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  #211  
Old 09-24-2017, 06:21 PM
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UKRAINE

https://www.reuters.com/article/us-u...-idUSKCN1BX1JA

Quote:
Ukraine pension reform changes worry World Bank, IMF

KIEV (Reuters) - The World Bank and the International Monetary Fund are concerned about amendments to pending pension reform legislation needed to unlock further funding under a $17.5 billion IMF program, the World Bank’s Ukraine director said on Friday.

A draft law to put the buckling pension system on a sustainable footing passed a first reading in parliament in July, but the bill has been modified with scores of amendments ahead of a second round of voting.

“The revised draft law presented at the start of this week has been amended in a way that provokes significant concern at both the World Bank and the IMF,” the World Bank’s Satu Kahkonen was quoted as saying by news agency Interfax Ukraine.

.....
Ukraine, whose 12 million pensioners number almost as many as the working population, spends more on pensions as a percentage of gross domestic product than almost any other country.

.....
DEFICIT RISK

Prime Minister Volodymyr Groysman on Friday said the government proposed reform would prevent the deficit ballooning to more than 200 billion hryvnias ($7.6 billion) from the current level of 141 billion hryvnias.

“This reform is comprehensive, systemic and will lead to an increase in the size of pensions,” he told parliament.

In its original form, the draft law aimed to boost contributions to the pension fund by requiring citizens to work a set amount of years before retirement, starting Jan. 1.

It would also reduce the number of professions where workers can retire early, while raising the minimum pension, which currently equates to little more than $2 per day.

If carried out in line with IMF expectations, the reforms were estimated to create savings of at least 3 percent of GDP over the long term.

It is not clear how the latest amendments would affect the financial sustainability of the legislation.

Lawmakers were expected to debate and vote on the bill this week but delays mean it will not be addressed before Oct. 3.

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  #212  
Old 09-25-2017, 02:19 PM
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SWITZERLAND

http://www.dw.com/en/swiss-voters-ni...dum/a-40660501

Quote:
Swiss voters nix pension reform in national referendum
Voters in the alpine nation rejected a plan that would have increased taxes to fund state pension coffers. The retirement age for women would have also gone up, as the nation struggles to deal with an aging populace.

On Sunday, a majority of Swiss voters who took part in a nationwide referendum rejected a pension reform plan intended to secure retirement benefits for future generations. The proposed changes, known as Pension Reform 2020, would have secured retirement benefits for Switzerland's rapidly aging population, the measures' backers argued.
However, only 47 percent of Swiss voters supported the reform plan, according to initial poll results released by the GfS Bern institute, whereas 53 percent voted against the measure. Final results were due later Sunday evening, as many Swiss had cast mail ballots that still needed to be counted.
Read more: Swiss vote in favor of gradual nuclear phaseout
The proposed changes, which included raising tax on goods and services (VAT) in order to fund retirement benefits and upping the retirement age for women by one year, had been approved by the Swiss parliament in April.
Switzerland's highly direct democratic system includes four referendums per year, when citizens go to the polls to vote on important national initiatives or issues.

Controversial proposals
Switzerland's left-leaning and centrist parties had backed the controversial pension reform plan, while the conservative Swiss People's Party (SVP) and the pro-business Free Democratic Party (FDP) opposed the proposed changes, stating that they were not extensive enough to safeguard the nation's pension system for future retirees.

The proposed changes included a VAT increase from eight to 8.3 percent. Any increase in VAT requires amending constitutional law, which in turn requires double approval in a referendum — majority support among voters as well as support from more than half of the country's 26 cantons.
GfS' Co-director Lukas Golder told AFP that some voters may have supported the pension reform but not the proposed VAT increase that would have funded the changes.

The other proposed reforms cannot be enacted unless the VAT increase is approved. These include a 0.25 percent increase in both employer and employee contributions to the national pension fund and raising the retirement age for women to 65, the current age for men.



The Pension Reform 2020 also would have outlined more flexible retirement options for those ages 62 and 70.

Around 8 million people live in Switzerland, of whom 1.5 million are retirees. As in many European countries, the Swiss government fears the national pension system is on increasingly shaky ground. More and more Swiss baby boomers are nearing retirement age, life expectancy is at an all-time high, and interest rates that yield payoffs are very low.
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  #213  
Old 09-26-2017, 03:03 PM
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UKRAINE
https://www.ai-cio.com/news/world-ba...ension-reform/
Quote:
World Bank, IMF Concerned over Ukraine Pension Reform
The two institutions object to amendments made to proposed pension bill.
Spoiler:

The World Bank and the International Monetary Fund (IMF) have sent a joint letter to the Ukrainian government expressing their concerns over a slew of amendments that were tacked on to the country’s pension reform bill.

