Public Pensions and Implicit Debt: An Investigation for EU Member States Using Ageing Working Group 2021 Projections

Abstract

Ιmplicit pension debt is attracting increasing attention worldwide as a driver of fiscal dynamics, operating in parallel to the (explicit) National Debt. A prudent examination of a state’s fiscal prospects should ideally encompass both, with due attention paid to the special features of each kind of debt. The explosion of government deficits as a result of the COVID-19 pandemic only adds to the urgency of understanding the scale and nature of issues around accounting for contingent liabilities. The reports of the EU Ageing working group, produced and published every three years are used to derive estimates of the stock of outstanding implicit pension debt from flows of projected deficits. This can be performed for all European member states. This paper uses the last two rounds of the Ageing Report (2021, 2018) and derives conclusions on the evolution of pension debt and its correlation to the external debt. The paper concludes that producing comparable estimates of IPD should become an important input in EU policy discussion.

Risk Contagion of Local Government Implicit Debt Integrating Complex Network and Multi-Subject Coordination

“…Local government implicit debt is a debt generated when local governments promise to pay a certain amount in the future [13]. Local government implicit debt is mainly used for construction in the field of livelihood services, consumption caused by pension gaps, contingent default compensation responsibilities assumed by a government in policy financing guarantee business, and extra-budgetary debt responsibilities incurred in response to occasional events [1,31]. So, these debts have the characteristics of strong livelihood, low profitability, long periodicity, and high uncertainty and are greatly influenced by policies and economic situations [2].…”

“…To effectively protect people's livelihood and promote sustainable growth of the local economy, local governments at all levels obtain implicit debt funds with government credit as a guarantee, and its scale shows a trend of rapid growth [1,2]. However, with the intensification of international instability and the impact of sudden major health events, coupled with the global economic downturn, local government implicit debt is facing enormous repayment pressure, causing a local government's implicit debt risk to continue to gather.…”

Presente e futuro dos sistemas de pensão pelo mundo: um estudo bibliométrico a partir do termo de pesquisa “pension”

“…Países como França, Inglaterra, Espanha, Alemanha, Itália, Brasil, Japão entre muitos outros têm como origem sistemas de aposentadorias totalmente geridos pelo setor público. Esses sistemas podem ser por repartição simples, quando os valores arrecadados dos trabalhadores ativos na economia contribuem para o suporte das aposentadorias dos trabalhadores inativos (Geri et al, 2019;Ortiz et al, 2019;Medeiros & Souza, 2014;Rangel & Saboia, 2015;Symeonidis et al, 2021). Uma segunda estrutura possível é quando os valores arrecadados são acumulados para o pagamento das aposentadorias futuras, mantendo-se um equilíbrio atuarial entre os valores arrecadados e a projeção de desembolsos futuros (CalixtoRodriguez, 2019;Rangel & Saboia, 2015;Wang & Peng, 2014).…”

“…Um desse problemas e que parece ser o mais grave, aponta para a existência de uma dívida previdenciária implícita em quase todos os países pelo mundo (Symeonidis;Tinios & Chouzouris, 2021).…”

“…Toda essa configuração de pensões baseadas em sistemas de repartição simples, criou um passivo para os governos e em consequência para a sociedade que impede que esses países garantam o mínimo de segurança econômica para a sua população mais idosa (Leifeld, 2013;Ortiz et al, 2019;Symeonidis et al, 2021). Além dessa questão, distorções dentro dos sistemas de pesões em muitos países tornam o problema ainda maior.…”