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ABSTRACT
Worldwide, pension funds face a series of difficulties due to the decrease of the dependence rate, as a result of the ageing phenomenon of the population, correlated with a decreasing birth rate. The present study aims at analysing to what extent the economic and social policies in Romania are able to counteract the difficulties of public pensions. Hence, we shall focus on the alternative of private pension funds, pillar II, as the main complement of public pensions in Romania, in order to ascertain whether a causality relation tends to occur on short-and-long term between one time series to another. The series of data consist of the total net assets and the weighted average rate of return for privately managed pension funds, for the period June 2010 - May 2015. Thus, we have applied the VAR/VEC estimation method, processed in the EViews program. Following our empirical research, the results obtained indicate that, at this moment, there is a causal relationship between net assets value and the weighted average rate of return in only one way: the return variable has a long causality on net assets. For a short horizon of time, if all circumstances are maintained, the forecast of the variables indicates that, whenever assets register a decreasing trend (due to government intervention), the weighted average rate of return follows an increasing trend (in relative terms). Long-term social policies are required to be applied in Romania, in order to mitigate the difficulties of the pension system and, furthermore to avoid the nationalization or the reduction of the second component of private pension funds.
KEY WORDS: ageing population phenomenon, pension difficulties, private pension, social policies, VAR/VEC methodology
Introduction
At a worldwide level, demographic studies show that the ageing of the population has become a major problem affecting the viability and sustainability of the pension schemes, influencing, at the same time, the efficiency of public policies in the social and economic fields. The direct effects of the population ageing process consist in a value decrease of contributions to the social insurances assigned to the payment of public pensions, as a result of the reduction of the number of contributors and the increase of the expenses with the public pensions and, also, as a result of the...