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  #51  
Old 04-28-2015, 12:10 PM
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AUSTRALIA

http://www.theaustralian.com.au/opin...-1227323647392

Quote:
The age pension is about $20,000 a year; hardly a lavish income. Yet if you believe Tony Abbott and Scott Morrison’s rhetoric you’d think pensioners are bankrupting Australia. This is simply untrue.

Let’s look at the facts. Even the Treasurer’s Intergenerational Report shows the age pension, exactly as it is without changes, will account for just 3.6 per cent of gross domestic product by 2054-55. Whichever way you look at it, Australia spends a relatively small proportion of our GDP on the pension.

Public spending on old-age benefits (age pension and veterans pensions) across the OECD already averages 7.8 per cent of GDP. Public spending on these payments is highest — greater than 10 per cent of GDP — in Austria, France, Germany, Italy and Japan. The US and Britain devote 6.8 per cent and 6.2 per cent of GDP respectively to spending on pensions. In New Zealand public spending on these payments is 4.7 per cent of GDP.

When Morrison says the age pension is not sustainable, he’s wrong — it is. The Allianz Pension Sustainability Index last year found Australia has the most sustainable pension system in the world. Allianz, one of the world’s largest asset management companies, measures the pressure on governments across the globe to reform their pension system.

....
The Australian Council of Social Service estimates this will result in an $80 a week cut to pensions across the next decade. It will break a decades-old bipartisan commitment to link pension indexation to wages growth.

If Abbott gets his way, the pension will drop from 28 per cent of average weekly earnings today to just 16 per cent by 2055. Changing the indexation system is the least equitable way to address the sustainability of our retirement income system. As COTA’s chief executive Ian Yates says: “Full pensioners would be living well below the poverty line.” Does anyone seriously believe pushing pensioners into *poverty and hardship is good public policy?

Of course ensuring the sustainability of our retirement income system is important, but it needs to be done in a fair and equitable way. Labor knows this; that’s why we introduced compulsory superannuation. Our universal super system will continue to take pressure off the age pension. The maturing of our super system will result in a decline in the proportion of people of age pension age claiming the full rate age pension. By 2047, the proportion of Australians receiving a full pension will fall from about 50 per cent to 30 per cent.

And Labor is continuing to make decisions to ensure the integrity of the pension and superannuation system is maintained. The recent superannuation proposals Labor has announced are all about putting fairness back into the system — they are fair and they’re good for the budget.

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  #52  
Old 04-28-2015, 12:33 PM
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ARGENTINA

http://www.forbes.com/sites/pensionr...eath-foretold/

Quote:
Argentina is one of several countries that implemented a major structural reform of the pension system during the 1990s and then, more recently, decided to reverse itself. This note presents a summarized discussion of the motivations and main characteristics of the early reform, the performance of the system since then, and the rationale for and impacts of the recent changes.

Argentina first reformed its pension system in 1993, introducing important modifications to a system that had almost 90 years of history and was designed as a traditional pay-as-you-go scheme. The law change was the Government’s response to a growing financial imbalance in the old system, fueled by the combination of generous parameters, aging participants, and weakening labor markets (with growing informality and declining real wages). This long-term imbalance imposed growing pressures on fiscal resources: the rising percentage of general revenue funds had to be used to finance the pension system’s deficits against a backdrop of public finances also facing trouble. The pension reform was also implemented amidst a strong pro-privatization political climate, and it was part of a larger strategy that included the transfer to private management of many publicly-owned companies such as the utilities, transportation, and communication providers.

.....
Unfortunately, the new system did not perform as well as expected with regard to financial sustainability, increased coverage, and improvement of capital markets. Figure 1 shows that the new funded scheme did result in additional financial pressures for the system, since contributions previously directed to the PAYG scheme were now deposited in individual accounts. Nevertheless, the parametric reforms partly compensated for this, and by 2003, the net effect was positive. Less positive was the impact of the reform on pension coverage rates, despite stronger incentives to contribute. While it is difficult to assess this impact without a clear counterfactual, particularly in the context of a declining labor market performance, the sharp reduction in the percentage of salaried workers contributing to the pension system, falling from around 72% in the early 1990s to 63% by 2000, and as low as 52% by 2003, indicates that, at best, the new model did not result in more participation in the retirement system.
.....
Argentina’s experience with pension reform offers some interesting lessons which may be useful for other countries considering changing their own programs. Among those, we see the following:

Overselling the expected positive impacts of a reform may help to get it approved, but will be probably damaging in the medium term, as stakeholders compare real-world performance to what was promised.

