This looks like a pension obligation bond.... for their social security system.

This sounds like an incredibly bad idea.
I'm not sure. It sounds like they are selling bad debt. The private companies owe $x to the Greek SS. The govt promises a part of $x to the investor, to be paid if it is recovered. The investor wins if the PV of their % of recovered $x is higher than what they paid. The govt wins if $x was going to be $0 anyway.
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  #466  
Old 11-15-2019, 02:36 PM
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Originally Posted by Steve Grondin View Post
I'm not sure. It sounds like they are selling bad debt. The private companies owe $x to the Greek SS. The govt promises a part of $x to the investor, to be paid if it is recovered. The investor wins if the PV of their % of recovered $x is higher than what they paid. The govt wins if $x was going to be $0 anyway.
Okay, it wasn't clear to me what exactly they were trying to do.
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Old 11-25-2019, 03:11 PM
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AUSTRALIA
ESG
DIVESTMENT

https://www.ai-cio.com/news/millenni...-change-risks/
Quote:
Millennial Sues Australian Pension Fund over Climate Change Risks
24-year-old says fund broke the law by not providing information about climate change risks.
Spoiler:
A 24-year-old Australian pension fund member is suing his pension for allegedly violating the country’s Corporations Act by failing to provide information related to business risks associated with climate change, as well as any plans to address those risks.

Mark McVeigh filed a lawsuit in the Federal Court of Australia against the A$57 billion ($38.9 billion) Retail Employees Superannuation Trust (REST), to which he has contributed 9.5% of his salary since 2013. Under the Corporations Act 2001, super fund beneficiaries are entitled to request information they need so they can make informed decisions about the management and financial condition of the fund.

“Climate change, the physical impacts, and the transition impacts, individually or in any combination, have posed, and will increasingly continue to pose, material or major risks to the financial position of many of REST’s investments,” said the lawsuit. “Trustee directors knew, or ought to have known, that REST’s climate change business risks were likely to have a material or major impact on the financial condition of [the fund].”

According to court documents, McVeigh requested information from REST concerning its business risks regarding the potential financial impact on its investments of these changes. In particular, he wanted to know what REST knew of its climate change business risks, and what actions it was taking in response to those business risks, among other requests.

However, he said the fund failed to provide the information he was seeking, and therefore violated the Corporations Act. It was then that he turned to Australian specialist climate change law firm Equity Generation Lawyers.

“I see climate change as a huge risk that dwarfs a lot of other things,” McVeigh said in an interview with Bloomberg. “It’s such a big physical impact on the planet, and the economy.”

REST has a climate change position statement that states that it factors in climate change risks into its investment strategy, and decision-making, including asset allocation and strategy reviews, and in its selection and review of investment managers.

“Climate change will impact the global economy in the short, medium and long term,” REST says in its climate change position statement. “The ongoing transition to a lower-carbon economy drives us to continually manage risks to deliver strong investment performance over time.”

The relief sought by McVeigh includes an injunction to force REST to give him the information he had requested in full, and a declaration that REST violated the Corporations Act by not providing the information he requested.


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Old 11-29-2019, 10:39 AM
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NORWAY
DIVESTMENT

https://www.ai-cio.com/news/norway-p...ampaignId=7109

Quote:
Norway Pension to Exclude UK Security Firm G4S
Fund says firm is risky due to ‘systematic human rights violations.’
Spoiler:
Norges Bank, the central bank of Norway, has decided to exclude UK security services company G4S from its $1.11 trillion Government Pension Fund Global because of the “unacceptable risk that the company contributes to or is responsible for serious systematic human rights violations.”

The bank’s executive board made the exclusion decision based on a recommendation from the central bank’s Council on Ethics. It also said that before excluding a company, it first considers whether the use of other measures, such as exercising ownership rights, may be better suited. With G4S, however, the board said it concluded that no other measures were appropriate.

G4S provides security services in more than 90 countries but the Council on Ethics focused on the company’s operations in Qatar and the United Arab Emirates, where its employees are mostly migrant workers.

The Council on Ethics said its investigations of GS4 found that employees were required to pay recruitment fees to work for the company. Workers have taken out loans in their home country to pay the fees. It said that when the GS4 workers arrive in Qatar and the United Arab Emirates they must spend a significant part of their salary to pay off this debt, and have little chance of leaving.

