The IPE Pensions Scholarship Fund has made a full grant of €5,000 to Humberto Godínez-Olivares, a PhD candidate at The University of Liverpool undertaking research into pay-as-you-go (PAYG) pension systems, with special attention into automatic balancing mechanisms (ABMs) within public pension provision.

“An aim of the project is to design an ABM to restore the sustainability of PAYG pension systems based on minimising changes in the main variables, such as the contribution rate, normal retirement age and indexation of pensions,” Godínez-Olivares said. 

He said the main purpose of the ABMs was to re-establish the financial equilibrium of PAYG pensions by adapting the system to changes in socio-economic and demographic conditions.

“The overall objectives,” he added, “are to create a credible institutional framework to increase the likelihood that promises of pension payments will be respected and to minimise the use of the pension system as an electoral tool.”

Godínez-Olivares is undertaking the research at the Institute for Financial and Actuarial Mathematics, at The University of Liverpool’s Department of Mathematical Sciences, under the supervision of Carmen Boado-Penas, director of the Actuarial Mathematics Programme at the department.

He expects to complete his PhD in 2016.

Supporting Godínez-Olivares’ application, Boado-Penas said PAYG pension systems were a topic of debate in most economies, mainly due to population ageing, yet “there are few economists and actuaries with expertise in this area”.

She added: “I certainly consider this an excellent subject area in which to carry out research.”       

Fennell Betson, founding editor of IPE and chair of the IPE Pensions Scholarship Fund board, said: “The IPE Scholarship Fund is delighted to provide this funding to Humberto. This is the first time we have made an award for research into public pensions.”

The fund’s awards are made by a board comprising Chris Verhaegen, member of the Occupational Pensions Stakeholder Group at EIOPA; Peter Melchior, executive director at PKA Pension Fund in Denmark; and Peter Borgdorff, executive director at PFZW in the Netherlands.

The fund’s academic adviser is Debbie Harrison, visiting professor at the Pensions Institute, Cass Business School, in London.

This is the fourth award made by the fund to a student undertaking pensions research at a European university.

Further details are available from Fennell Betson (fennell.betson@ipe.com) or at IPE’s Scholarship website.  

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