No system design is free of political or financial risks. While combining PAYG and funded elements might help to balance these risks, a major financial and or political crisis will most certainly affect all policies, as policymakers worry more about their short-term survival than the system’s long term sustainability.

A reform of the magnitude implemented in Argentina in the 1990s requires not only approval from the legal system, but also a wide social and political consensus that ensures it can remain resilient to short term negative performance.

In the long term, the fate of all pension systems depends on the sustained growth of output per capita which allows distributing all generations to benefit. Unfortunately, during times of economic decline, no pension system can deliver satisfactory results, regardless of its design features.

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Old 04-30-2015, 04:42 PM
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ONTARIO

I guess this goes here

http://kitchener.ctvnews.ca/ontario-...park-1.2350347

Quote:
TORONTO -- Ontario passed legislation Wednesday to create a provincial pension plan for more than three million people who do not have a workplace pension, despite critics' warnings it amounts to a job-killing payroll tax.
Workers will be required to contribute 1.9 per cent of their pay to the Ontario Retirement Pension Plan, to a maximum of $1,643 a year, which employers have to match for every employee.
"Over $3.5 billion will be invested in the fund each year," said Associate Finance Minister Mitzie Hunter. "Members of the plan will be able to have an income stream for life when they retire."


The mandatory contributions will be phased in over two years, starting with larger companies Jan. 1, 2017 before moving to smaller operations like convenience stores and dry cleaners.
Ontario wants to mirror the Canada Pension Plan as much as possible, and Hunter said the province still would prefer to enhance the CPP instead of creating its own plan. Contributions would be "locked-in" just like CPP contributions, prohibiting people from cashing them out before retirement.
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Old 05-06-2015, 08:40 AM
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AUSTRALIA

http://www.dailytelegraph.com.au/new...-1227337867938

Quote:
ALMOST 4.1 million Australians will remain better off after next week’s federal Budget, with Cabinet approving the scrapping of proposed changes to the indexation of pension payments.

The confirmation that plans to confine pension rises to rises in the Consumer Price Index have been officially ditched will blunt Labor’s attack over retirement funding and its claims pensioners would be $80 worse off.

Senior Cabinet sources yesterday confirmed the government would keep pension indexation linked to the higher of three benchmarks, including CPI and average wage rises.

However, as revealed by The Daily Telegraph yesterday, the trade-off would be a tightening of the eligibility test to receive a pension, with a reduction in the asset threshold for assets other than the family home to $820,000 for couples and about $550,000 for singles.

The measure, expected to be announced prior to Tuesday’s Budget, will shave more than $2 billion off the $42 billion annual pension bill.

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Old 05-10-2015, 07:19 PM
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AUSTRALIA

http://www.theaustralian.com.au/nati...-1227344737211

Quote:
The federal government is being urged to find more cuts to the $45 billion Age Pension and to tackle the growing cost of superannuation tax breaks after confirming a budget plan to tighten pension eligibility for wealthier retirees.

As seniors’ groups backed the new approach, economists cautioned it was only a step towards making the pension sustainable and that more would have to be done to bring the swelling budget deficit under control.

Tony Abbott ruled out changes to super yesterday, but there are growing calls for action on concessions for the wealthy who can park significant assets in their super account and draw tax-free income in retirement.

......
Mr Daley said the government had to keep looking at the Age Pension as a target for spending cuts, repeating a Grattan Institute proposal to include the family home in the assets test.

“The budget bottom line is not sustainable and sorting it out means inevitably looking at the age pension,” he said.

The changes confirmed yesterday will generate a $2.4bn saving over the next four years amid positive signs they could pass the parliament, with the Greens open to supporting reform, Labor reserving its options and independent senators welcoming the new approach.

Payments will increase for 120,000 part-pensioners, as rev*ealed in The Australian on Wednesday, while another 50,000 will be upgraded from the part-pension to the full pension.

The new assets test will halt the part-pension for 91,000 wealthier recipients — for example, a couple with a home and more than $823,000 in other *assets — while reducing payments for another 235,000 people.

Pension reform has become a central dispute in the fight over balancing the budget as Mr Morrison declares the current system unsustainable, but Labor insists the nation can afford an increase in the spending burden.

Labor has instead proposed changes to the super system that would limit tax breaks for wealthier Australians, with higher tax rates on contributions for high-income earners and limits on tax-free withdrawals in retirement.

