Economia
A questão da previdência e' de fato um assunto serio, que vem sendo analisado com a devida acuidade técnica em diversos paises. A Inglaterra vem promovendo debates sobre este doloroso tema, que remete para a complexa discussão sobre justiça intergeracional. Ha diversos posts neste blog remetendo para este assunto. Segue mais uma analise para a devida apreciação. Afinal, um dia a sociedade brasileira também terá de parar para discuti-lo.
Harsh choices
Oct 14th 2004
From The Economist print edition
A major shake-up in British pensions is coming—but not until after the election
http://www.economist.com/world/europe/displayStory.cfm?story_id=3291534
DENIAL is government's first response when pensions policy goes wrong. The Labour government has been no exception to this rule. But a landmark report this week from the government-appointed Pensions Commission has made denial impossible. Labour will put off difficult decisions until after the election expected in May next year. But a third-term Labour government will have to undertake painful reforms.
The report sets out inescapable choices that must be made as Britain, like other developed countries, confronts a rapidly ageing population. At present, 10% of GDP is transferred to pensioners. This will have to rise (see chart 1) by 2050 to 15% if future pensioners are to enjoy the same living standards in relation to average income; if it stays at 10%, their relative living standards will drop by a third. If the state funds the whole increase, it will need higher taxes equivalent to £57 billion ($102 billion) in today's money. The alternatives are a dramatic increase in income from funded pensions, or else the average retirement age—when people quit work, not when they become entitled to state pensions—must rise from 63 to 70.
The commission expects that income from funded pensions to people over 65 will rise by around 1% of GDP by 2050. And the government has already conceded the need for some increase in state spending on pensioners. Including housing-related and disability benefits as well as pensions and the pension credit, this will rise from 6.1% of GDP today to 6.9% in 2050. But even with these assumptions, which include a tax rise of nearly 1% of GDP, there remains a gap of 3% of GDP. A failure to plug it would leave pensioners' relative living standards 21% lower in 2050 than today. Alternatively, the average retirement age will have to rise to 67.
But serious difficulties will emerge long before 2050. Between 2010 and 2020, some help will come from the rise in the women's state pension age from 60 to 65, the same as for men now. The commission expects this will raise the average age of retirement for women from 61.6 to 63.8, the current male average. But Adair Turner, the commission's chairman, gave warning when presenting its report on October 12th that “the big problem” on current trends and policies will emerge in the 2020s. That is when there will be especially big increases in the number of pensioners, reflecting high birth rates in the late 1950s and early 1960s.
This demographic challenge should come as no real surprise, even allowing for unexpectedly rapid increases in longevity. Until recently, Britain's distinctive approach to pensions—a partnership between the state and the private sector—was expected to deal with this change more effectively than most other developed countries. This partnership, mainly with private employers, allows the state to provide no more than a basic income for pensioners, representing a much smaller proportion of average earnings for most retired people than in America or European countries like France (see chart 2). Altogether, state benefits account for about 60% of pensioner income, with the remaining 40% coming from private provision.
The Labour government was so confident that this system was working that in 1998 it declared its ambition to switch these shares by 2050 to 40% from the state and 60% from private provision. Its plan has been to concentrate state benefits more on lower earners, leaving everyone else even more reliant on private provision. However, the commission says that the state's share will stay at 60%, because the private sector is in a mess. Rather than expanding to fill the gap left by the state, the report says, “Britain's funded private pension system is in serious decline.”
The biggest setback has been in private defined-benefit schemes, which pay pensions linked to years of service and final salaries. Employers have responded to falling stockmarkets and ballooning pension liabilities by closing these schemes to new members. The decline has been startling. In 1995, there were 5m people in open private-sector schemes, now there are only 2m. Instead, new employees join defined-contribution schemes, which are much less generously funded. The commission estimates that the impact of this shift alone will result in a decline in private-pension saving of 1% of GDP.
As private employers reduce their commitment to funding pensions, individuals should do more for themselves. But the take-up of low-charge “stakeholder” pensions has been disappointing. And the government's means-tested pension credit, designed to help today's pensioners, makes saving for many workers on moderate incomes a foolish idea. Through the withdrawal of the pension credit for every extra pound of savings income they can incur marginal tax rates of at least 40%. “The long-term effect of the pension credit will be very damaging to incentives to save,” says Mark Pearson, head of social policy at the OECD.