“The revised draft law presented at the start of this week has been amended in a way that provokes significant concern at both the World Bank and the IMF,” the World Bank’s Satu Kahkonen said, according to Interfax Ukraine.

However, Kahkonen didn’t detail which amendments gave the the World Bank and IMF cause for concern, and why.

Last week, Ukraine Prime Minister Volodymyr Groysman said the proposed reform would prevent the deficit from jumping to more than 200 billion hryvnias ($7.57 billion) from the current level of 141 billion hryvnias.

“This reform is comprehensive, systemic, and will lead to an increase in the size of pensions,” he told parliament, according to Reuters.

According to the World Bank, the Ukrainian government spends more on pensions than almost any other country in the world. In 2016, pension expenditures were 11% of the country’s GDP.

“These are exceptionally high shares. Yet, the pension for two-thirds of pensioners is so low that they require a subsistence top-up, even with 35 years of contributions to the formal pension system,” wrote Kahkonen in a commentary in Russian newspaper Novoye Vremya in April. “The point of retirement has become for many the start of a survival race, as the average old-age pension is only about $2 per day. Pension benefits are low, differentiation of pensions according to contributions is minimal, and mechanisms for adjustment to the cost of living are inadequate.”

Ukraine has approximately 12 million pension beneficiaries, and 14 million contributors, although some contribute only part of the year. World Bank projections indicate that the number of Ukrainians entering retirement will be considerably larger than the number of citizens entering the labor market. Estimates also show that over the next couple of decades, the ratio of contributors to pensioners may fall to two-thirds.

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  #214  
Old 10-02-2017, 01:35 PM
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PAYGO SYSTEMS

http://www.mauldineconomics.com/fron...nt-reality#pay

Quote:
Pay-As-You-Go Woes

The European nations noted above have nowhere near the crisis potential that the next group does: France, Belgium, Germany, Austria, and Spain are all pay-as-you-go countries (PAYG). That means they have nothing saved in the public coffers for future pension obligations, and the money has to come out of the general budget each year. The crisis for these countries is quite predictable, because the number of retirees is growing even as the number of workers paying into the national coffers is falling. There is a sad shortfall of babies being born in these countries, making the demographic reality even more difficult. Let’s look at some details.


Spoiler:
Spain was hit hard in the financial crisis but has bounced back more vigorously than some of its Mediterranean peers did, such as Greece. That’s also true of its national pension plan, which actually had a surplus until recently. Unfortunately, the government chose to “borrow” some of that surplus for other purposes, and it will soon turn into a sizable deficit.

Just as in the US, Spain’s program is called Social Security, but in fact it is neither social nor secure. Both the US and Spanish governments have raided supposedly sacrosanct retirement schemes, and both allow their governments to use those savings for whatever the political winds favor.

The Spanish reserve fund at one time had €66 billion and is now estimated to be completely depleted by the end of this year or early in 2018. The cause? There are 1.1 million more pensioners than there were just 10 years ago. And as the Baby Boom generation retires, there will be even more pensioners and fewer workers to support them. A 25% unemployment rate among younger workers doesn’t help contributions to the system, either.

A similar dynamic may actually work for the US, because we control our own currency and can debase it as necessary to keep the government afloat. Social Security checks will always clear, but they may not buy as much. Spain’s version of Social Security doesn’t have that advantage as long as the country stays tied to the euro. That’s one reason we must recognize the potential for the Eurozone to eventually spin apart. (More on that below.)

On the whole, public pension plans in the pay-as-you-go countries would now replace about 60% of retirees’ salaries. Further, several of these countries let people retire at less than 60 years old. In most countries, fewer than 25% of workers contribute to pension plans. That rate would have to double in the next 30 years to make programs sustainable. Sell that to younger workers.


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  #215  
Old 10-06-2017, 05:23 PM
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UKRAINE
https://www.reuters.com/article/ukra...-idUSL8N1ME4GE

Quote:

UPDATE 2-Ukraine parliament approves heavily amended pension reform
Spoiler:

KIEV, Oct 3 (Reuters) - The Ukrainian parliament approved pension reforms on Tuesday aimed at easing pressure from a pensions deficit of more than $5 billion while also raising the minimum pension.

Passing laws to put the buckling pension system on a sustainable footing is a key requirement for the next loan tranche from the International Monetary Fund.

