Mauritius National Pension Fund Financial Analysis

Mauritius National bonus computer memory Financial AnalysisThe National reward contour and its fiscal hints on the economy of MauritiusChapter 1 approachThe philosophy of the National Pension Fund (NPF) includes the idea that one ought to earn a reasonable pro great deal after tribute come along of what one existentise during ones work life. If you open contributed to the NPF and built up your gift points, you leave get a allowance which, when added to your old-age tribute exit be a reasonable.The National Pension Fund scheme is proposed as an some another(prenominal) requisite redeeming(a) for solitude. Once it is set up, the NPF give fit into Pillar 2 of the Multi-Pillar Model of the World Bank. The NPF as yet allow not replace provident notes or privacy mutual coin, but rather improves thriftiness convey for in store(predicate) retirees.Mauritius is found in the developing countries group where contractual nest egg, nest egg with insurance comp anies and award pecuniary re seminal fluid exceed 40 percent of Gross domesticated Product and which represent a greater potential force in the domestic fiscal strategy. Pension silver account for 75 percent of contractual savings. The premium arrangement is a equilibrize and hearty-managed multi- chromatography column.In Mauritius thither collapse not many authors that absorb write specifically on that subject, that is, fiscal intimation of National Pension Fund on the Mauritian economy. I guide mainly economic consumptiond the interrogation chafe by other analysts in other countries and try to apply it on the Mauritian economy. Obviously the result forget not be the same, but try to make an estimate of it.Objectives of that Project go the boilersuit pecuniary implication of NPFTesting the pecuniary effect of NPF on discipline savingsEstimating the relationship between fiscal balance of Mauritius non- loneliness account and the crystalize saving that occurs wi thin the NPFChapter remainsChapter one gives a brief overview of how the project is carry on.Chapter two makes an overview of the National indemnity fund, its evolution, building and its financing inauguration as well as presidency spending and the future of NPF.Chapter three is the literature review, that is, what writers around the globe have commented on the pension scheme.Chapter four is the research methodology. The research is carried out using retrogression equation to examine the financial implication NPF on our variables.Chapter five then come the analysis based on the results obtained, that is the financial effect of NPF on national savings and the relationship between fiscal balance of Mauritius non- privacy account and the net saving that occurs within the NPF.Then finally chapter septet will include suggestions and conclusions.Chapter 2 Literature ReviewIntroductionPension monetary resource is be delimitate as forms of institutional investor, which collect, p ool and invest capital contributed by sponsors and beneficiaries to provide for the future pension entitlements of beneficiaries (E PhilipDavis 1995).Pension fund offer individuals the mean to collect saving over their operative life so as to finance their consumption need in retirement, either by means of a lump sum or by provision of an annuity, while as well as supplying bills to corporations, dwellings (via securitised loans) or organisations for enthronization or consumption. Bodie(1990a) has formalized pension cash function as a form of retirement income insurance.E Philip Davis (1995) suggests that pension currency perform a number of the functions of the financial system much than efficiently than banks or direct holdings. Their step-up complements that of capital trades and they have acted as study catalysts of qualifying in the financial landscape. But this is not the however reason for growth. It is also a outlet of fiscal incentives and receiptss to employers, as well as maturement ask arising from the maturement of the community.Pension funds be typically sponsored by employers, much(prenominal) as companies, cosmos corporations, industry or trade groups accordingly, employers as well as employees typically contribute. pay whitethorn be internally or externally managed.The pension system is commonly divided into three lynchpins. The first pillar is the pay-as-you-go system based on payments by everyday institutions which ar mainly funded by r yetue enhancement revenues. The second pillar constitutes fully funded pension funds with mandatory membership and the third pillar is based on fully funded pension saving schemes with voluntary membership.In a pay-as-you-go system, each coevals pays for the costs of the presently retired in return for a commitment for the same treatment during its own retirement. Workers who spend their entire work and retirement life under a PAYGO system with constant tax place will earn a real return on their contributions equal to the growth in the workforce plus the growth in the real winnings (Samuelson, 1958, and Aaron, 1966).Pension funds provide millions of tidy sum in the world security and comfort in old age. Pension funds represent the savings of millions of peck, and as Paul Myners says, the ability of funds to invest these pluss tellingly has a profound impact on their economic well being. Because so many people forecast on pension funds to provide for their futures, ensuring the funds serve the needs of