September 2023

Net zero and ageing populations risk higher taxes, warns City bank

The transition to net zero and pressures from ageing populations risk pushing up the tax burden, a City bank has warned. Analysts at BNP Paribas, a French multinational bank, said that spending demands from several economic shifts meant states would likely be permanently bigger. As a result, Marcelo Carvalho, the global head of economics, said: “I think it’s very unlikely that the tax burden is going to go down meaningfully anywhere in the world. “It’s more likely that it either stays where...

South Korea. Urgent pension reform

One of the problems modern welfare states must tackle is defusing the pension time bomb. And nowhere is this more urgent than in Korea, with the fastest aging population and steepest decline in birth rate worldwide. Moreover, thanks to accumulated funds, Korean retirees receive considerably more than they contributed. It contrasts with the pay-as-you-go-type schemes of some countries. That cannot go on because of the nation's demographic structure. Someone must persuade Koreans to get less ― or at least not more ―...

México. Presupuesto 2024 prevé alza de 25% a pensiones

Este viernes, la Secretaría de Hacienda entregará a la Cámara de Diputados el Presupuesto de Egresos de la Federación (PEF) 2024, donde se contempla un aumento de 25 por ciento a las pensiones de los adultos mayores, así como recursos para las grandes obras como el Tren Transístmico, el aeropuerto de Tulum y la red hidráulica, anticipó el Presidente Andrés Manuel López Obrador. El paquete económico, que tendrá una orientación social importante, contempla un gasto superior a 8.4 billones de...

US. Traditional pension plans are pretty rare. But here’s who still has them and how they work

The phrase “pension benefits” may come up a lot in the next several days as negotiations between the United Auto Workers union and the Big Three automakers go down to the wire to avert a strike. But for most private-sector US workers, pensions disappeared long ago. In a traditional pension, employers contribute, invest and manage retirement funds for their workers, who then receive guaranteed monthly checks for life after they retire. But over the past several decades, employers have either...

UK. Triple lock could add £45bn a year to state pensions bill by 2050, IFS says

Maintaining the triple lock on state pensions could add as much as £45bn a year to the welfare bill by 2050, putting “insurmountable pressure” on the government to increase the minimum retirement age, according to the Institute for Fiscal Studies. In a report published ahead of the release next week of official data for earnings growth, which will be used to set the annual increase in pensions, the IFS estimates spending on retirees could rise by a further £2bn from...

Japan’s pension funds to increase allocations to active fixed income

As the Bank of Japan loosens its stranglehold on yields, opening the door for them to rise in a more volatile market environment, Japanese pension funds have started to recognize the merits of actively investing their Japanese fixed-income portfolio, sources said. For instance, the Government Pension Investment Fund, Tokyo, revealed in its annual report in July that it would shift an in-house ¥9.1 trillion ($62 billion) passive domestic bond fund to be actively managed. "The decision to shift the in-house domestic...

Pensiones: menos participación pública, más responsabilidad individual

Este subsidio puede llegar a ser equivalente a un salario mínimo para todo aquel que devengue más de tres salarios mínimos y cumpla con los requisitos para obtener una pensión. Toda esta discusión lleva al efecto que tendría la reducción del umbral a partir del cual se comienza a cotizar al componente complementario de ahorro individual. Por un lado, disminuiría el subsidio implícito para quienes devengan más de tres salarios mínimos. Esto sería positivo en términos de progresividad y sostenibilidad...

Pobreza, cambio climático y protección social

Un estudio de la Comisión Económica para América Latina y el Caribe (CEPAL, 2022) revela que la pandemia del covid-19 empujó a cerca de 20 millones de personas a la pobreza extrema, lo que generó un retroceso de 13 años. Así también, otro estudio del Banco Interamericano de Desarrollo (BID, 2022) afirma que los niveles de pobreza en América Latina y el Caribe (ALyC) aumentaron con la inflación global por la guerra entre Rusia y Ucrania, temiéndose que otros 10...

Perú. Propuesta para eliminar a las AFP y devolver el 100% de los aportes: ¿de qué se trata?

A puertas de retomar la discusión sobre la reforma de pensiones, el congresista Américo Gonza, de la bancada Perú Libre, ha presentado una propuesta drástica: eliminar el sistema privado creado por el Decreto Ley 25897, que está conformado por cuatro Administradoras Privadas de Fondos de Pensiones (AFP). Estas son AFP Integra —que agrupa a la mayor cantidad de afiliados—, Prima Profuturo, Prima AFP y AFP Habitat. Las razones detrás de la propuesta de eliminación de AFPs De acuerdo a la iniciativa, uno de los principales factores es que las AFP cobran...

US. Washington taking aim at pension risk transfer market, but is anything broken?

The U.S. pension risk transfer market is booming as more companies look to shed their pension liabilities, but changes to the rules governing such transactions could be coming, which is making some stakeholders nervous. "What I worry about is that we see something proposed that disrupts the system that's working well," said Kent A. Mason, a Washington-based partner at law firm Davis & Harman LLP and outside counsel for the American Benefits Council. "To me, where do you go from the...