What are the factors associated with the superannuation
Retirement age: the time when people reap the fruits of contributions made to a social security system.Contribution time: period of time during which contributions are made, is a direct consequence of age and contribution density. Family structure of the retiree: the number of retired economic dependents and their ages influence the level of the replacement rate (pension as a proportion of the last salary), as these factors determine the cost of the survival insurance, which will provide a pension To their relatives in the event of death of the retiree (Carmichael, 2016).
-How do the returns obtained by the employees contribute to the formation of social security?
Pension savings are exposed to inflation during the accumulation period; It is for this reason that the real yield that the resources obtains during this period is of vital importance.
There are many factors that influence the amount of a pension; However variables such as the level of contributions and the density of contribution, surpass the scope of the pension system, and it is necessary that they are analyzed by the society as a whole.
Faced with this challenge, it is fundamental to continue promoting the culture of social security savings and to take advantage of the voluntary savings and tax benefits options available to the Australian pension system, so that the worker can begin today to increase, in the As much as possible, the amount of resources accumulated in your individual account with the aim of having a better pension at the time of retirement (Chan-Lau, 2004).
1) Start date of contributions and contribution gaps
If we have accessed the work activity late and / or we have had gaps of quotation the problem will arise because we will not reach the period of contribution sufficient to obtain 100% of the average of the last quotes.
The contribution gaps will generally arise in people who have lost their jobs and exhausted the unemployment benefit, remain in that situation, will no longer be in a situation comparable to the high, and this in turn will have a lower contribution time.
The longer they are outside the labor market, the shorter the contribution time, which will make it difficult to be entitled to 100% of the percentage to be applied on the average of the last quotations.
2) Labor changes
In times of economic boom, labor changes are usually achieved through professional and economic promotion (Davis, 2014).
But when the change is in times of crisis, it is very probable that the change is due to a loss of work and the reintegration carries with it a job of lesser remuneration. This situation implies a lower level of contribution. When we join the professional world as self-employed with the minimum contribution base, we will probably get a lower level of contribution than our previous job.
This situation will be aggravated if all this happens at an age in which we are already within the last 25 working years. This is from 40 or 42 years. The longer we stay in this situation, the lower the future retirement pension (Davis, 2014).
3) Average number of years of the last quotations
Until the last reform of 2011, the last 15 years of work were taken into account. Currently, it has risen to the last 25 years. Extending the observation period will generally affect negatively. It is necessary to consider that the younger we are our labor situation is of less evolution and therefore of less income, and in turn smaller contributions.
For this reason, the more years are taken into account, the lower contribution bases we will be adding and the greater the loss of income between our current state and retirement. The problem can be aggravated by future reforms of the Social Security system. If the observation period increases even more, and the 25 (Davis, 2014).
4) Number of years quoted to Social Security
The minimum number of years quoted to qualify for the Social Security pension is 15 years and this entitles a 50 % Of the average of quotations. To be entitled to 100%, until the reform of the year 2011, it was necessary 35 years, and with the reform although it is progressively, 100% will be achieved with 37 years quoted. The problem itself Is not due to the increase of these two years of longer trading time, but because the intermediate percentages for periods between 15 and 37 years are reduced from what previously occurred between 15 and 35. With the same years, Lower percentage in intermediate situations than before the reform (Lorie and Hamilton, 1978) .
5) Sustainability factor
It was approved at the end of 2013 and will, as life expectancy evolves, reduce the amount of the pension from 2019 onwards. Those who retire in the years to 2019 will notice little the application of this criterion, but the more we move away in time, the more it will influence the loss of income. And this entire How does it affect us? We do not have to be alarmist, probably everything explained will not always affect us in all cases, but we have to consider it and be consistent (Pride, 2017). Especially analyze in each person how it influences to be able to later estimate the necessary complement to realize. Counseling by specialists in social welfare will help us, given that we can independently find answers to our uncertainties and seek professional solutions, capacity, death and prolonged life are the three concerns of risks that we humans have. These can cause us unfortunate events in our lives that affect our economy.
Personality is defined and forged along the experience of a set of experiences of socialization and the social roles that a person develops in his life, even in the retirement stage.
Retirement Phase: This phase can be lived in three different ways depending on the person and other factors. You can also move from one way of living retirement to the other over time:
Phase of reorientation: this phase only occurs in those people who have been depressed. The depressed person goes through a process of reevaluation and builds more realistic perceptions regarding their retirement experience.
What is the main difference between an individual account pension system and a pay-as-you-go system?
The financial and actuarial principle on which a retirement savings system based on individual accounts is developed is the financing of the pension. This means in general terms that each person pays for his or her own retirement, thus eliminating the problems associated with contributions to a pay-as-you-go system, where the pensions of people of retirement age are financed in greater proportion by younger generations (Lorie and Hamilton, 1978).
What determines the amount of the pension in a system of individual accounts?