their members is a priority for Government.The social security system on the other buy the farm as stated by law, guarantees people covered by its provisions either because they perform an occupational activity or meet the requirements established for non-contributory slip social security, as well as dependent members of the family or similar, adequate protection in the contingencies and circumstances. brotherly Security has been defined as the protection which conjunction provides for its members through a series of unrestricted measures against the economic and social distress that otherwise would be caused by the stoppage or substantial reduction of earnings resulting from sickness, maternity, employment injury, invalidity, old age and death the provision of medical checkup cargon and the provision of subsidies for families with children.In the Social Security system, the bills you pay into the system gets this instant paid back out to the people who ar on-line(prenominal)ly getting Social Security checks. The Social Security tax has been raising more cash than is needed to pay for current benefits, in tell apart to build up a surplus to help finance the retirement of the Baby Boom generation. The funds is used in a sense to finance the governing body deficit, just like any other money the government borrows, Dean Baker (1998).The Social Security system is primarily a pay-as-you-go system, meaning that payme nts to current retirees come from current payments into the system. So Social Security will be the foundation of your retirement income. Thats becauseYou wont outlive your Social Security retirement benefit. It will be there for you for the rest of your life.Your Social Security benefit wont lose its value. From magazine to meter, Social Security benefits are adjusted so they al behaviors keep pace with inflation.Why National Pension Fund?Worker myopia, or neglect of foresight poor planning occurs because people give too brusque considerations to their future economic needs when making decisions more or less saving for retirement. Most people seem to have a natural inclination to live for today and avoid thinking about old age and death. Hence, they give very little systematic thought to the financial issues of old age until they come face to face with them. By the time they recognize they whitethorn have a puzzle when they retire, it is usually too late to fix. Government int ervention through NPF has help people set aside a portion of their earnings when they are working so that they have an adequate income when they retire. Without compulsory contributions for retirement, myopic workers would not save enough to ensure an adequate retirement income and need would result.Another rationale for the humans of the compulsory contribution to the NPF is to protect the prudent that saves for retirement against those who do not save. Under a purely voluntary system some will contribute, others will not. As Boulding (1958) puts it in his argument, those who do not insure will have to be supported anyway-perhaps at lower levels and in humiliating and respect-destroying ways when they are in their non-productive mannikin of their life, but that they will escape the burden of paying subsidys when they are in their productive phase. In fair-mindedness to those who insure voluntarily and in order to maintain the self-respect of those who would not otherwise insur e, contributions for retirement should be do compulsory. Hence, mandatory contributions are necessary to give the retirement savings results that people need to have so as to have an adequate standard of living in their retirement years.Pension funds are also an great source of capital accumulation that female genital organ be used for different purposes as the build up the basic of national infra complex body part, power stations and galvanic networks, Olli E. Kangas (2006). The Finnish case demonstrates that it was possible to unify social indemnity goals with the economic goals of building up modern industrial trade economies. The Finnish experience has serves as a good example of how social policy has been successfully used as a developmental strategy, Mkandawire (2001). Pension funds are not only vital to the pension holders they provide for. They are also key players in the economy as a whole.Government cypherPension supporting issues have an authorised, but often hi dden, impact on the finances of state governments, J. Fred Giertz (2003).In close countries, contributions to retirement funds are made by employers and employees each year. Yet, there is no requirement in the short run that these contributions be sufficient to fully fund the systems. Governments always ensure that pension payments are actually made to retirees, regardless of the level of contributions, as they are broadly the funders of last resort. If pension systems are under funded, governments must dispense with this conundrum sooner or afterward through additional contributions to the systems. If systems are over funded, government resources throne be redirected from pensions to other government programs,J. Fred Giertz (2003).It is seen that insular pensions bring low universal pension spending in the agelong circumstance, once orphic schemes are mature. Private pensions is apparent to increase budgetary pressures in the short call if workers contributions go int o their individual pension accounts, they cannot be used to pay for the pensions of the