If legislated, the Coalition’s changes to pension eligibility would come into force in January 2017, but the savings will fall short of the $22.7bn forecast over the decade to 2025 from the pension reforms in last year’s budget, which would have adjusted indexation for all pensioners but have now been abandoned.

Greens senator Rachel Siewert said the new proposal was a “step in the right direction” but she attacked the government’s plan to raise the pension age to 70 and called for a full review into retirement incomes.

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Old 06-21-2015, 01:08 PM
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AUSTRALIA
MEANS-TESTING

http://www.smh.com.au/federal-politi...21-ghtjk3.html

Quote:
Access to the pension will become harder than the government has conceded under its deal reached with the Greens, a new analysis finds.

The government claims that all couples who own their home with additional assets of up to $450,000 will get a higher pension, but an analysis conducted by Industry Super for the Senate inquiry into the changes finds that some couples will be $2900 worse off than the government claims.

The Coalition and The Greens combined on Thursday to force the inquiry to report on Monday, allowing a Senate vote as soon as this week. The accelerated timetable means the inquiry will be unable to hold hearings.

The changes lift the assets-test free limit for homeowner couples from $286,500 to $375,000 but withdraw the pension much faster than before, by $3 for every $1000 of assets over the limit rather than $1.50.

.....
The department of social security uses life expectancy estimates up to 11 years lower than those used in the government's intergenerational report. The estimates are so-called 'period' estimates prepared by the Bureau of Statistics without taking into account likely advances in longevity. The treasury prefers the 'cohort method' which "takes a better account of increasing life expectancy trends over time". The effect of the department's choice is to make it look as if the assets of retirees who miss out on the pension will last for more of their life than they will.

It also assumes rates of return on assets well above those used by other agencies and points to the gain in the sharemarket index of 12.7 per cent in the past year without acknowledging that it was unusual.

http://www.businessspectator.com.au/...incentive-save

Quote:
Among the $700,000 crew, because their right to a part pension has been taken away, there’s a big move on by sharp retirees to actually reduce asset levels in order to qualify for a part pension.

As one Melbourne retiree in his late 60s put it very succinctly in a note to The Australian last week, “we have started to spend down to the $450-$500k level leading up to January 1, 2017.”

He said he and his wife had combined assets of about $700,000 plus their house.

“We’ll fix up the house, go on holidays etc, and the best part is, that a trip down to our local Centre*link office last week to divulge our plan was met positively.

“A helpful Centrelink staff member gave us a number of pre-addressed envelopes and asked us to advise of our asset wind down program in order that our pension could be adjusted progressively.

“In the past, we would have saved up for large expenditure items, but not any more.

“The incentive to save has evaporated, and I’ve formed a far more positive view of our friends down at Centrelink.’’

You can see what’s happening here. An attempt by the government to reduce Age Pension outlays looks quite likely to have the opposite effect, and those wry quotes above show what normal, rational retirees do when they confront a change in the rules. They change their behaviour.

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Old 06-21-2015, 01:24 PM
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GREECE

http://www.theguardian.com/world/201...-crisis-people

Quote:
With a jobless rate of about 26% – youth unemployment is at 50% – and out-of-work benefits of €360 a month generally paid for no longer than a year, pensions have become “a vital part of the social security net for many, many people,” said Vovou. “Retired parents are having to help their adult children everywhere. And now they’re demanding we cut them even more? It’s just so very wrong.”

Pensions have become arguably the biggest hurdle in the tortuous, on-off negotiations between the leftwing government of the prime minister, Alexis Tsipras, and Greece’s creditors: its eurozone partners, the European Central Bank and the International Monetary Fund.

Retired parents are having to help their adult children. And they’re demanding we cut them even more? It’s just wrong.
Sissy Vovou
Before they will release €7.2bn in aid that Greece needs to pay public-sector salaries and pensions and repay €1.6bn in IMF loans, those lenders want further reforms to the pensions system, including penalties to put people off taking early retirement and more cuts to even the lowest pensions.

Tsipras is so far refusing to implement the measures, aimed at shaving the equivalent of 1% of GDP off the country’s pension bill, arguing they will do nothing to help Greece emerge from a slump that has seen the country’s economy shrink by 25%, and may only deepen its humanitarian crisis.

......
Greece also had a remarkable 580 professions deemed hazardous or strenuous enough to qualify for early retirement: firemen and construction workers, certainly, but also hairdressers (because of the chemicals), wind instrument players (gastric reflux) and radio presenters (microbes in microphones).

