Pension system reforms, the capital market and saving

Includes bibliography

Pension legislation for federal public servants in Brazil

This paper addresses the creation of pension funds for federal civil servants in Brazil, analyzing the existing legislation and regulation on this issue. To this end, it takes off based on the genesis of the Brazilian private pension plans, logging the emergence of private funds as well as the existence of various laws and constitutional amendments prior to Law 12.618/2012, which provided for the pension funds system for Brazilian federal public servants. It also identifies proponents and opponents to the Foundation for Pension Funds of Federal Civil Servants (FUNPRESP), signaling the discursive construction of the pension fund schemes as central character in contemporary welfare capitalism. Finally, presents controversial aspects of the new pension fund law developments in Brazil.

Defense Expenditure: Central America and The Dominican Republic

It is often speculated that the high allocation of funds to retirement pension systems has influenced the capacity of Central American and Dominican Republic military to modernize. Yet, the comparative study of the allocation of pension and social funds in these particular countries suggest that there is not direct linkage between the poor funding of military modernization plans and the allocation of funds to military pension systems. The research conducted on this subject shows the following results: 1. The Dominican Republic is the only country that has embarked on a considerable procurement of modern equipment and still reports the largest proportion of social expenditures. 2. El Salvador’s defense budget allocates minimal funding to Social Welfare Institute, which as alternative sources of funding. In 2009, El Salvador increased 15 percent funding to the military to respond to increased role in domestic security issues. 3. The Guatemalan defense expenditure on social programs is fairly low, but it has grown during the past six years due to processes of demobilization. However, the Military Social Welfare Institute is administered by a decentralized institution funded directly by the Ministry of Finance. If it were to be considered as a part of the defense budget, its social expenses would account for almost 16% of it. 4. The Honduran Defense Budget has faced a considerable enlargement during the past four years, with social spending expenses taken precedence over modernization efforts. 2 5. The Nicaraguan system of military pensions is administered by a decentralized entity (IPSM) through a system of salary deductions. Information on the funding of this entity is inconclusive. The Nicaraguan Defense spending on social services has reported a drastic 90% drop since the year 2007.

Defense Expenditure: Andean and Amazon Regions

The Andean and the amazon, comprised of Venezuela, Colombia, Bolivia, Peru and Ecuador, have recently undertaken significant modernization efforts ranging from equipment, logistics, doctrine, training, deployment and the re-definition of the roles and missions of their forces. In most cases, motivations to modernize have been internal, such as continuing operations against armed groups as in the case of Colombia and Peru, enhance border control and sovereignty enforcement, as in the case of Ecuador and Brazil or regime control in Venezuela. However, they are complemented by perceptions of external threats, including traditional intra-state conventional wars. The increased tensions between Colombia and Venezuela and Ecuador as well as the historic Peru-Chile tensions are the most salient examples. Although diplomacy –especially defence diplomacy- has worked to a good degree in creating and strengthening confidence building measures, the potential for inter-state conflict is higher in this region of the Americas. This region has seen the recent emergence of long-term modernization plans, initially in Colombia followed by Venezuela and Ecuador and probably best embodied in scope and scale by the Brazilian National Defence Plan (for its long term vision). Although it has been speculated that high allocation of funds to retirement pension systems has had an impact on delaying modernization plans, this comparative study on the allocation of pension and social funds in these particular countries concludes that there is no direct linkage between the poor funding of military modernization plans and the diversion of funds to military pension systems.