older generation thus, governments have to finance pensions for the transition generation through taxation or borrowing, Nicholas Barr (2001). This will in a way affect the government budget.Unsustainable pension systems can be a problem to fiscal stableness, economic growth, and poverty reduction. The need for pension reform has become press as demographic aging has strained pension systems around the world, leading to larger expenditures, large deficits, and high contribution rates. In many cases the pension system has become a source of fiscal and macroeconomic instability, a constraint to economic growth, and an ineffective and or inequitable source of retirement income.J. Fred Giertz (2003)suggests thatnot only are pension asset transmits large in comparison with state budgets, they are also growing and becoming more volatile. This vogue is likely to continue and the relational size of state pension obligations is increase. This suggests that pension funding is becoming an increasingly important aspect of state government. He also states that state pension funding today is no sounder than in the aboriginal 1990s. This is not necessarily a cause for alarm, but it is a source of concern. Pension funding will be an increasingly important demand on state finances in the up coming years.In the G-10 (1998) report, it states that the maturement of common wealthinesss could have dramatic cause on government finances. Under current policies, government spending in the G-10 countries is projected to test sharply over the nigh several(prenominal) decades for several reasons. Per capita expenditure for the senior is high in the areas of public retirement benefits and, in some countries, welfare support. Public expenditure on medical and wellness support for the of age(p) is also high and has been rising. If advances in medical technology come at ever increasing cost a nd if the incidence of health expenditure on the cured continues to jump, the fiscal burden could become substantial in some countries.At the same time, government revenues will be adversely affected as the bodge fly high generation moves from its high income generating years to retirement. Countries whose revenues are tied more to consumption or value added taxes will ladder to experience less of a deterioration in revenues than those that depend more heavily on income or payroll taxes. This would create a severe chuff on national saving at a time when saving will be crucial to fostering the growth of labour productivity.Impacts of senescent existenceNorman Vincent Peale quotes that Age-based retirement every which way severs productive persons from their livelihood, squanders their talents, scars their health, strains an already overburdened Social Security system, and drives many elderly people into poverty and despair. Ageism is as terrible as racism and sexism.Barry Bo sworth (2003) argued that lag economic growth and population aging in the major industrial countries have place change magnitude financial strain on pay-as-you-go (PAYGO) public pension systems. Retirement pensions have become a serious fiscal concern in most industrialized countries. Pensions are more often than not paid for from tax revenues and it is foreseen that contributions will need to be raised substantially during the coming decades.The World Bank (1994) states that high taxes are harmful to economic growth, since they allocate resources to the informal sector, thereby reduction output in the more efficient formal market sector of the economy. The reasons are that many people are forthwith nearing retirement age and that the populations today live longer and have fewer children than in the past.Nicholas Barr (2001) argued that the effect on funded schemes is more restrained but equally unavoidable. When a large generation of workers retires, it liquefiedates its f inancial assets to pay for its pensions. If those assets are equities, sales of financial assets by the large pensioner generation will exceed purchases of assets by the little(a) younger generation, leading to travel virtue scathes and, hence, to lower pensions. Alternatively, if those assets are bank accounts, high spending by the large pensioner generation will reelect inflationary pressures and again slash the value of pensions.Domestic savingsThe main views of the life- calendar method of birth control theory stipulate that individuals try to smooth consumption over their lifetime, Brumberg and Modigliani (1954). Normally savings follow a projection shaped pattern, that is, income is relatively low when individuals are either very young or retired as during their working life savings rate is high .Ageing nation increases the proportion of households with a relatively lower savings rate in the economy which leads to a decrease in private savings. Estimates of the impac t of a change in the age structure of the population on private savings, shows that population ageing will be likely to reduce savings.As regard to public savings, population ageing is likely to exercise considerable pressure on public finances, Weil (2006). In the situation of the pension schemes of the current pay-as-you-go pension schemes that exist in many states, an ageing population implies that the number of beneficiaries increases while the number of contributors to the system decreases. The ageing population will also adversely affect public finances through high healthcare and long-term care costs, given