There are different types of pension systems, depending on the components, the source of finance, the type of management and the obligation of accumulation; they can be mandatory or voluntary, individual or professional, as well as private or public. The sources of income for a pension system may come from employees or governments, and they can be funded partly or entirely or are calculated by the pay-as-you-go scheme, where monthly contributions are paid by the employer for their employee depending on their wages (Holzmann, 2013). Developed countries usually make the decision to make a hybrid system by mixing beneficial components of different schemes to achieve the desired result.
Tapia (2008) noted, that striking examples of countries that have introduced mixed systems are Argentina, which has a mixed system of contributions, the Chilean government has also introduced a compulsory private pension system, Sweden now has a pension system with three components, consisting of social security with a nationwide NDC scheme, another component is the financial scheme of professional pensions, complemented by a system of private savings.
In many countries, pension reforms have been adopted so it is necessary to identify their main components. Based on the study of pension systems in OECD (2015) countries, seven major components of pension reform can be identified through which reforms can be assessed.
1) Covering the pension system for a mandatory and voluntary scheme. Ensuring employee coverage through several retirement plans is a major challenge for welfare provision. All developed
13 countries have created compulsory or voluntary pension plans, both public and private. However, there is still a large proportion of workers not covered even by state pension schemes, since they work informally or do not work at all.
2) Adequacy of retirement benefits. Improving the adequacy of retirement income relates to the replacement of income or its redistribution as well as the reform of the formula of retirement benefits.
Reforms aimed at improving adequacy include raising the level of coverage or level of retirement benefits, or these measures are implemented together. Improvement of retirement income for pensioners can also be achieved by reducing taxes. Replacement rate is one of the indicators of adequacy and it is equal to the ratio of net pension rights to the average net income over the lifetime.
3) Financial sustainability and availability of retirement benefits. Many OECD countries have adopted reforms to improve the long-term financial sustainability of pension systems to provide greater savings for the state budget. Most changes concerned the mechanism of pension indexation.
There are several ways to increase financial sustainability, possible changes in: purposeful reduction of the level of pension benefits or changes in pension formulas, lowering the indexation rate of pensions or termination of indexation, including through automatic adjustment mechanisms, raising the rates of contributions in defined benefit schemes, and increasing taxes and social contributions to retirement income.
4) Incentives that encourage people to work longer and save more when they work. Pension reforms in many OECD countries are aimed at extending working life. Measures taken were of the following main types:
increasing the retirement age;
improving the provision of financial incentives for work after retirement age;
less or no early retirement scheme.
5) Efficiency of administration to minimize current expenses of the pension system.High fees prevent employees from joining voluntary plans and make mandatory fees very expensive.
Inefficiencies in costs are a threat to the stability and suitability of the plans themselves. In systems that use the state pension system, improving the efficiency of administration reduces administrative costs and improves public finances. Reducing costs and increasing productivity in a number of countries by improving institutional convergence, regulatory measures, or the use of new technologies improves the pension system.
6) Diversification of sources of pension income. Diversification policy has four main forms:
Voluntary pension systems to improve investment opportunities.
Provisions that allow people to choose how their retirement savings are being invested.
Increase of investment opportunities for diversification of fund portfolios.
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Measures to raise the level of solvency of pension funds.
7) The seventh category covers other types of change, such as interim measures and those aimed at stimulating economic recovery.
SUMMARY OF LITERATURE REVIEW
In this chapter, I described the findings from the literature review. The experience of reforming pension systems from different countries of the world was analyzed and described. The experience of countries is divided into countries with developed economies and economies that are developing. The following section outline the main incentives for reforming the pension system, as well as the factors influencing the reform process. Next, I described the main risks and challenges that might arise, and pointed out the main components of past reforms in the world.
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Ⅲ. THEORETICAL FRAMEWORK
3.1. Introduction
Research on the political economy of developed countries in recent years is largely based on historical institutionalism that highlights the institutional structures and practices of national political economies (Steinmo et al., 1992; Thelen, 1999). This analytical framework gives a clear idea of historical patterns, institutional continuity and evolution, but does not explain institutional changes.
It can explain the complementarity of the components in different spheres of the economy, the patterns of their interaction, but have difficulty explaining a typical changes and why certain rules were imposed on the old or reinterpreted.
Thus, the lack of basic political economy is the basis for an analysis that can investigate institutions in such a way as to explain the dynamics and continuity of change and which can explain how, why and when public servants can form their own macro-historical institutions, strategic interests and cultural norms. This approach, "discursive institutionalism", is the latest of "new institutionalisms", which distinguishes subjects who build their ideas, transmitted through discourse after logical comprehension.
Discursive institutionalism is a concept that is used for all methodological approaches directed at ideas and discourses, which are emphasized on the content of ideas and / or on interactive processes (Schmidt, 2002; 2006; 2008). Discursive institutionalism offers an understanding of why institutions change, transforming cognitive and regulatory ideas about the changes and causes of change at different levels - policies, programs and philosophies, as well as their discursive interaction with who spoke to whom, where, when and why. In addition, the approach considers these ideas in the
"coordination discourse" of policymaking and in formulating them in the "communicative" discourse of discussion and legitimization. Discourse itself can take place from top to bottom, moving from leader to public, and from "bottom to top", or remains at the same level.
"Institutionalism" in this term speaks of the importance not only of the factor of communication, ideas or "text", but also of the institutional context. This institutional context is a specific construction and meaning of communication. It can also be regarded as a neo-institutional context that facilitates interaction and provides additional information about the laws, norms and strategies that underlie ideas and discourses.
In the research, for the most part, discursive institutionalism will be used, however, one cannot forget that this approach is derived from the three previous neo-institutionalism approaches, and historic institutionalism will be particularly useful. These two approaches complement each other and help deepen our understanding, to explain the dynamics of changes in historical institutionalism logic
16 structures through meaningful communication, and helps to explain the patterns of ideas and discourses in different institutional contexts.