But some reforms are under way: those 130 funds have shrunk to 13, the standard retirement age for men has been lifted to 67, and, above all, since 2010 public and private sector pensions have been severely pruned, on a scale ranging from a 15%-cut for the very lowest (under €500 a month) to as much as 44% for highest (more than €3,000).

Greek pensions are now, on the whole, far from exorbitant: social security ministry figures show the average main pension is €713 a month, and the average top-up pension – typically funded by an industry retirement scheme – €169 per month. Some 60% of pensioners get less than €800 gross a month, and 45% live on less than the monthly poverty limit of €665.

.....
Among the pension cuts being proposed is the abolition of the EKAS, a variable supplementary payment made to nearly 200,000 Greek pensioners to bring their monthly income up to €700 a month. (Other suggestions made by Greece’s creditors would hit people like that particularly hard: a hike in the tax on electricity, for example, from 13% to 23%).

Few Greeks think further pension cuts will achieve anything. They may also be illegal: the country’s highest court has already ruled that the private-sector pension cuts pushed through in 2012 were unlawful because they “deprived pensioners of the right to decent life”.

http://www.reuters.com/article/2015/...0OY0L020150618

Quote:
The "blind insistence" on cutting Greek pensions will only worsen the country's already dire financial crisis, Greek Prime Minister Alexis Tsipras wrote in a German newspaper commentary on Thursday.

In a guest column for Der Tagesspiegel newspaper in Berlin, Tsipras also rejected the "myth" that German taxpayers are paying Greek pensions and wages. He said Greeks, contrary to the widespread belief in Germany, work longer than Germans.

"The blind insistence of cuts (in pensions) in a country with a 25 percent unemployment rate and where half of all the young people are unemployed will only cause a further worsening of the already dramatic social situation," Tsipras wrote.

He said that pensions are the only source of income for countless families in Greece. In Athens on Wednesday he also rejected pension cuts that creditors are seeking to unlock aid.

Tsipras also wrote that the state's expenditures for pensions and social spending were cut by 50 percent between 2010 and 2014. "That makes further cutbacks in this sensitive area impossible."

http://www.cnbc.com/id/102770035

Quote:
After 2010, measures were put in place by the Greek government that encouraged workers not to take early retirement, making retirement before the age of 60 very difficult. At the same time, the number of annual pension payments was reduced from 14 to 12, after the government eliminated "bonus payments".

The IMF praised the reforms at the time and while the "primary" or core pay-as-you-go system was overhauled, the "auxiliary" or secondary system made no changes.

As it stands currently, Greece still spends more than any other country in the European Union on pensions as a proportion to GDP – with the country shelling out a whopping 17.5 percent according to Eurostat.

However this does not give us the full picture, as Greece has an aging population, with one of the highest "age dependency ratios" or the level of support given to younger and older citizens by the working age population.

The country's old-age dependency ratio is around 30 percent in Greece, one of the highest in Europe, according to Eurostat.

.....
Why are they so crucial?

The IMF has insisted that the Greek government cannot "offer truly credible measures" that will result in a deal without including a further set of adjustments to the pension system.

"Why insist on pensions? Pensions and wages account for about 75 percent of primary spending; the other 25 percent have already been cut to the bone," IMF chief economist Olivier Blanchard said in a blog post on Sunday.

"Pension expenditures account for over 16 percent of GDP, and transfers from the budget to the pension system are close to 10 percent of GDP

"We believe a reduction of pension expenditures of 1 percent of GDP (out of 16 percent) is needed, and that it can be done while protecting the poorest pensioners. We are open to alternative ways for designing both the VAT and the pension reforms, but these alternatives have to add up and deliver the required fiscal adjustment," he added.


http://news.sky.com/story/1504923/gr...a-too-generous

Quote:
An area that has come under intense scutiny in the Grexit debate is the country's pension system - and accusations that it is overly generous. Here some key questions are answered.

What does Greece spend on its pensioners?

According to Eurostat's most recent 2012 data, pensions spending as a percentage of its output or GDP is 30% more generous in Greece than it is in the UK. Greece spends 14.3% of its GDP on old age pensions whilst the UK spends 11.0%

However, because Greek GDP came under sustained pressure during the recession, falling by a whopping 8.9% in 2011 alone, this has the effect of increasing the apparent generosity of Greek pensions.

That said, a country's pensions system must mirror its overall prosperity - no-one would argue that Sudan's pension system for instance should be as generous as say Luxembourg's.

If we look at at the absolute generosity of Greek pensions, Eurostat data tells us that in 2012 the total pensions expenditure per beneficiary for old-age persons was €16,036 in UK and €10,785 in Greece.