that older populations are more likely to make use of healthcare facilities, which, to a large extent, are provided by the public sector.Both microeconomic and macroeconomic studies find that the as reliableed age profile of saving generally conforms with the life- motorbike model, which implies that saving rates rise over a workers active career and then decline in retir ement. Compared with macroeconomic analyses, microeconomic studies tend to show smaller variation in saving rates over the life cycle, this may be of the highly skewed distribution of wealth and saving across households, Ralph C. Bryant (2004).At a micro level, family or other obligatory pension funds can implement enforced saving by deferring net incomes and salaries, thereby reduction assay of a low replacement ratio. At a macro level, the increase in saving is not usually one-to-one, as increased contractual saving via pension funds is typically partly or wholly offset by declining flexible saving, E Philip Davis (1995).The remaining effect most likely results from liquidity constraints on some individuals (especially the young), who are unable to borrow in order to offset obligatory saving via pension funds early in the life cycle. It can also be anticipated that, even in a liberalized financial system, credit constraints will affect lower income individuals in particular severely, as they have no assets to guarantee and also have less secure employment. Therefore forced pensions saving will tend to increase their overall saving especially markedly, Bernheim and Scholz (1992). On the other hand Samwick (2000) found a lower rate of saving in countries with extensive PAYG systems. Agosin (2002) extended their analysis and shows that the rise of saving was concentrated in the business sector, and that the net change in household saving was small.Implications for counterweight real enliven ratesThe forecasted declines in savings make the evaluate signification of ageing on the equilibrium real interest rate ambiguous. If investment get downs faster than domestic savings at each level of join income, the real interest rate that clears the market for loanable funds is expected to fall, since it is difficult for savers to find profitable investment opportunities, J.C. Trichet (2007). On the other hand, if domestic savings were to fall faster than inve stment then the real interest rate would rise to reflect the relative scarcity of financial funds.This likely decline in interest rate that equalizes savings and investment could be identified developed financial markets. Even though the actual impact of the evolving demographic structure on the equilibrium real interest rate in the capital markets is something that is going to occur with a considerable lag, some economists have suggested that expectations of such developments may have already started to exert some influence on the pricing of bonds. Among other things, these analyses suggest that ageing could have contributed to the flattening of the yield arch that has been observed over the recent past, J.C. Trichet (2007). even as it is based on the assumption that capital market participants are perfectly forward looking, an assumption which is questionable, it should be tempered with a great deal of caution if it is true that financial markets tend to overreact to short term p henomena, the personal effects of ageing on the yield curve could be limited, DellaVigna and Pollet (2005).It has to be interpreted into consideration that these quantitative simulations require a number of qualifications. On one hand, some real world factors may make the true decline in the equilibrium real interest rate larger than estimated in macroeconomic models. For instance, older people may save more than predicted by the life cycle theory as they may want to leave a bequest to their children, putting further downward pressure on the equilibrium rate. The degree of adventure aversion may also change with age as if the older people were systematically more assay opposed than the young one, the accumulation of precautionary savings would lead to a higher than predicted savings rate and a lower than predicted real rate, Bakshi and subgenus Chen (1994).Moreover private savings rates may be significantly affected by pension reforms, Miles (2002).Pressures on PricesHans J Blom mestein (1998) states that concerns have been expressed that the growing demand for high feeling private securities like justness and corporate bonds, associated with the growth of advance funded pension systems in search of investment opportunities (thereby increasing the demand for financial assets) and falling public sector borrowing requirements (thereby reducing the supply of government securities), would put strong upward pressure on the prices of financial assets. Here, the combination of the widespread privatisation of state possess enterprises and reform of pension systems brings the hazard of killing two birds with one stone. Pension reform, which would increase the demand for equity, and privatisation, which expands the supply, at the same time permits a more balanced growth in private securities markets, at least over the medium term. In a somewhat longer term perspective, population ageing may have an impact on the risk premium, that is, the difference between the r eturns on stocks and the yield on bonds.As asset preferences vary across age groups, the ageing of the foil boom generation could