Many workers also have received far lower wages than they were promised. In the United Arab Emirates the workers even had their passports confiscated. The Council also uncovered that GS4’s employees in the region worked long days but did not receive overtime payments and were also subject to harassment.

“These regulations, along with the use of recruitment fees and misleading information about working conditions, have been condemned internationally as making migrant workers vulnerable to exploitation,” said the Council in its recommendation to exclude G4S. “G4S therefore operates within a regulatory framework that limits workers’ freedom of action.”

The Council said that G4S has acknowledged that the risk of human rights abuses is high in Qatar and the United Arab Emirates. The company said it has implemented measures to improve the situation, such as setting a cap on recruitment fees in the Emirates.

“Nevertheless, the company has given no indications that it will stop the charging of recruitment fees,” said the Council. “Nor has the company pointed to any measures to prevent misleading information being given about wages and working conditions. Furthermore, it does not allow its workers in Qatar to change employer.”

The move follows a real estate acquisition more than 8,000 miles away. On Monday, the bank said in a statement that Norway’s sovereign wealth fund and property investment group Prologis have agreed to jointly buy a $1.99 billion logistics real estate portfolio. The portfolio includes 127 US properties in Southern California, San Francisco, Seattle, and Dallas.

The bank paid $896 million for a 45% stake in the portfolio, while Prologis owns 55% and will run the properties. The bank manages the country’s $1.1 trillion sovereign wealth fund.

The new real estate portfolio includes the logistics centers and office buildings in New York, Tokyo, London, and Paris. The acquisition is part of Prologis’ merger agreement to acquire Industrial Property Trust.


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Old 12-02-2019, 06:40 PM
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UNITED KINGDOM

https://www.forbes.com/sites/ebauer/...s#734e6ee75a3a

Quote:
The UK Election, Waspi, And Why Social Security Reform Is So Dang Hard

Spoiler:
In 1983, facing the pending depletion of the Social Security Trust Fund, Congress boosted the age at which future recipients would be eligible for full Social Security benefits. Those aged 45 at the time would see a two-month increase, to 65 years and 2 months, and each subsequent year of birth resulted in an additional 2 month increase. Those aged 29 to 40 would see a full year increase. Then, in two-month increments, the full retirement age increased again so that the youngest workers, who had barely even entered the workforce, at age 23 at the time of enactment, would be faced with the full increase to age 67.

In other words, Congress’s approach to increasing the retirement age was about as gradual as you can get.

As it happens, the UK has also increased their retirement age. The particulars of it make for a somewhat long story, so please bear with me, but in the end it is a bit of an illustration of just how difficult these reforms are.

The story starts with the 1940 Old Age and Widows Pensions Act. (See “The Pensions Bill: Social Security Aspects,” a House of Commons research paper from 1995, for more details than you can shake a stick at.) Up to this point, the Old Age Pension (the UK’s equivalent of Social Security) had been paid beginning at age 65 for both men and women, since the inception of the program in 1925. But in 1940, the age for women was reduced from age 65 to age 60, with three rationales: first, this would be cheaper than a broad enhancement; second, the “second shift” of household responsibilities left women more “tired” than men; and third, due to the age disparity between typical spouses, a younger retirement age would enable women to qualify for pensions at the same time as their husbands.

Today In: Money
(It’s not unusual for a state pension system to have these differentiated ages; regular readers will recall that back in 2018, an Argentine man declared himself to be female in order to retire earlier, and in the United States, women on average retire younger than men, even though they face reduced benefits.)

In addition to more general pressure to reduce this generous and unequal benefit, the UK faced mid-80s European Union directives mandating equal treatment between men and women. Although there were exceptions carving out different treatment in state pensions (and, in fact, in the research paper, a table of pension ages shows that differentiated ages were very common), “The exception for the difference in pensionable age was considered to be a temporary, in order to enable States to adapt their pension system progressively without disrupting their complex financial equilibrium,” and in the early 90s, the government set about to find a solution, which produced the 1995 legislation, in which

