Report on the OECD/ABS pension workshop 22 – 24 April ABS House Canberra, Australia
Pension Workshop Outcomes • SNA Table 17.10 and proposed table 17.xx • Conceptual recommendations for AEG and research agenda • Actuarial considerations and data sources
2008SNA Included a supplementary table on pension liabilities, Table 17.10
Table 17.10 The workshop confirmed that SNA Table 17.10 included liabilities related to (a) employment related pension funds,plus the following two elements if they are not included in the core accounts:(b) government employee defined benefit schemes, and (c) social security pension schemes.
The view at the workshop was that Table 17.10 represents well a full articulation of Government liabilities pertaining to retirement, with one exception - Social Assistance Schemes. Additionally the view of a number of participants was that there is another data need that exists. This is the need users have to understand the ‘preparedness’ of households for retirement. This need is not met by the core accounts or Table 17.10 and so the workshop proposed an additional analytical table, Table 17.xx, be developed.
An important method of assistance provided by government in NZ, Australia, Canada and the USA is ‘social assistance’. Social assistance is not provided as part of a participatory social insurance arrangement and so does not meet the test for inclusion within ‘Social security’ as defined by the SNA (17.90). Unlike schemes of many other countries, workers do not contribute to a pension or insurance, and the payment is available to all (subject to means testing).
Additionally there are liabilities/assets important to informing the issue of funding retirement that are not in Table 17.10 • Retirement savings accounts of individuals that were encouraged by tax concessions, and • Life insurance annuities, similarly encouraged by government. • It was noted that such assets can be expressed as liabilities of the institutions offering such products as well as assets of households.
The workshop decided to develop a table which would expand upon the 17.10 articulation with the additional elements described. A draft table 17.xx, tentatively titled “Household Retirement Resources” has been developed for comment and details are still being discussed. The identified purpose of Table 17.xx is to articulate resources available to households which are explicitly connected to retirement. It is designed to inform the important debate (particularly in the context of aging populations) on the preparedness of households for retirement.
Conceptual recommendations • SNA does not include property income accruing on the stocks imputed for underfunded defined benefit schemes. The workshop recommends it be calculated. • The treatment of capital gains as income needs to be on the research agenda. There is some confusion over the reading and intent of the SNA, as well as a conceptual discussion to be had.
Actuarial considerations and data sources • The workshop discussed the role of statistical agencies in undertaking the necessary actuarial calculations, making and reviewing the underlying assumptions. The use of estimates provided by actuaries was supported as best practice. • The workshop noted that typically the data sources relating to government were the most deficient. It was noted that the review of GFS standards goes someway to addressing this issue, and that it is important for statistical agencies to support and implement the standards.
AEG • AEG is asked to support the recommendations of the workshop. • AEG notes that more work is needed on criteria for the inclusion of assets/liabilities in the new table.