affect both absolute and relative positions of stock and bond prices. On average, middle age is the portion of the life cycle when saving rates are highest. Moreover, middle aged workers generally are more able and willing to hold a riskier portfolio that is, one weighted more heavily towards stocks than bonds.This is a consequence of two factors first, while still working, a stockholder is better able to make up for any bad equity returns second, middle aged workers have a longer time horizon and thus are willing to lease more risk in switch over for the expectation of higher returns. Moreover, higher demand for stocks relative to bonds should increase the price of stocks relative to bonds, thus decreasing the equity premium. Thus, some have hypothesized that an ageing population would cause the equity premium to increase. But if the age of the popula tion is increasing at least in part because life span is increasing, and thus time horizons are lengthening, then the ageing of the population does not necessarily imply that average risk aversion should be increasing and risk premium on stocks should be rising.After the baby boomers begin to retire, saving rates would tend to fall, stock and bond prices to decline, and the equity premium to rise as baby boom retirees shift their portfolios away from stocks toward bonds, Hans J Blommestein (1998).Population age structure can influence the demand for different classes of financial market assets both because of its effect on saving and because young, middle aged, and elderly savers may seek to hold their assets in different forms. Empirical studies have uncovered evidence that population age structure affects stock market prices and the real returns of different classes of financial assets, but the consistency of this evidence is not overwhelming. It is unclear whether the effects of demographic influences on asset prices and returns are large relative to the effects of other and less predictable determinants of prices and returns, Ralph C. Bryant (2004).Implications of population ageing for the conduct of monetary policyThe life-cycle theory stipulates that , individuals during their working lives accumulate financial wealth in order to finance their consumption during retirement. As a consequence, populations who are near to retirement age will tend to have higher wealth to income ratios.Simultaneously, expected imbalances in publicly financed pension schemes make it possible to consider that the increasing number of retirees would depend more on their own collect wealth, as opposed to public pension provisions, to maintain their consumption levels. Consequently, the fraction of the population exposed to asset price fluctuations could increase with ageing, Young (2002). noggin (2004) argues that longer life expectancy would presumptively strengthen this eff ect.Therefore, the transmission channel of monetary policy may be affected by ageing. In particular, the so called wealth channel, which links asset prices to consumption, may gain relative importance and play a vital role than in the past, G10 (2005). Miles (2002) points out that the monetary policy multiplier factor would probably rise with population ageing, mainly as a result of the increased wealth channel and greater price impact of monetary policy decisions. In spite of this, he also mentions that an older population is less likely to be credit constrained, especially when the pension system is reformed towards more funded systems. This might reduce the durability of the credit channel. Depending on the relative importance of these channels, monetary policy could, in principle, become more or less effective with ageing. Miles suggests that the first effect is expected to dominate.A move towards demographic structure in which the population accounts for an increasing elderly population is expected to generate a gradual but long-lasting change in savings habits. This may results in an impact on the demand for all classes of assets even though certain sector of the capital market are likely to be affected more substantially than others. If, for example, older people are more risk averse(predicate) and prefer to hold financial assets paying fixed income returns such as government securities, then the demand for government bonds would tend to increase relative to riskier investment options, such as equity, Bakshi and Chen (1994) and De Santis and Lhrmann (2006).In this situation, where a larger part of households wealth is invested in nominal assets, price stability would be even more important for households, G10 (2005) and Bean (2004). Stable prices ensure that the real value of both pension entitlements and savings is maintained and prevent arbitrary redistributions of income and wealth to the detriment of the most vulnerable groups in society, in pa rticular, pensioners. It is likely that, as a significant fraction of wealth is accumulated in real estate and financial assets, households exposure to asset price movements will tend to increase.This might coincide with a situation in which a large fraction of the population in their old age dis-saving phase are disposing assets in order to finance consumption during retirement. In this respect, some authors have warned that, when the baby-boom generation retires and starts to dissave, excess supply in financial markets could lead to a significant decline in asset prices, the consequences of which might be felt by the