The level of benefits granted by a pension system is determined by variables that influence the accumulation of retirement assets, as well as economic, demographic and political considerations that could have an impact on retirement.
-What factors determine the resources saved for retirement?
The contributions made to the individual account constitute a variable of great importance in the formation of pension savings. It should be mentioned that the current level of contributions in Mexico (6.5% of the Base Salary of Contribution), is among one of the lowest in the world.
In addition, periods of unemployment or time worked in another sector of the economy (labor mobility), have an impact on the number of contributions that a worker makes in his individual account over a year, that concept is known as "density Of quotation
2.Efficient Market Hypothesis in Pension fund
Financial Economic Glossary Letter H Efficient Market Hypothesis
Within the efficient market theory, three hypotheses are distinguished, depending on what is understood by available information:
Weak. Prices incorporate the information derived from the historical evolution of quotations and volumes. Therefore, by analyzing the patterns followed by the quotations in the past, no rule can be derived to obtain extraordinary benefits. It is a concept close to that used by technical analysis.
Semifred (Murphy, n.d.). The prices incorporate all available public information. That is to say, prices do not only include information referring to volumes and prices, but also to their fundamentals (growth in results, financial situation, competitive situation) This is the concept close to that used by the analysis fundamental.
Strong. The prices incorporate all the information concerning a company, including the non public or privileged.
Investments are subject to market fluctuations and other risks inherent in investing in securities and other financial instruments, so that the acquisition value and the returns may experience both upward and downward variations and the investor may not Recover the amount invested
Do you have any influence on the selection of these products?
We decide the time when we introduce funds into the portfolios of our Choice products and the level of exposure we want to have to those funds. They select the products that they consider will be better adapted to our expectations of profitability and risk. We work as a team.
How many professionals are involved in the management of profiles?
In the team we are six people, three of which are dedicated exclusively to funds and two to portfolios, although, practically, the whole manager is involved in the management since the decision-making process is shared between the top down analysis and the Bottom up From the macro scenario and with the vision of profitability and risk of the assets for each scenario we determine the basic structure on which we build the portfolios. In addition, both the direct assets and the funds that we have is very supported in the specialists of the manager and we have the fundamental work of assembling all the pieces in the framework that is the fund, maximizing the expected returns according to the risk budget And our opinions on the markets(Murphy, n.d.).
Which investment vehicle has made the most part of the portfolio?
The truth is that the backbone of the portfolios has a vocation of permanence and perhaps there is an asset that stands out over another, since we have long positions in bonds, funds and ETF. We have no preference for any vehicle, we choose the asset that is most efficient in each case to take positions implementing our market visions, sometimes with pure assets, others with derivatives, others with funds from third parties and others with ETF.
What position has been the best result in the last year?
In the last year, investments in currency have been the most profitable have contributed to our portfolios also taking into account their contribution to risk.
What is the ideal number of funds that a portfolio should make to make it diversified?
To eliminate idiosyncratic risk and stay pure market risk, the recommended diversification requires a minimum of between fifteen and twenty assets or securities for each class of asset. Logically, the amount of the same is a fundamental factor but with the volume that we are managing the number will depend on the amount that we devote to each asset class, taking into account that the investments by asset class are constructed with a combination of many investment instruments, Not just funds. To give an example, the American variable invested in funds we are doing with five funds and in contrast the Japanese with no more than two funds.
Who selects the funds you put into the fund portfolio?
The selection of the funds that are part of our portfolios is done by the fund management team based on our vision of asset allocation and the profitability / risk objectives that we set. From there we select funds that have a proven track record based on a series of criteria and look for funds whose managers do what they say they do. We do not like ex-post surprises (Pride, 2017).
Advantages of Discretionary Portfolio Management
Professional management: Your investments will be managed by professionals with extensive knowledge of the markets, which will give you agility in management and a quick response to market events.
Optimization of the profitability-risk according to its investor profile: Through the Test of Suitability will identify its profile of risk and will determine the level of maximum exposure to variable that must have its portfolio.
Carmichael, I. (2016). Pension Power. Toronto: University of Toronto Press.
Chan-Lau, J. (2004). Pension funds and emerging markets. [Washington D.C.]: International Monetary Fund.
Chan-Lau, J. (2004). Pension funds and emerging markets. [Washington D.C.]: International Monetary Fund.
Davis, R. (2014). Democratizing Pension Funds. Vancouver: UBC Press.
Ehrentreich, N. (2008). Agent-based modeling. Berlin: Springer.
Kamien, M. and Schwartz, N. (1989). Market structure and innovation. Cambridge: Cambridge University Press.
Lorie, J. and Hamilton, M. (1978). The stock market. Homewood: Richard D. Irwin.
Murphy, T. (n.d.). Benefits and beyond.
Pride, W. (2017). Foundations of business. New york: Cengage learning.