Specifics of national pension plans

Abstract

The main mission of the state as an economic unit is both to create public goods and to satisfy public needs. The states create pension systems, which produce public benefits. Different types of pension benefits as the main form of social transfers are the significant source of households’ cash income. The research aimed to identify features of national pension systems could elaborate recommendations in order to increase the efficiency of their functioning. In the paper we analyze the results of functioning of national pension systems, the level of pension provision in several countries, the dynamics and the relationship between indicators, characterizing pension systems in these countries. We found that in classical context both distribution and funded pension arrangements do not work in any considered country; The distribution and prefunding elements of pensions arrangements are combined in each of them. Advantages and disadvantages of analyzed national pension systems evolve in different periods of development of the national economy and society. In modern conditions the national pension systems are under heavy transformation. Pension reforms are aimed at creating a mechanism, which would adequately and timely respond to the economic, demographic, social and other problems that interfere with the normal functioning of the pension system. The level of pension provision characterizes, in particular, the dynamics of such statistics as insurance premiums, i.e. the amount of contributions to the state pension fund and their share in GDP, public spending on pensions and their share in GDP. Analysis of the dynamics of these indicators for the 2004–2014 allowed us to identify the main trends in the functioning of some national pension systems. The obtained results could be helpful to elaborate recommendations in order to improve performance of national pension systems. Refs 29. Figs 2. Tables 7.