So the state is providing less for most workers and the private sector is failing to pick up the slack. The result will be inadequate pensions for many people. The commission estimates that 9.6m workers aged over 35—that is 60% of all those in work over that age—are not saving enough. Of those aged over 25 some 12m are under-saving. Those affected are not just the usual categories like part-timers and the self-employed. The deterioration in private pension savings is hurting the retirement prospects of middle-income earners—“the same group most affected by the planned reduction in the generosity of state pension provision”, according to the report.
The fears of middle England about retirement security make pensions a politically charged issue. Yet big changes must happen. The commission lays out three ways forward. One is to reinvigorate the present system, which will require radical rather than incremental changes. A second is to rebuild the state pension, which will be very expensive. A third is to introduce a large-scale compulsory saving programme for workers, following a path blazed by Australia in the 1990s.
In an ideal world, that would frame a debate about pension policy in the upcoming election campaign. But the government will wait for the commission's recommendations, due in a year's time. The opposition parties favour rebuilding the state pension—in effect passing the cost of Britain's ageing population on to tomorrow's taxpayers. Compulsory saving, by contrast, loads the cost on to today's workers, in effect with an extra tax. No political party wants to be the first to say that the state pension age must rise, even though this is the surest way of making all the sums add up.
This is ominous. Constant changes have bred complexity, confusion and apathy. As Mr Pearson says, “no one who is more than 15 years away from retirement can have any confidence in what the state is going to provide.” Mr Turner's report has already been compared with that of William Beveridge in 1942, the founding charter of the post-war welfare state. But to put pensions on a more solid footing, the report will require politicians who rise to the challenge that it sets for the 21st century.
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Economia
A questão da previdência e' de fato um assunto serio, que vem sendo analisado com a devida acuidade técnica em diversos paises. A Inglaterra vem promovendo debates sobre este doloroso tema, que remete para a complexa discussão sobre justiça intergeracional. Ha diversos posts neste blog remetendo para este assunto. Segue mais uma analise para a devida apreciação. Afinal, um dia a sociedade brasileira também terá de parar para discuti-lo.
Harsh choices
Oct 14th 2004
From The Economist print edition
A major shake-up in British pensions is coming—but not until after the election
http://www.economist.com/world/europe/displayStory.cfm?story_id=3291534
DENIAL is government's first response when pensions policy goes wrong. The Labour government has been no exception to this rule. But a landmark report this week from the government-appointed Pensions Commission has made denial impossible. Labour will put off difficult decisions until after the election expected in May next year. But a third-term Labour government will have to undertake painful reforms.
The report sets out inescapable choices that must be made as Britain, like other developed countries, confronts a rapidly ageing population. At present, 10% of GDP is transferred to pensioners. This will have to rise (see chart 1) by 2050 to 15% if future pensioners are to enjoy the same living standards in relation to average income; if it stays at 10%, their relative living standards will drop by a third. If the state funds the whole increase, it will need higher taxes equivalent to £57 billion ($102 billion) in today's money. The alternatives are a dramatic increase in income from funded pensions, or else the average retirement age—when people quit work, not when they become entitled to state pensions—must rise from 63 to 70.
The commission expects that income from funded pensions to people over 65 will rise by around 1% of GDP by 2050. And the government has already conceded the need for some increase in state spending on pensioners. Including housing-related and disability benefits as well as pensions and the pension credit, this will rise from 6.1% of GDP today to 6.9% in 2050. But even with these assumptions, which include a tax rise of nearly 1% of GDP, there remains a gap of 3% of GDP. A failure to plug it would leave pensioners' relative living standards 21% lower in 2050 than today. Alternatively, the average retirement age will have to rise to 67.
But serious difficulties will emerge long before 2050. Between 2010 and 2020, some help will come from the rise in the women's state pension age from 60 to 65, the same as for men now. The commission expects this will raise the average age of retirement for women from 61.6 to 63.8, the current male average. But Adair Turner, the commission's chairman, gave warning when presenting its report on October 12th that “the big problem” on current trends and policies will emerge in the 2020s. That is when there will be especially big increases in the number of pensioners, reflecting high birth rates in the late 1950s and early 1960s.
This demographic challenge should come as no real surprise, even allowing for unexpectedly rapid increases in longevity. Until recently, Britain's distinctive approach to pensions—a partnership between the state and the private sector—was expected to deal with this change more effectively than most other developed countries. This partnership, mainly with private employers, allows the state to provide no more than a basic income for pensioners, representing a much smaller proportion of average earnings for most retired people than in America or European countries like France (see chart 2). Altogether, state benefits account for about 60% of pensioner income, with the remaining 40% coming from private provision.