entire population, Siegel (1998), Abel (2001) and (2003). This view is known as the asset meltdown hypothesis. Yoo (1994) estimated that asset prices may drop by as much as 15% as a result of demographic change alone. This is why a conceivable commitment to maintaining price stability and, as a reflection, an orderly financial environment is and will remain so import ant for maintaining the standard of living of people, particularly for the poorest and the most vulnerable.Investment of Pension FundThe rapid growth of pension funds in many countries, and the stimulus they are providing to the growth of capital markets, both suggest that their activities as financial intermediaries merit considerable attention, E Philip Davis (2000). Pension funds have an impact on the stability of financial markets in several ways, most significantly through their investment behavior.Since early withdrawal of funds is usually restricted or forbidden, pension funds have long term liabilities, allowing holding of high risk and high return instruments. Accordingly, monies are intermediated by pension funds into a variety of financial assets, which include corporate equities, government bonds, real estate, corporate debt (in the form of loans or bonds), securitised loans, foreign holdings of the instruments mentioned above and money market instruments and deposits as forms of liquidity.Hellwig (1990) suggest that financial institutions can form long term relationships with borrowers, which reduce information asymmetry and hence moral hazard. Apart from economies of scale these considerations have arisen in the literature mainly for debt finance and for banks. Whereas the importance of information asymmetries and rudimentary contracts is equally recognised for equity finance, the role of financial institutions as counterparts is less well developed. Equally, institutional investors such as pension funds may not rely on the same information and control mechanisms as banks.The role of pension funds is clearly not to aid exchange of goods, services and assets directly. This is because, remote banks, money market funds, and to a lesser extent long term mutual funds, they do not offer liquid liabilities. Nevertheless, pension funds have had an important indirect role in boosting the efficiency of the financial systems, by influencing the structure of securities markets. This effect on micro structure links to their demand for liquidity, i.e. to discharge in large size without moving the price against them, anonymously, and at low transactions costs.Pension funds provide risk control directly to households via the forms of retirement income insurance they provide, an advantage which largely reflects the unusual (among financial intermediaries) link of pension funds to employers. To assist in undertaking this risk control function they modify assets as noted above and also act in securities and derivatives markets to hedge and control risk. As institutional investors, pension funds are well placed to use derivatives and other means of risk control many innovations have been introduced or developed specifically to cater for their demand (Bodie 1990b, 1999).E Philip Davis (1995a) suggests that as pension funds focus mainly on government bonds and high grade corporate bonds, while banks tend to monopolise small business financi ng. And Lorenzo Bini Smaghi (2006) states that investing wisely matters for long term economic wellbeing, and that the portfolio allocation decision is of paramount importance in order to maintain living standards in the old age.Pension funds are the fastest growing of all financial institutions. They now cover half the labor force and represent eighth the financial assets of the entire household sector, Vincent P. Apilado (1972). The size of pension funds has also had an impact on the structure of financial markets countries with large funded pension schemes tend to have highly developed securities markets in countries with small pension-fund sectors, capital markets are relatively underdeveloped (the equity market in particular, Hans. J. Blommestein (1998).Living StandardM.PONDS(2003) states that the raison dtre of wage indexed defined benefit pension funds is to provide insurance against standard of living risk after retirement, based on intergenerational risk sharing. Pension f unds necessarily have to accept mismatch risk in providing this kind of insurance. Mismatch risk taken by the pension fund is risk for the funds stakeholders.The material living standards of tomorrows working and retired people will depend on the goods and services produced by those who will be working at the time. Changes in retirement income financing might modify the relative living standards of workers compared with retirees, but only later retirement could have a large effect in increasing living standards for both, Peter Hicks (2004).OMauritius National Pension Fund Financial AnalysisMauritius National Pension Fund Financial AnalysisThe National Pension Fund and its financial implications on the economy of MauritiusChapter 1 IntroductionThe philosophy of the National Pension Fund (NPF) includes the idea that one ought to earn a reasonable proportion after pension age of what one earned during ones working life. If you have contributed to the NPF and built up your pension poin ts, you will get a pension which, when added to your old-age pension will be a reasonable.The National Pension Fund scheme is