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Challenge 3
Challenge 3

... Reshape spending - Pensions 1. Pension reform advanced in RS, while stalled in FBH (complete overhaul needed) 2. Introduce strict curbs on early retirement. 3. Establish actuarial pension reductions for those who do retire early. 4. Eliminate double-dipping between war-related benefits and pension f ...
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... • Economic growth - stable but – because of high energy prices • Budget surplus kept but promises are increasing • Rising inflation – 9% (2006), 11.9% (2007), 14-15% (expected in 2008) • Inequality – still high, growing? • Official poverty rates – 2 times less • Unemployment – moderate decline (5.3% ...
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... • Thousands of jobs have been lost under conditions of insufficient social protection. • The unemployment rate, at 25%, is still high despite a moderate decline since 2013 (OECD) • More than half of the population aged up to 24 years old is unemployed. • Given the continuation of the crisis, the new ...
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... There are two classes of contributions: class one paid by employed persons and class two paid by selfemployed. Maximum earning amount to be used for pension calculation was 16,601 Euros in 2008; however this cap is set to be progressively increased in the future as a result of 2006 pension reforms. ...
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... In China today, firms pay a payroll tax rate of around 20 percent and workers pay a tax rate of around 8 percent to finance the pension portion of the Social Security system. This combined rate of 28 percent is much higher than the rate in most other countries and is a major barrier to the successfu ...
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...  Assets in ESPP, social security and individual saving plans are very significant  As assets in these funds grew sharply beginning in about 1987-90s, they have had a substantial influence on capital markets – both growth and fluctuations  As these funds are drawn down by retirees over the years t ...
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Pensions crisis

The pensions crisis is a predicted difficulty in paying for corporate, state, and federal pensions in the United States and Europe, due to a difference between pension obligations and the resources set aside to fund them. Shifting demographics are causing a lower ratio of workers per retiree; contributing factors include retirees living longer (increasing the relative number of retirees), and lower birth rates (decreasing the relative number of workers, especially relative to the Post-WW2 Baby Boom). There is significant debate regarding the magnitude and importance of the problem, as well as the solutions.For example, as of 2008, the estimates for the underfunding of U.S. states' pension programs range from $1 trillion using the discount rate of 8% to $3.23 trillion using U.S. Treasury bond yields as the discount rate. The present value of unfunded obligations under Social Security as of August 2010 was approximately $5.4 trillion. In other words, this amount would have to be set aside today such that the principal and interest would cover the program's shortfall between tax revenues and payouts over the next 75 years.Some economists question the concept of funding, and, therefore underfunding. Storing funds by governments, in the form of fiat currencies, is the functional equivalent of storing a collection of their own IOUs. They will be equally inflationary to newly written ones when they do come to be used.Reform ideas are in three primary categories: a) Addressing the worker-retiree ratio, via raising the retirement age, employment policy and immigration policy; b) Reducing obligations via shifting from defined benefit to defined contribution pension types and reducing future payment amounts (by, for example, adjusting the formula that determines the level of benefits); and c) Increasing resources to fund pensions via increasing contribution rates and raising taxes.
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