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  #58  
Old 07-16-2015, 05:07 PM
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GREECE

http://money.cnn.com/2015/07/15/news...nomy-pensions/

Quote:
The Greek pension system is messy, convoluted and downright weird, giving preferential treatment to some workers like hairdressers, sausage makers and policemen, while penalizing farmers.
The expensive, hodge-podge system has contributed to Greece's debt crisis, so the government must commit to fix it before it gets its $96 billion bailout.
But the Greek government has resisted these changes for years.
Why? Because it's exceedingly difficult to overhaul a system that citizens (aka voters) depend on.
To understand the big, fat, Greek pension problem, here's a look at some of the key facts and numbers:
1) The average retirement age in Greece has been falling for years, with men retiring at 62 and women retiring at 60, according to OECD data, even though the 'official' retirement age was recently raised to 67.

.....
2) Greece spends more on pensions as a proportion of its economy than any country in the European Union -- more than double the spending of Estonia, Ireland and Slovakia.
3) Roughly 2.7 million Greeks are receiving pension benefits out of a population of 11 million. This figure has been rising for years and is expected to keep climbing as the population ages.
4) Greece has one of the worst pension systems in the world when it comes to financial sustainability, due to the nation's high debts and high ratio of older dependents. An Allianz report from 2014 shows Greece's pension system ranks 42nd out of 50 countries. But Allianz notes that recent pension reforms gave Greece a boost in the rankings, after it was 'bottom of the barrel' in 2011.

It's true that Greece has already made substantial cuts. Pensions paying over 2,000 euros per month were cut by more than 40%, while pensions paying less than 1,000 euros per month were cut by 14%, said Tinios.
But further reforms are needed because Tinios says the rules have generally protected the interests of Baby Boomers, high earners and well-connected groups, while shifting the burden to the very old, the very young and the poor.
And the dwindling number of young workers can't provide enough support.
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Old 07-18-2015, 08:01 AM
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ONTARIO, CANADA

http://www.thestar.com/news/canada/2...sion-plan.html

Quote:
With an election looming, the federal Conservatives have fired a salvo at Ontario’s Liberal government in a bid to derail Premier Kathleen Wynne’s new provincial pension plan.
In a letter leaked to the media before it was sent to Queen’s Park, federal Finance Minister Joe Oliver said Ottawa won’t provide administrative support for the retirement scheme because the Tories disagree with it.
Ontario’s proposed pension plan would “take money from workers and their families, kill jobs and damage the economy,” Oliver, a Toronto MP, wrote with an eye toward the Oct. 19 election.
“For these reasons, we will not assist the Ontario government in the implementation of the ORPP,” he said, referring to the Ontario Retirement Pension Plan, Wynne’s cornerstone election promise in the June 2014 campaign.
“Administration of the ORPP will be the sole responsibility of the Ontario government, including the collection of contributions and any required information.”
Ontario Finance Minister Charles Sousa said it was “incredibly disappointing that the federal government is refusing to recognize the need for people to achieve a secure retirement future.”

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Old 08-09-2015, 09:46 AM
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SWEDEN

http://www.ft.com/intl/cms/s/0/2f53a...#axzz3iKDT90Ld

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High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/2f53ab6a-3...#ixzz3iKEjUm5K

The Swedish government’s plan to overhaul the country’s pension system has prompted condemnation from senior officials who fear the proposal will put the entire retirement framework at risk.

The proposal would lead to the closure of two of Sweden’s six state pension funds, known as the AP funds.

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/2f53ab6a-3...#ixzz3iKEo5lcP

The SKr23.6bn ($2.7bn) private equity-focused AP6 fund would be rolled into AP2, the largest of the funds. One of AP1, AP3 and AP4 would also be closed under the plan, which is intended to improve performance and reduce running costs.
The funds were deliberately set up as separate entities to avoid political meddling. Two of Sweden’s eight political parties have opposed the reforms, as well as the head of AP2, which has escaped the threat of closure.
Eva Halvarsson, chief executive of AP2, said: “Sweden’s AP funds work well and are cost effective. It is important that there are several independent funds pursuing different strategies.
“If implemented, the reforms will reduce this spread of risk and the relative independence enjoyed by the AP funds. For Sweden’s pensioners, the reforms are going to cost more than they are worth.”
In AP2’s latest annual report, Ms Halvarsson added that eliminating one or more AP funds “poses significantly increased risks”. She said: “Rather like removing the leg from a stool, it’s likely to collapse.”
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