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The Evolution and Sustainability of Pension Systems the Role of the Private Pensions in Regard to Adequate and Sustainable Pensions

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  • Oana Claudia Ionescu

    (Titu Maiorescu University Author-Name: Alina Măriuca Ionescu
    Alexandru Ioan Cuza University of Iasi)

  • Elisabeta Jaba

    (Alexandru Ioan Cuza University of Iasi)

Abstract

The accentuation of the trend of demographic aging and the alarming deterioration of the economic dependency rate significantly affected the financial sustainability of the public pension system and stressed the need for a mixed system, public and private. Frank Fandenbrouke1 declared, with justifiable concern, that we are not sufficiently aware of the unprecedented scale of these social changes that will press very hard in the balance our future in the next 20-30 years. In this context, reforming pension systems should consider two major objectives, namely: long-term financial viability of the systems and ensuring adequate pensions towards maintaining a reasonable retirement income to prevent poverty and social exclusion of older people. This explains the fact that over the last decade, a growing number of states, as part of reforms to improve the sustainability of pension systems, attempted to directly involve social partners and individual citizens in ensuring the pensions, by expanding the future role of the pre-funded systems, privately managed. The impact of the financial crisis on private pensions and financial constraints of the state have highlighted some shortcomings of pre-financing, have seriously diminished public confidence in private pension systems and reinforced the need to develop appropriate and sustainable pension systems, from a social and political point of view. Future adequate pensions require pension systems to be funded in a sustainable manner in relation to companies subject to rapid aging. Pension adequacy and sustainability issues are thus inextricably linked. A recent World Bank report on pension reforms worldwide defined as proper a pension system "which provides benefits to the entire spectrum of the population and these benefits are sufficient to prevent poverty of older people, in addition to providing reliable means to ensure constant consumption over the lifetime for most of the population " (Holzmann and Hinz, 2005 and Draxler and Mortensen, 2011). Journal: Journal of Knowledge Management, Economics and Information Technology

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  • Oana Claudia Ionescu & Elisabeta Jaba, 2013. "The Evolution and Sustainability of Pension Systems the Role of the Private Pensions in Regard to Adequate and Sustainable Pensions," Journal of Knowledge Management, Economics and Information Technology, ScientificPapers.org, vol. 3(6), pages 1-13, December.
    • Handle: RePEc:spp:jkmeit:spi13-13
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    References listed on IDEAS

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    1. Michele Boldrin & Juan J. Dolado & Juan F. Jimeno & Franco Peracchi, 1999. "The future of pensions in Europe," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 14(29), pages 288-320.
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    Cited by:

    1. Jaafar, Roslan & Daly, Kevin James & Mishra, Anil V., 2019. "Challenges facing Malaysia pension scheme in an era of ageing population," Finance Research Letters, Elsevier, vol. 30(C), pages 334-340.
    2. Yue Guo & Lailei Lou & Tailai Guo & Zuwei Yu, 2017. "Valuing The Chinese Reimbursement System Of The Retirement Pension Insurance For Urban Employees," Eurasian Journal of Social Sciences, Eurasian Publications, vol. 5(2), pages 34-52.
    3. Adina Elena Dănuleţiu & Dan Constantin Dănuleţiu, 2018. "Analysis of the Romanian Private Pensions Evolution and Investments," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 18(1), pages 57-66.

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