The market value implications of pension asset allocation

Pension funds have been part of the private sector since the 1850's. Defined Benefit pension plans [DB], where a company promises to make regular contributions to investment accounts held for participating employees in order to pay a promised lifelong annuity, are significant capital markets participants, amounting to 2.3 trillion dollars in 2010 (Federal Reserve Board, 2013). In 2006, Statement of Financial Accounting Standards No.158 (SFAS 158), Employers' Accounting for Defined Benefit Pension and Other Postemployment Plans, shifted information concerning funding status and pension asset/liability composition from disclosure in the footnotes to recognition in the financial statements. I add to the literature by being the first to examine the effect of recent pension reform during the financial crisis of 2008-09. This dissertation is comprised of three related essays. In my first essay, I investigate whether investors assign different pricing multiples to the various classes of pension assets when valuing firms. The pricing multiples on all classes of assets are significantly different from each other, but only investments in bonds and equities were value-relevant during the recent financial crisis. Consistent with investors viewing pension liabilities as liabilities of the firm, the pricing multiples on pension liabilities are significantly larger than those on non-pension liabilities. The only pension costs significantly associated with firm value are actual rate of return and interest expense. In my second essay, I investigate the role of accruals in predicting future cash flows, extending the Barth et al. (2001a) model of the accrual process. Using market value of equity as a proxy for cash flows, the results of this study suggest that aggregate accounting amounts mask how the components of earnings affect investors' ability to predict future cash flows. Disaggregating pension earnings components and accruals results in an increase in predictive power. During the 2008-2009 financial crisis, however, investors placed a greater (and negative) weight on the incremental information contained in the individual components of accruals. The inferences are robust to alternative specifications of accruals. Finally, in my third essay I investigate how investors view under-funded plans. On average, investors: view deficits arising from under-funded plans as belonging to the firm; reward firms with fully or over-funded pension plans; and encourage those funds with unfunded pension plans to become funded. Investors also encourage conservative pension asset allocations to mitigate firm risk, and smaller firms are perceived as being better able to handle the risk associated with underfunded plans. During the financial crisis of 2008-2009 underfunded status had a lower negative association with market value. In all three models, there are significant differences in pre- and post- SFAS 158 periods. These results are robust to various scenarios of the timing of the financial crisis and an alternative measure of funding.

Short-term Trading in Long-term Funds: Implications for Financial Managers

Most hospitality firms do not consider managing stock portfolios to be a main part of their operations. They are in the service business, using their real assets and the services provided by employees to create valuable experiences for guests. However, the need to focus on stock investments arises through those employees. Employees consistently rank benefits, including retirement benefits, among the top five contributors to job satisfaction and as a key consideration in accepting a job.1 It is not surprising, then, that more than 90 percent of companies with 500 or more employees offer retirement plans. The five largest hotel companies in the U.S. have over $10 billion in assets under management in their retirement plans, making these plans a key component in retirement investment decisions.

Bahrain skills gaps study : tourism, construction, and education skills plans

The tourism, construction, and education plans and skills strategies (embedded in project reports) were developed as part of a nation-wide comprehensive research project covering current, emerging and future skills deficiencies and requirements in Bahrain’s labour market. The research covered the majority of economic sectors and activities in the Kingdom and will serve as a basis for formulating industry and occupational outlooks as well as career guidance and awareness activities by academic and training institutions across Bahrain. It will provides foundation work for industry skills councils in order to conduct and achieve a uniform system of occupational standards across industries, occupations and job levels.

Framework for assessing financial literacy and superannuation investment choice decisions

There is a worldwide trend towards rapidly growing defined contribution pension funds in terms of assets and membership, and the choices available to individuals. This has shifted the decisionmaking responsibility to fund members for managing the investment of their retirement savings. This change has given rise to a phenomenon where most superannuation fund members are responsible for either actively choosing or passively relying on their funds’ default investment options. Prior research identifies that deficiencies in financial literacy is one of the causes of inertia in financial decision-making and findings from international and Australian studies show that financial illiteracy is wide-spread. Given the potential significant economic and social consequences of poor financial decision-making in superannuation matters, this paper proposes a framework by which the various demographic, social and contextual factors that influence fund members’ financial literacy and its association with investment choice decisions are explored. Enhanced theoretical and empirical understanding of the factors that are associated with active/passive investment choice decisions would enable development of well-targeted financial education programs.

CBCT-guided radiotherapy for locally advanced head and cancer: dosimetric impact of weight loss on VMAT and IMRT plans for selected organs at risk structures (OARs)

Purpose: It is common for head and neck patients to be affected by time trend errors as a result of weight loss during a course of radiation treatment. The objective of this planning study was to investigate the impact of weight loss on Volumetric Modulated Arc Therapy (VMAT) as well as Intensity modulated radiation therapy (IMRT) for locally advanced head and neck cancer using automatic co-registration of the CBCT. Methods and Materials: A retrospective analysis of previously treated IMRT plans for 10 patients with locally advanced head and neck cancer patients was done. A VMAT plan was also produced for all patients. We calculated the dose–volume histograms (DVH) indices for spinal cord planning at risk volumes (PRVs), the brainstem PRVs (SC+0.5cm and BS+0.5cm, respectively) as well as mean dose to the parotid glands. Results: The results show that the mean difference in dose to the SC+0.5cm was 1.03% and 1.27% for the IMRT and VMAT plans, respectively. As for dose to the BS+0.5, the percentage difference was 0.63% for the IMRT plans and 0.61% for the VMAT plans. The analysis of the parotid gland doses shows that the percentage change in mean dose to left parotid was -8.0% whereas that of the right parotid was -6.4% for the IMRT treatment plans. In the VMAT plans, the percentages change for the left and the right parotid glands were -6.6% and -6.7% respectively. Conclusions: This study shows a clinically significant impact of weight loss on DVH indices analysed in head and neck organs at risk. It highlights the importance of adaptive radiotherapy in head and neck patients if organ at risk sparing is to be maintained.

