Private Pension Systems and Policy Issues

by Organisation for Economic Co-Operation and Development

• ISBN13: 9789264176348
• ISBN10: 9264176349
• Format: Paperback
• Copyright: 2000-11-01
• Publisher: Lightning Source Inc

Summary

Pension systems are changing the world over. Both OECD and non-OECD countries are coming to face the consequences of demographic changes, and some have already embarked on innovative processes of pension reform. In this new environment employer and personal pension arrangements are expected to gain much prominence. This new OECD series is devoted to improving our understanding of private pension systems worldwide. It will provide an invaluable tool for academics, policy makers and actors in the private sector who will find in it a reference work on the main issues involved in the design, functioning, and regulation of private pension plans. This first volume provides an overview of recent developments in the private pension systems of four OECD countries (Hungary, Mexico, the United Kingdom and the United States) as well as an analysis of institutional investors in Latin America. It also addresses policy issues such as the design of private pension systems and actuarial, solvency and bankruptcy issues

Table of Contents

The Pensions System in the United Kingdom by The Association of British Insurers (ABI)	9	(14)
General	9	(1)
First pillar	10	(1)
Second pillar	10	(1)
Third pillar	11	(2)
Suppliers of pension schemes	13	(1)
Description of the first pillar	13	(3)
Description of the second pillar	16	(2)
Description of the third pillar	18	(2)
Future developments	20	(1)
Recent UK legislation affecting pensions	20	(1)
Supervision	20	(1)
Minimum funding requirement	20	(1)
Investment of scheme assets	21	(1)
Compensation scheme	21	(1)
Other provisions	21	(1)
Welfare Reform and Pensions Act 1999	21	(2)
Overview of the United States Private Pension System	23	(20)
Richard Hinz
Sources of retirement income	23	(1)
Characteristics of the private pension system	24	(2)
Development of the private pension system	26	(1)
Reasons for lack of growth in pension coverage	27	(1)
Shift from defined benefit to defined contribution plans	27	(1)
Growth in pension plan sponsorship	28	(1)
Non-covered workers	29	(1)
Financing and payment of pension benefits	30	(3)
Pension law and regulations	33	(1)
Tax treatment of private pensions	34	(2)
Fiduciary provisions	36	(4)
Summary	40	(3)
An Overview of the New Pension System in Mexico	43	(44)
Jaime A. Villasenor-Zertuche
Executive summary	43	(1)
The Mexican Social Security system	44	(1)
The old pension system	45	(6)
The IMSS reform in 1997	51	(6)
Relevant statistics of the recently reformed system	57	(2)
Investment guidelines	59	(1)
Fund valuation	60	(2)
Risk analysis in the pension system	62	(4)
Fund performance	66	(4)
The Three Pillars and other pension schemes	70	(1)
Integration of ``reforming countries''	70	(17)
Abbreviations used in the Mexican pension system	72	(2)
Collection process	74	(1)
Ownership of fund management companies by nationality	75	(3)
SIEFORES performance report	78	(9)
Case Study of the Three-Pillar Pension System in Hungary	87	(38)
Tibor Parniczky
Executive summary	87	(4)
Brief overview of the pension reform	91	(4)
Voluntary private pension system (third pillar)	95	(3)
The new mandatory funded private pension system (second pillar)	98	(5)
Guarantees	103	(2)
Supervisory framework	105	(1)
Mandatory private pension funds in practice	106	(19)
Regulations governing pension funds investment in Hungary	113	(8)
Administrative, record-keeping and reporting obligations of pension funds	121	(4)
Institutional Investors in Latin America: Recent Trends and Regulatory Challenges	125	(98)
Juan Yermo
Overview of institutional investors	127	(3)
The development of the regulatory and supervisory framework	130	(1)
Pension funds	131	(23)
Insurance companies	154	(16)
Investment companies	170	(7)
Main regulatory and supervisory challenges	177	(28)
The role of institutional investors as holders of financial assets	205	(9)
Conclusion	214	(9)
Private Pension Systems	223	(114)
Jean-Jacques Gollier
Introduction	223	(1)
General features of a private pension system	224	(16)
Definition of private pension systems	224	(1)
Why private pension schemes?	225	(3)
Typology of private pension systems. Design of plans	228	(3)
Financing mechanisms of private pension systems	231	(6)
Regulations applicable to private pension funds	237	(2)
The role of financial institutions	239	(1)
Private pension funds in the countries studied	240	(13)
Structural options for the first pillar	240	(7)
Interaction between the three pillars	247	(6)
Second-pillar schemes and control rules in the countries studied	253	(35)
Statistics on funding provisions	253	(5)
The relative proportion of insurers in private pension schemes	258	(9)
Applicable supervisory standards	267	(3)
Technical standards	270	(3)
Tax standards	273	(4)
Accounting standards	277	(1)
Selected information about the third pillar	278	(10)
Some specific points	288	(13)
The switch from defined benefit to defined contribution schemes	288	(5)
Commutation of benefits. Property aspects	293	(6)
Methods of adjustment	299	(2)
A dynamic approach to private pension management	301	(23)
General Considerations	301	(6)
Prudential standards and asset liability management	307	(17)
Current issues -- Conclusions	324	(13)
Review of current issues	324	(4)
Synthesis of main trends	328	(3)
By way of conclusion	331	(2)
The meaning of the parameter B1	333	(1)
Use of regression lines	334	(3)
The Containment of Bankruptcy Risk in Private Pension Plans	337	(34)
James E. Pesando
Introduction	337	(1)
Regulatory responses to bankruptcy risk: Overview and economic rationale	338	(2)
International experience	340	(19)
United States	340	(4)
Canada	344	(2)
United Kingdom	346	(6)
Germany	352	(3)
Japan	355	(3)
Other countries	358	(1)
Policy recommendations	359	(12)
Overview	359	(2)
Minimum funding (Advance funding) requirements	361	(1)
Plan termination insurance	362	(9)
Actuarial Issues Related to the Regulation of Pension Schemes and Life Insurance	371
Phillip Booth
The purposes of actuarial, accounting and regulatory valuations	371
Life insurance	371
Pensions	372
Actuarial frameworks for assessing solvency	375
Life insurance companies	375
Pension Funds	382
Valuation of liabilities: Bases and key assumptions	387
Safety margins/Capital adequacy	390