But last week a senior World Bank official said the bank and the IMF were concerned about the hundreds of amendments that have been added to the draft pensions legislation since July, many submitted by populist factions in parliament.

The amended bill was backed by 288 lawmakers, comfortably over the 226 required to pass.

“We’re taking a historic decision to establish a fair pension system,” Prime Minister Volodymyr Groysman said before the vote.

It was not immediately clear which of the law’s amendments may conflict with Ukraine’s commitments under its $17.5 billion IMF programme.

Ukraine, whose 12 million pensioners almost equal the number of people with jobs, spends more on pensions as a percentage of gross domestic product than almost any other country.

Backed by the IMF, the government has sought to relieve pressure on the deficit by proposing stricter contribution requirements, while raising the minimum pay-out to pensioners, which currently amounts to little more than $2 per day.

But some aspects of the reform faced stiff opposition from some lawmakers, who said savings could be found without tighter rules on the retirement age. The IMF says those rules are needed to ensure the sustainability of the pension system.

Ukraine must enact viable pension reform, improve the privatisation process and tangibly reduce corruption to receive the next tranche of IMF loans.

Gas prices and the budget must also be in line with the programme, which has been repeatedly delayed by stop-start reform efforts since it was agreed in 2015.

Ukraine has received $8.4 billion so far from the Fund, helping it recover from a two-year recession following the 2014 annexation of Crimea by Russia and the outbreak of a Russian-backed insurgency in its industrial east.

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  #216  
Old 10-09-2017, 04:16 PM
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GREECE

http://www.reuters.com/article/euroz...-idUSL8N1MH1SN

Quote:
Greek pensioners protest benefit cuts, pin hopes on court

* Greek pensioners fear more cuts in benefits

* Several hundred protest outside top court

* Pensions cut more than a dozen times since 2010


Spoiler:
ATHENS, Oct 6 (Reuters) - Hundreds of elderly Greeks protested against deep cuts to their pensions outside the country’s top administrative court on Friday, as reforms passed to comply with international bailout demands leave them with ever less cash to live on.

Greece has been reeling from the impact of repeated rounds of austerity over the last seven years, as its creditors seek remedies for years of financial mismanagement that have culminated in the country needing three international bailouts.

Last year its official creditors pushed the leftist-led government to reduce the proportion of its budget spent on pensions, which are paid for by high tax rates, as a way to stimulate economic growth.

Pensioners have seen their benefits cut more than a dozen times since 2010 after Greece’s debt crisis came to light.

They have turned to the Council of State in Athens, the top administrative court, in a bid to halt the latest cuts, which are due to take effect in 2019.

About 600 protesters on Friday held banners reading “take the money from those who have it, not from pensioners” outside the court, blocking traffic on a busy central Athens avenue.

They are hoping that the court will rule the cuts unconstitutional, although no court decision is expected soon.

“My pension has been cut by more than 50 percent and I fear that after the cuts in 2019 I will lose my home,” said Christos Papadopoulos, 66, a retired telecommunications technician.

“I still owe the bank on the house and pay a small amount every month while also supporting two unemployed kids and my wife,” he said in a trembling voice. “It’s a depressing life, we delay paying electricity and water bills to get by.”

With unemployment at 21 percent and double that for Greeks under 25, pensioners on a steady income have long been a key anchor of support in austerity-hit Greek households.

Greece’s bailouts since 2010 have repeatedly taken aim at the pension system, which was also severely hurt by a 2012 debt restructuring that chopped the value of government bonds that most state pension funds held, hurting their finances.

Athens is aiming to exit its latest bailout next August and rely on market financing after repairing its fiscal derailment that shrank its economy by more than a quarter.

“My pension has been reduced to 900 euros a month from 1,200 euros and with the new (austerity) measures in 2019 it will drop to 700 euros,” said Stamatis, 67, a retired finance ministry worker.


https://www.reuters.com/article/us-e...-idUSKCN1C8113

Quote:
'Shame on you' chant Greek pensioners over bailout cutbacks
Spoiler:
ATHENS (Reuters) - Several hundred elderly Greeks shouting “shame” marched through Athens on Tuesday protesting against deep cutbacks to pension payments ordered by the indebted country’s creditors.

In weak autumn sun and a city teeming with tourists, pensioners took to the streets angered by more than a dozen rounds of cuts since Greece toppled deep into crisis in 2010.

More cuts will be on the way in 2019, under further reform to pension regulations.

Creditors including the EU and the IMF took some of the blame. But the protests were focused on the Leftist Syriza party which swept to power in 2015 promising to do away with austerity, then had to accept further cuts in return for a third multi-billion euro financial lifeline.