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Women age 45 and older at the time of enactment saw no change;
Women age 44 saw an increase in state pension eligibility to age 61;
Women age 43 saw an increase to age 62;
Women age 42, to age 63;
Women age 41, to age 64; and
Women age 40 and younger, to age 65.
But, at the same time, the UK was facing the same cost pressures in its Social Security system as in the US, and in contrast to the US, they have no “trust fund,” either real or notional, and thus, no artificial timeline far in the future. And as a result, in 2007, they increased the state pension age (full retirement age) from 65 up to 68, with a gradual phase-in, for both men and women. For those age 40 to 47 or younger at the time of enactment, the retirement age increased to age 66 (with a phase-in for those age 48). For those age 30 - 38 or younger in 2007, the age increased to 67 (with a phase-in for those age 39). And for those age 29 or younger, the age increased to 68 (with a phase-in for 30-year-olds).

And, finally, in 2011, these phase-in ages were accelerated, for both men and women.

Women born in 1953, who were 42 at the date of the original 1995 law and were slated to receive their benefits at age 63, were now, at the age of 54, told they’d need to work until age 65.

Women born in 1954, age 41 in 1995 and slated for age 64 retirement, had their retirement age increased to age 66, with enactment when they were 53. At the same time, age-53 men, who were expecting that only those 6 years younger would be affected by the retirement age boost, were shifted to an age 66 retirement.

(Thanks to RightsInfo.org for the direct links to the legislation.)

Were these changes fair?

The group Women Against State Pension Inequality says no. (Whether it’s reasonable for them to say they’re fighting “inequality” when they’re really fighting a benefits-equalizing law, is another story.) They claim that women were not notified of these changes, or were given insufficient notice, and that, in some cases, women accepted early retirement offers with their employers without knowing they’d be unable to retire at age 60 as anticipated. They object that plans to retire alongside their husbands have been upended, and that women who have left their jobs intentionally or are involuntarily unemployed are obliged to deplete their savings or “are enduring humiliating tests/competitions” to qualify for unemployment benefits. And they complain that “The job market isn’t ready to accept older women – many women are forced to accept zero hours, temporary and low paid contracts, which offer no financial security.”

Are these complaints reasonable? To an American eye, where the notion of extra-early retirement benefits for women seems alien, it all sounds a lot like whining, but they do make the case that the oldest women at the time of the change, those born in the 1950s, came of age when women were still expected to be housewives and were thus particularly disadvantaged by this shift.

But what does this have to do with the upcoming election in the UK?

The Labor Party has made a campaign promise to the Waspi group:

“Under a Labour government, women born between 6 April 1950 and 5 April 1955 would be paid £100 for each week of entitlement lost.

“Those born between 6 April 1955 and 6 April 1960 would receive smaller amounts.

“Labour's Angela Rayner told BBC News: "The government failed the women who were born in the 1950s. They stole their pension."

“The maximum compensation would be £31,300, with an average payment of £15,380.”

Boris Johnson’s Conservatives have made no such promise. The Guardian quotes Johnson:

“We have looked at it and looked at it and I would love to magic you a solution but it is very expensive to come up with the solution that you want.”

And Norma Cohen, writing at Prospect, calls the Labour promise “an unaffordable giveaway to a group that does not need it” because retirees, in general, are not in particularly dire financial straits. She cites surveys showing that 75% of affected women knew about the increases, and quotes a pensions expert:

“John Ralfe, an independent pensions consultant who has long been critical of Waspi and BT60 demands for compensation—and of the Labour Party’s previously vague support for it—describes the new package unveiled last week as “regressive.” That is, too much goes to those who clearly do not need it. The one group deserving of a roll back are those affected by 2011 legislation which gave a very short period of notice for a one year rise in SPA, going to both men and women, he said. Labour, however, is not proposing to compensate men for the sudden rise, a move Ralfe speculates could give rise to legal claims of gender discrimination by men.

“How, then, should Labour’s new pension policy be interpreted? It offers cash to those who demonstrate no clear need of it and who are, in most cases, capable of earning it on their own. One way to look at this promise is that it is in line with the habitual posturing that comes before a national election, in which political parties promise generous goody-bags to groups whose support they seek regardless of whether it is good or affordable policymaking. In a difficult election year, it is difficult to come up with a more coherent explanation.”

All of which is an illustration of the fact that Social Security reform is not easy — and that’s all the more true when there’s no groundswell for belt-tightening but politicians make vote-getting promises to spend more money, and that’s true every bit as much in the US as in the UK.