The Labour government was so confident that this system was working that in 1998 it declared its ambition to switch these shares by 2050 to 40% from the state and 60% from private provision. Its plan has been to concentrate state benefits more on lower earners, leaving everyone else even more reliant on private provision. However, the commission says that the state's share will stay at 60%, because the private sector is in a mess. Rather than expanding to fill the gap left by the state, the report says, “Britain's funded private pension system is in serious decline.”
The biggest setback has been in private defined-benefit schemes, which pay pensions linked to years of service and final salaries. Employers have responded to falling stockmarkets and ballooning pension liabilities by closing these schemes to new members. The decline has been startling. In 1995, there were 5m people in open private-sector schemes, now there are only 2m. Instead, new employees join defined-contribution schemes, which are much less generously funded. The commission estimates that the impact of this shift alone will result in a decline in private-pension saving of 1% of GDP.
As private employers reduce their commitment to funding pensions, individuals should do more for themselves. But the take-up of low-charge “stakeholder” pensions has been disappointing. And the government's means-tested pension credit, designed to help today's pensioners, makes saving for many workers on moderate incomes a foolish idea. Through the withdrawal of the pension credit for every extra pound of savings income they can incur marginal tax rates of at least 40%. “The long-term effect of the pension credit will be very damaging to incentives to save,” says Mark Pearson, head of social policy at the OECD.
So the state is providing less for most workers and the private sector is failing to pick up the slack. The result will be inadequate pensions for many people. The commission estimates that 9.6m workers aged over 35—that is 60% of all those in work over that age—are not saving enough. Of those aged over 25 some 12m are under-saving. Those affected are not just the usual categories like part-timers and the self-employed. The deterioration in private pension savings is hurting the retirement prospects of middle-income earners—“the same group most affected by the planned reduction in the generosity of state pension provision”, according to the report.
The fears of middle England about retirement security make pensions a politically charged issue. Yet big changes must happen. The commission lays out three ways forward. One is to reinvigorate the present system, which will require radical rather than incremental changes. A second is to rebuild the state pension, which will be very expensive. A third is to introduce a large-scale compulsory saving programme for workers, following a path blazed by Australia in the 1990s.
In an ideal world, that would frame a debate about pension policy in the upcoming election campaign. But the government will wait for the commission's recommendations, due in a year's time. The opposition parties favour rebuilding the state pension—in effect passing the cost of Britain's ageing population on to tomorrow's taxpayers. Compulsory saving, by contrast, loads the cost on to today's workers, in effect with an extra tax. No political party wants to be the first to say that the state pension age must rise, even though this is the surest way of making all the sums add up.
This is ominous. Constant changes have bred complexity, confusion and apathy. As Mr Pearson says, “no one who is more than 15 years away from retirement can have any confidence in what the state is going to provide.” Mr Turner's report has already been compared with that of William Beveridge in 1942, the founding charter of the post-war welfare state. But to put pensions on a more solid footing, the report will require politicians who rise to the challenge that it sets for the 21st century.
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- O Neoliberalismo é Uma Ficçaõ
This is not a neoliberal age. This is an age of hyper-statism, where the state has far more control over our lives than it should do. Think that by buying yet another anti-capitalist tome means you're somehow "thinking outside the box"?...
- Previdência
— BRAZIL: Brazil is ranked second-best of 20 countries evaluated by the Center for Strategic and International Studies for maintaining retirees' incomes. But it's only No. 18 in its ability to pay for its retirement system over the long term....
- Previdência Brasileira - Uma Bancarotta Programada
Brazil’s pension system The EconomistIn a young country, a pay-as-you-go system should yield surpluses, which can be invested in infrastructure and education. But Brazil’s is already in deficit. Investment is only about 20% of GDP, and just 2.9%...
- O Grande Desafio Para O Brasil: Reforma Da Previdência
THE ECONOMIST explica: Uniquely among large economies, Brazil is a young country with the pensions bill of an old one (see chart). It has just ten over-65s for every hundred 15- to 64-year-olds, fewer than anywhere in the G7. And yet it spends 13% of...
- Potencial De Crescimento Econômico Do Brasil Em Dúvida
Brazil, Country of the Future No More?Andrés VelascoSANTIAGO – During a visit to Rio de Janeiro last year, US President Barack Obama told a cheering crowd that Brazil is the country of the future no more. “For so long, you were...told to wait for...