“I have had enough of their lies,” said Thanassis Lechos, a 69 year old who worked for 47 years in constructions and mines. He said his pension has fallen 30 percent in recent years.

“I have children and grandchildren, who are waiting for their granddad to support them,” he said, his voice breaking.

With unemployment at just over 21 percent - double that when taking into account people under 25 - pensioners on a steady income have long been the key earners in Greek households. Successive bailouts have repeatedly taken aim at the pension system, with creditors arguing that it needed streamlining.

Greece is expected to emerge from its third bailout adjustment program next August. “So what? Are they going to give me anything back?” asked Lechos. “I worked all my life to leave my kids something, but I’ve been driven mad by taxes.”


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  #217  
Old 10-15-2017, 02:00 PM
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THE NETHERLANDS

https://www.ft.com/content/5fdba8a4-...a-5521c713abf4

Quote:
Dutch pension reforms target final-salary schemes

Governments battling to pay retirement incomes will scrutinise proposals
Spoiler:


The Dutch government has published sweeping pension reform proposals aimed at replacing the current system that pays guaranteed retirement incomes based on workers’ salaries with arrangements that impose more risks on employees.

The Netherlands is widely regarded as having one of the world’s strongest and most sophisticated occupational pension systems, so the proposed reforms will be closely scrutinised by many governments that face challenges in paying retirement incomes.

The state-funded flat-rate public pension paid by the Dutch government will remain unchanged under the reforms, which focus on the country’s system of occupational pensions. Most Dutch employees belong to occupational schemes that are industry-wide defined benefit (DB) plans, where incomes in retirement are based on a measure of lifetime average earnings. Under the new arrangements, which are scheduled to come into place in 2020, DB pensions will be replaced by defined contribution (DC) plans, where retirement incomes will depend on savings pots accumulated by individuals throughout their working lives.

In contrast to the UK, where most companies have phased out their final-salary pension schemes, existing occupational DB schemes in the Netherlands will not be closed. Instead, DB assets and liabilities will be transposed into the new DC plans through a transition process. But the reforms will mean that the risk of having an inadequate pension in old age will now sit more fully with individual savers.

Jacqueline Lommen, a senior pensions strategist at State Street Global Advisors, the asset manager, said the Dutch government wanted to introduce a pension system that ensured more fairness between generations.

“The decision to change the design of a pension plan and to transfer the existing DB services will be up to the trustees of each individual pension trust. However, the government intends to support a collective approach that will encourage all pension funds to shift into the new DC arrangements,” said Ms Lommen.

She added that the changes should make Dutch occupational pension funds less vulnerable to fluctuations in interest rates as well as ending requirement for them to maintain solvency buffers to ensure they can pay pension promises.

The Dutch government has indicated that it is willing to provide financial support, including tax changes, to ensure a smooth transition and to minimise any uneven effects across age cohorts and different groups of scheme members. Costs have been estimated at between €25bn and €100bn.

The Federation of the Dutch Pension Funds (Pensioenfederatie) said that “a lot of questions” remained unanswered.

“The transition needs to be fair for all generations. There are still serious legal concerns related to EU equality law, particularly [questions of] age discrimination in pension accruals,” said a Pensioenfederatie spokesperson.

PFZW, the pension fund for care workers and welfare-sector employees, said it was “satisfied” that important principles of current pension arrangements could be upheld in the new system.


It will remain compulsory for employees to participate in company or collective sectoral pension schemes. This will help keep costs down and provide exposure to alternative investments that individuals cannot access. It will also help to pool risks, such as shocks to financial markets.

Two post-retirement payout options have been proposed. Scheme members will be allowed to maintain a personal account during retirement and gradually draw down accrued savings on a monthly basis. Scheme members will also be able to transfer pension savings from personal accounts into collective pots after retirement as a way to reduce risks.

“The outcomes will be the same in terms of retirement benefits. The preferred approach will mainly depend on the type of institution offering the pension,” said Ms Lommen.

Trade unions, employers’ associations and the government will now discuss the proposals, with the aim of reaching an agreement early next year.

An analyst who did not wish to be named said that several pension funds were running simulations to compare the proposed DC contracts with results delivered by existing DB arrangements.

“Support for the shift to the new DC contract among pension funds and trade unions will depends on these results,” said the analyst.

PFZW said it would require time for all parties involved to agree detailed plans for the new system and that it was of “great importance” that a final agreement was supported by both employers and employees.

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