Taxation : The Tax Treatment of Funded Pensions
The tax treatment of funded pensions is a critical policy choice in pension reform. In countries with mature funded systems, like the Netherlands, Switzerland, the United Kingdom and the United States, pension funds are worth 85 per cent of GDP on...
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| Format: | Brief |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2005/07/6262158/taxation-tax-treatment-funded-pensions http://hdl.handle.net/10986/11211 |
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okr-10986-112112021-04-23T14:02:54Z Taxation : The Tax Treatment of Funded Pensions Whitehouse, Edward The tax treatment of funded pensions is a critical policy choice in pension reform. In countries with mature funded systems, like the Netherlands, Switzerland, the United Kingdom and the United States, pension funds are worth 85 per cent of GDP on average. Pension funds in mature systems are large and could prove an attractive revenue target. They are a major force in private savings flows, supplying capital to industry and providing retirement incomes. The note continues with an in depth analysis of taxing pensions, and further, highlights the question, how generous a tax treatment? There are three arguments for taxing pensions more generously that other kinds of savings. a) to ensure people have a standard of living in retirement close to when they were working, b) to cut the cost of social security benefits for pensioners, and to increase long-term savings. The note concludes that : the 'expenditure tax' taxes pension savings once, either when contributions are made or benefits withdrawn it is the best way of taxing pensions, because it is neutral between consuming now and consuming in the future; most countries treat pensions close to the expenditure tax, the pre-paid tax, which exempts benefits, collects more revenue now, but may not be credible. 2012-08-13T14:27:38Z 2012-08-13T14:27:38Z 2005-07 http://documents.worldbank.org/curated/en/2005/07/6262158/taxation-tax-treatment-funded-pensions http://hdl.handle.net/10986/11211 English World Bank Pension Reform Primer Series CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Brief Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| relation |
World Bank Pension Reform Primer Series |
| description |
The tax treatment of funded pensions is
a critical policy choice in pension reform. In countries
with mature funded systems, like the Netherlands,
Switzerland, the United Kingdom and the United States,
pension funds are worth 85 per cent of GDP on average.
Pension funds in mature systems are large and could prove an
attractive revenue target. They are a major force in private
savings flows, supplying capital to industry and providing
retirement incomes. The note continues with an in depth
analysis of taxing pensions, and further, highlights the
question, how generous a tax treatment? There are three
arguments for taxing pensions more generously that other
kinds of savings. a) to ensure people have a standard of
living in retirement close to when they were working, b) to
cut the cost of social security benefits for pensioners, and
to increase long-term savings. The note concludes that : the
'expenditure tax' taxes pension savings once,
either when contributions are made or benefits withdrawn it
is the best way of taxing pensions, because it is neutral
between consuming now and consuming in the future; most
countries treat pensions close to the expenditure tax, the
pre-paid tax, which exempts benefits, collects more revenue
now, but may not be credible. |
| format |
Publications & Research :: Brief |
| author |
Whitehouse, Edward |
| spellingShingle |
Whitehouse, Edward Taxation : The Tax Treatment of Funded Pensions |
| author_facet |
Whitehouse, Edward |
| author_sort |
Whitehouse, Edward |
| title |
Taxation : The Tax Treatment of Funded Pensions |
| title_short |
Taxation : The Tax Treatment of Funded Pensions |
| title_full |
Taxation : The Tax Treatment of Funded Pensions |
| title_fullStr |
Taxation : The Tax Treatment of Funded Pensions |
| title_full_unstemmed |
Taxation : The Tax Treatment of Funded Pensions |
| title_sort |
taxation : the tax treatment of funded pensions |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2005/07/6262158/taxation-tax-treatment-funded-pensions http://hdl.handle.net/10986/11211 |
| _version_ |
1764415923053133824 |