A dosimetric retrospective planning study comparing volumetric arc therapy (VMAT) and stereotactic body radiotherapy (SBRT) treatment plans for non-small cell lung cancer (NSCLC)

Purpose A retrospective planning study comparing volumetric arc therapy (VMAT) and stereotactic body radiotherapy (SBRT) treatment plans for non-small cell lung cancer (NSCLC). Methods and materials Five randomly selected early stage lung cancer patients were included in the study. For each patient, four plans were created: the SBRT plan and three VMAT plans using different optimisation methodologies. A total of 20 different plans were evaluated. The dose parameters of dose conformity results and the target dose constraints results were compared for these plans. Results The mean planning target volume (PTV) for all the plans (SBRT and VMAT) was 18·3 cm3, with a range from 15·6 to 20·1 cm3. The maximum dose tolerance to 1 cc of all the plans was within 140% (84 Gy) of the prescribed dose, and 95% of the PTV of all the plans received 100% of the prescribed dose (60 Gy). In all the plans, 99% of the PTV received a dose >90% of the prescribed dose, and the mean dose in all the plans ranged from 67 to 72 Gy. The planning target dose conformity for the SBRT and the VMAT (0°, 15° collimator single arc plans and dual arc) plans showed the tightness of the prescription isodose conformity to the target. Conclusions SBRT and VMAT are radiotherapy approaches that increase doses to small tumour targets without increasing doses to the organs at risk. Although VMAT offers an alternative to SBRT for NSCLC and the potential advantage of VMAT is the reduced treatment times over SBRT, the statistical results show that there was no significant difference between the SBRT and VMAT optimised plans in terms of dose conformity and organ-at-risk sparing.

Determinants of farmer retirement and farm succession in Finland

In the past decade, the Finnish agricultural sector has undergone rapid structural changes. The number of farms has decreased and the average farm size has increased when the number of farms transferred to new entrants has decreased. Part of the structural change in agriculture is manifested in early retirement programmes. In studying farmers exit behaviour in different countries, institutional differences, incentive programmes and constraints are found to matter. In Finland, farmers early retirement programmes were first introduced in 1974 and, during the last ten years, they have been carried out within the European Union framework for these programmes. The early retirement benefits are farmer specific and de-pend on the level of pension insurance the farmer has paid over his active farming years. In order to predict the future development of the agricultural sector, farmers have been frequently asked about their future plans and their plans for succession. However, the plans the farmers made for succession have been found to be time inconsistent. This study estimates the value of farmers stated succession plans in predicting revealed succession decisions. A stated succession plan exists when a farmer answers in a survey questionnaire that the farm is going to be transferred to a new entrant within a five-year period. The succession is revealed when the farm is transferred to a suc-cessor. Stated and revealed behaviour was estimated as a recursive Binomial Probit Model, which accounts for the censoring of the decision variables and controls for a potential correlation between the two equations. The results suggest that the succession plans, as stated by elderly farmers in the questionnaires, do not provide information that is significant and valuable in predicting true, com-pleted successions. Therefore, farmer exit should be analysed based on observed behaviour rather than on stated plans and intentions. As farm retirement plays a crucial role in determining the characteristics of structural change in agriculture, it is important to establish the factors which determine an exit from farming among eld-erly farmers and how off-farm income and income losses affect their exit choices. In this study, the observed choice of pension scheme by elderly farmers was analysed by a bivariate probit model. Despite some variations in significance and the effects of each factor, the ages of the farmer and spouse, the age and number of potential successors, farm size, income loss when retiring and the location of the farm together with the production line were found to be the most important determi-nants of early retirement and the transfer or closure of farms. Recently, the labour status of the spouse has been found to contribute significantly to individual retirement decisions. In this study, the effect of spousal retirement and economic incentives related to the timing of a farming couple s early retirement decision were analysed with a duration model. The results suggest that an expected pension in particular advances farm transfers. It was found that on farms operated by a couple, both early retirement and farm succession took place more often than on farms operated by a single person. However, the existence of a spouse delayed the timing of early retirement. Farming couples were found to co-ordinate their early retirement decisions when they both exit through agricultural retirement programmes, but such a co-ordination did not exist when one of the spouses retired under other pension schemes. Besides changes in the agricultural structure, the share and amount of off-farm income of a farm family s total income has also increased. In the study, the effect of off-farm income on farmers retirement decisions, in addition to other financial factors, was analysed. The unknown parameters were first estimated by a switching-type multivariate probit model and then by the simulated maxi-mum likelihood (SML) method, controlling for farmer specific fixed effects and serial correlation of the errors. The results suggest that elderly farmers off-farm income is a significant determinant in a farmer s choice to exit and close down the farm. However, off-farm income only has a short term effect on structural changes in agriculture since it does not significantly contribute to the timing of farm successions.