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Old 12-02-2019, 06:47 PM
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FRANCE

https://www.reuters.com/article/us-f...-idUSKBN1Y121S
Quote:
France will soften, not give up pension reform ahead of strikes

Spoiler:
PARIS (Reuters) - The French government is willing to compromise on its pension reform but will not abandon plans to rebuild a system that allows some workers to retire in their fifties, it said on Wednesday, a week before a planned transport workers’ strike.

French Prime Minister Edouard Philippe attends a news conference after the weekly cabinet meeting at the Elysee presidential palace in Paris, France November 27, 2019. Alain Jocard/Pool via REUTERS
President Emmanuel Macron was elected in May 2017 on a pledge to overhaul the generous social security system and has promised to introduce a points-based pensions system under which all workers will have the same rights.

But as his centrist government is working on a first draft of the pension reform, unions at state-owned rail and metro operators - where some workers can retire in their early fifties - plan a nationwide transport strike on Dec. 5.

“The government is determined to build a universal pension system ... but we will take the time we need to get there,” Prime Minister Edouard Philippe told a news conference.

He said he favours a compromise between “an immediate and brutal transition” that would make the reforms applicable to people born after 1963, and a “grandfathering” clause that would impact only people entering the labour market from 2025.

France’s official retirement age is 62, but it has more than 40 different pension systems, with some allowing workers to retire in their mid- to late fifties or even their early fifties for Paris subway conductors.

Philippe said workers will be able to hang on to “acquired rights” but said the government is determined to end special pension regimes.

“The system of corporatist solidarity is no longer suitable for this day and age and has created injustices,” he said.

Leftist opposition parties and the more radical unions reject the pension reform plan, but the moderate CFDT union agrees with the principle of a points-based pension.

Next week’s transport strike will be a key test of the unions’ determination and of Macron’s ability to continue reforms in the second half of his five-year mandate. Civil servants and energy sector workers will join the protest.

In the first year of his term, Macron made labour law more flexible and in June 2018 his government ended the special benefits for new workers joining the SNCF state railway.

But the eruption late last year of often-violent “yellow vest” protests against the high cost of living crimped Macron’s reform drive and several planned measures have been shelved.

The government will reveal a draft of the pension reform around Dec. 9 or 10 and parliament will vote on it early 2020.


https://kfgo.com/news/articles/2019/...nsions/962187/
Quote:
Explainer: What's at stake in Macron's reform of France's cherished pensions?

Spoiler:
PARIS (Reuters) - France is bracing for nationwide public sector strikes on Dec. 5 against President Emmanuel Macron's drive to overhaul the country's unwieldy and costly pension system.

Here's what's at stake:

WHAT DOES MACRON'S PENSION REFORM AIM TO DO?

Macron wants to set up a single points-based pension system in which each day worked earns points for a worker's future pension benefits.

That would mark a big break from the existing set-up with 42 different sector-specific pension schemes, each with different levels of contributions and benefits.

Currently pension benefits are based on a worker's 25 highest earning years in the private sector and the last six months in the public sector.

The president says that a points-based system would be fairer and simpler. It would also put pension funding on a sounder footing as the population ages.

At 14% of economic output, French spending on public pensions is among the highest in the world. An independent pension committee forecast the system would run a deficit of more than 17 billion euros, 0.7% of GDP, by 2025 if nothing is done.

WHAT ABOUT THE RETIREMENT AGE?

Polls show the French are deeply attached to keeping the official retirement age at 62, which is among the lowest in OECD countries. Public workers who do arduous or dangerous jobs, such as mariners, can leave years earlier.

Macron says the French are going to have to work longer, but is shying away from simply raising the retirement age.

One idea is to keep the 62-year limit, but rein in benefits for those who leave the labor force before 64 and give a benefits boost to those who leave afterwards.

However, the president has indicated he would prefer to focus on the duration of a worker's career rather than the age at which they stop working.

WHAT IS THE UNIONS' PROBLEM WITH THE REFORM?

Public sector unions fret their workers will come out worse because under the current system the state makes up for the chronic shortfall between contributions and payouts in the sector.

Unions also worry they will lose their say on contributions and benefits under a centrally managed points-based system.

