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National Pension Policy and Globalization: A New Approach to Strive for Efficient Portability and Equitable Taxation

Author

Listed:
  • Bernd Genser

    (University of Konstanz (retired), Konstanz, Germany)

  • Robert Holzmann

    (Austrian National Bank (governor) and Austrian Academy of Sciences, Vienna, Austria)

Abstract

As part of globalization, individuals increasingly spend part of their working or retirement life abroad and want to keep or move their acquired rights, accumulated retirement assets, or benefits in payment freely across borders. This raises the issue of the portability and taxation of cross-border pensions in accumulation and disbursement. This paper addresses both portability and taxation issues from the angle of which type of pension scheme – defined benefits (DB) or defined contributions (DC) – and which regime of cross border pension taxation is more aligned with globalization in establishing individual fairness, fiscal fairness, and bureaucratic efficiency. The paper summarizes the limited literature on portability and taxation of cross-border pensions and concludes that the current taxation approach is unsustainable in a global setting. We present a proposal to move from deferred toward front-loaded taxation of pensions and point at the gains in fairness for individuals and states and some other attractive features of this regime change with respect to taxation and portability.

Suggested Citation

  • Bernd Genser & Robert Holzmann, 2019. "National Pension Policy and Globalization: A New Approach to Strive for Efficient Portability and Equitable Taxation," Working Paper Series of the Department of Economics, University of Konstanz 2019-04, Department of Economics, University of Konstanz.
    • Handle: RePEc:knz:dpteco:1904
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    File URL: http://www.uni-konstanz.de/FuF/wiwi/workingpaperseries/WP_04_Genser_Holzmann_2019.pdf
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    References listed on IDEAS

    as
    1. Ayuso, Mercedes & Bravo, Jorge M. & Holzmann, Robert, 2021. "Getting life expectancy estimates right for pension policy: period versus cohort approach," Journal of Pension Economics and Finance, Cambridge University Press, vol. 20(2), pages 212-231, April.
    2. Bernd Genser & Robert Holzmann, 2016. "The Taxation of Internationally Portable Pensions: Fiscal Issues and Policy Options," CESifo Working Paper Series 5702, CESifo.
    3. Alain Jousten, 2015. "The Retirement of the Migrant Labor Force: Pension Portability and Beyond," CESifo Economic Studies, CESifo Group, vol. 61(2), pages 416-437.
    4. Holzmann, Robert & Alonso-García, Jennifer & Labit-Hardy, Heloise & Villegas, Andres M., 2017. "NDC Schemes and Heterogeneity in Longevity: Proposals for Redesign," IZA Discussion Papers 11193, Institute of Labor Economics (IZA).
    5. Robert Holzmann, 2016. "Bilateral social security agreements and pensions portability: A study of four migrant corridors between EU and non‐EU countries," International Social Security Review, John Wiley & Sons, vol. 69(3-4), pages 109-130, July.
    6. Bernd Genser & Robert Holzmann, 2016. "The Taxation of Internationally Portable Pensions: An Introduction to Fiscal Issues and Policy Options," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(1), pages 24-29, 05.
    7. Robert Holzmann & Johannes Koettl, 2015. "Portability of Pension, Health, and Other Social Benefits: Facts, Concepts, and Issues," CESifo Economic Studies, CESifo Group, vol. 61(2), pages 377-415.
    8. Holzmann,Robert & Robalino,David A. & Winkler,Hernan Jorge, 2019. "NDC Schemes and the Labor Market : Issues and Options," Social Protection Discussion Papers and Notes 136565, The World Bank.
    9. Holzmann, Robert & Wels, Jacques, 2018. "Status and Progress in Cross-Border Portability of Social Security Benefits," IZA Discussion Papers 11481, Institute of Labor Economics (IZA).
    10. Holzmann, Robert & Koettl, Johannes & Chernetsky, Taras, 2005. "Portability regimes of pension and health care benefits for international migrants: an analysis of issues and good practices," Social Protection Discussion Papers and Notes 32750, The World Bank.
    11. Bernd Genser & Robert Holzmann, 2016. "The Taxation of Internationally Portable Pensions: An Introduction to Fiscal Issues and Policy Options," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(01), pages 24-29, May.
    12. Bernd Genser, 2015. "Towards an International Tax Order for the Taxation of Retirement Income," Working Paper Series of the Department of Economics, University of Konstanz 2015-13, Department of Economics, University of Konstanz.
    13. repec:ces:ifodic:v:14:y:2016:i:1:p:19204327 is not listed on IDEAS
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    Cited by:

    1. Bernd Genser & Robert Holzmann, 2020. "Taxing German Old-age Pensions Fairly and Effciently," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 17(04), pages 36-40, January.

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    More about this item

    Keywords

    portability of pensions; pension taxation; international taxation; international migration; model tax convention;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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