Investing in the future: Norway, climate change, and fossil fuel divestment

The fossil fuel divestment movement has undergone explosive growth over the last few years - expanding from encouraging educational institutions to adopt ethical investment policies to focusing upon cities, pension funds and philanthropic charities. The fossil fuel divestment movement has attained global ambitions - challenging sovereign wealth funds and national governments to engage in fossil fuel divestment, and pushing for fossil fuel divestment at international climate talks - such as the Paris Climate Summit in 2015. By exploring and analysing a key campaign to 'Divest Norway', this chapter considers the efforts to globalise and internationalise the fossil fuel divestment campaign. Part 1 explores the origins of the fossil fuel divestment movement, and the application of such strategies in a variety of contexts. Part 2 looks at the campaign to divest Norway's sovereign wealth fund of fossil fuel investments. There has been much discussion as to whether the bold decision of Norway to engage in coal divestment will encourage and inspire other sovereign wealth funds to engage in fossil fuel divestment. The conclusion considers the efforts to introduce fossil fuel divestment as a policy initiative for nation states as a policy option in international climate law.

Climate change, Hans Jonas and indirect investors

This article considers how corporate behaviour in relation to climate change might be reconfigured and the role that indirect investors might play in this reconfiguring. The article suggests that the consequences of climate change are serious enough that indirect investors might be prevailed upon, using a model of behaviour suggested by the work of Hans Jonas, to pressure institutional investors into demanding changes in corporate policy towards climate change. Jonas' work represents a plea for the recognition and acceptance of responsibility in the face of nature's vulnerability and humanity's power over technology. The article suggests that this ethic can be operationalised in relation to corporate governance by building on the changes in the pattern of investment holdings that have taken place in large public companies in the preceding two decades or so. The idea is to appeal to individuals who may perceive themselves as currently being outsiders – or at least only distant stakeholders in relation to the corporation – to realise the responsibility vested in them as beneficiaries through their interest in pension funds, life assurance policies, annuities and other arm's-length financial arrangements with corporations. The hope is that these individuals may, through the influence of a model of responsibility, become active investors and beneficiaries interested in corporate practices that impact on climate change and, encourage others to do likewise.

European Recommendations for Primary Prevention of Congenital Anomalies: A Joined Effort of EUROCAT and EUROPLAN Projects to Facilitate Inclusion of This Topic in the National Rare Disease Plans

Congenital anomalies (CA) are the paradigm example of rare diseases liable to primary prevention actions due to the multifactorial etiology of many of them, involving a number of environmental factors together with genetic predispositions. Yet despite the preventive potential, lack of attention to an integrated preventive strategy has led to the prevalence of CA remaining relatively stable in recent decades. The 2 European projects, EUROCAT and EUROPLAN, have joined efforts to provide the first science-based and comprehensive set of recommendations for the primary prevention of CA in the European Union. The resulting EUROCAT-EUROPLAN 'Recommendations on Policies to Be Considered for the Primary Prevention of Congenital Anomalies in National Plans and Strategies on Rare Diseases' were issued in 2012 and endorsed by EUCERD (European Union Committee of Experts on Rare Diseases) in 2013. The recommendations exploit interdisciplinary expertise encompassing drugs, diet, lifestyles, maternal health status, and the environment. The recommendations include evidence-based actions aimed at reducing risk factors and at increasing protective factors and behaviors at both individual and population level. Moreover, consideration is given to topics specifically related to CA (e.g. folate status, teratogens) as well as of broad public health impact (e.g. obesity, smoking) which call for specific attention to their relevance in the pre- and periconceptional period. The recommendations, reported entirely in this paper, are a comprehensive tool to implement primary prevention into national policies on rare diseases in Europe.