They are eager to show they are still relevant after Macron pushed through an easing of the labor code and reform of the state-run SNCF rail operator despite their opposition earlier in his presidency.

IS THERE ROOM FOR COMPROMISE?

Prime Minister Edouard Philippe has indicated concessions could be made on when the reform takes effect.

He said he favors a compromise between "an immediate and brutal transition" that would make the reforms applicable to people born after 1963, and a "grandfathering" clause that would impact only people entering the labor market from 2025.

But Philippe says the government will not back down on creating a points-based system - one of Macron's core election promises.

France's biggest union, the reform-minded, moderate CFDT, is open to the idea of a points-based system. The hardline CGT and Force Ouvriere unions, which unlike the CFDT are strongest in the public sector, reject the reform outright and are digging in for a long, hard fight.


https://www.reuters.com/article/us-f...-idUSKBN1Y31I5

Quote:
French mariners fear watery grave for 17th century pension perks

Spoiler:
Tugboat captain Jean-Yves Lagarde should be only 10 years from retiring thanks to special benefits for mariners that date back to the 17th century. But President Emmanuel Macron’s ambition to simplify France’s Byzantine pension system may scuttle his plan.

Tugboats are seen at the commercial harbour of La Rochelle, France, November 27, 2019. Picture taken November 27, 2019. REUTERS/Regis Duvignau
The weather-beaten 45-year-old spent a decade traversing the world’s oceans on cargo ships, encountering pirates in Asia and working in stifling temperatures below deck before returning to the port town of La Rochelle to do battle with Atlantic storms.

A career toiling in punishing conditions merits the early retirement accorded to mariners, Lagarde said. Angry he could lose the perk, Lagarde will join a nationwide strike on Dec. 5 called by public sector unions to force Macron to back down.

“After all, we have a pension plan that has stood the test of time for four centuries,” Lagarde said, steering his tug towards a choppy sea.

The showdown against unions will set the tone for the second half of Macron’s mandate, with more reforms including an overhaul of unemployment benefits lined up, and comes as discontent swirls in hospitals, the police force and in schools.

Sailors are covered by France’s earliest pension regime, drawn up in 1673 during the rule of Louis XIV to look after seamen disabled at sea.

They are entitled to retire on a full pension aged 52.5 - nearly a decade earlier than the typical worker - if they have worked for 37.5 years.

It is one of a dozen ‘special regimes’ with different retirement ages and benefits that cover among others rail workers, dancers at the Paris Opera and comedians. In all, the pension system comprises more than 40 different plans.

Macron says the system is unfair. He wants a single, points-based system under which for each euro contributed, every pensioner has equal rights.

NATIONWIDE STRIKE
It will not be easy. Nearly one in every two people oppose Macron’s pension reform, an Elabe survey showed this month.

As the government finalizes the draft bill, transport unions are plotting to bring major disruption to France’s rail network, ports and airports on Dec. 5th and perhaps beyond. Teachers, emergency room doctors and truck drivers are joining in.

After last-ditch talks this week, Prime Minister Edouard Philippe promised unions there would be no brutal transition from the old to new regime. But the government would hold its course, he said.

The last time a French president squared off against unions over special pension regimes it ended badly. In 1995, strikes paralyzed Paris and prime minister Alain Juppe pulled the reforms in a stinging defeat from which he failed to recover.

After Greece and Italy, France is the third biggest spender on pensions among developed nations, spending 14% of national output on pensions, OECD data shows. In comparison, Germany spends 10%, the United States 7% and Britain 6%.

Mariners are particularly burdensome: the state largely covers company contributions, in some cases fully, financing 78% of total contributions in a sector with 39,000 active workers and nearly three times as many retirees.

Furthermore, a sailor who spends part of his career on the sea before taking a land-based maritime job can still earn full benefits - a cherished idiosyncrasy at odds with Macron’s ambition.

“No-one argues that a mariner’s job is tough. The question is how do we gauge how tough?,” said an adviser to Macron’s pension reform tsar Jean-Paul Delevoye.

Slideshow (6 Images)
As the wind whipped across the Bay of Biscay, Lagarde argued his benefits were costly but deserved.

“At forty-five,” he said, “I’m at the age where I am starting to feel a weariness that’s down to my work.”


I'm weary, too (and 45).... but I'm not on a boat.
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