proposed as another mandatory saving for retirement. Once it is set up, the NPF will fit into Pillar 2 of the Multi-Pillar Model of the World Bank. The NPF nevertheless will not replace provident funds or retirement mutual funds, but rather improves saving channels for future retirees.Mauritius is found in the developing countries group where contractual savings, savings with insurance companies and pension funds exceed 40 percent of Gross Domestic Product and which represent a greater potential force in the domestic financial system. Pension funds account for 75 percent of contractual savings. The pension system is a balanced and well-managed multi-pillar.In Mauritius there have not many authors that have write specifically on that subject, that is, financial implication of National Pension Fund on the Mauritian economy. I have mainly used the research made by other analysts in other countries and try to apply it on the Mauritian economy. Obviously the result will not be the same, but try to make an estimate of it.Objectives of that ProjectAnalyse the overall financial implication of NPFTesting the financial effect of NPF on national savingsEstimating the relationship between fiscal balance of Mauritius non-retirement account and the net saving that occurs within the NPFChapter OutlineChapter one gives a brief overview of how the project is carry on.Chapter two makes an overview of the National pension fund, its evolution, structure and its financing source as well as government expenditure and the future of NPF.Chapter three is the literature review, that is, what writers around the globe have commented on the pension system.Chapter four is the research methodology. The research is carried out using regression equation to examine the financial implication NPF on our variables.Chapter five then come the analysis based on the results ob tained, that is the financial effect of NPF on national savings and the relationship between fiscal balance of Mauritius non-retirement account and the net saving that occurs within the NPF.Then finally chapter seven will include suggestions and conclusions.Chapter 2 Literature ReviewIntroductionPension funds is be defined as forms of institutional investor, which collect, pool and invest funds contributed by sponsors and beneficiaries to provide for the future pension entitlements of beneficiaries (E PhilipDavis 1995).Pension fund offer individuals the mean to collect saving over their working life so as to finance their consumption needs in retirement, either by means of a lump sum or by provision of an annuity, while also supplying funds to corporations, households (via securitised loans) or governments for investment or consumption. Bodie(1990a) has formalized pension funds function as a form of retirement income insurance.E Philip Davis (1995) suggests that pension funds perfor m a number of the functions of the financial system more efficiently than banks or direct holdings. Their growth complements that of capital markets and they have acted as major catalysts of change in the financial landscape. But this is not the only reason for growth. It is also a consequence of fiscal incentives and benefits to employers, as well as growing demand arising from the ageing of the population.Pension funds are typically sponsored by employers, such as companies, public corporations, industry or trade groups accordingly, employers as well as employees typically contribute. Funds may be internally or externally managed.The pension system is commonly divided into three pillars. The first pillar is the pay-as-you-go system based on payments by public institutions which are mainly funded by tax revenues. The second pillar constitutes fully funded pension funds with mandatory membership and the third pillar is based on fully funded pension saving schemes with voluntary memb ership.In a pay-as-you-go system, each generation pays for the costs of the currently retired in return for a commitment for the same treatment during its own retirement. Workers who spend their entire work and retirement life under a PAYGO system with constant tax rates will earn a real return on their contributions equal to the growth in the workforce plus the growth in the real wage (Samuelson, 1958, and Aaron, 1966).Pension funds provide millions of people in the world security and comfort in old age. Pension funds represent the savings of millions of people, and as Paul Myners says, the ability of funds to invest these assets effectively has a profound impact on their economic well being. Because so many people depend on pension funds to provide for their futures, ensuring the funds serve the needs of their members is a priority for Government.The social security system on the other hand as stated by law, guarantees people covered by its provisions either because they perform a n occupational activity or meet the requirements established for non-contributory type social security, as well as dependent members of the family or similar, adequate protection in the contingencies and circumstances.Social Security has been defined as the protection which society provides for its members through a series of public measures against the economic and social distress that otherwise would be caused by the stoppage or substantial reduction of earnings resulting from sickness, maternity, employment injury, invalidity, old age and death the provision of medical care and the provision of subsidies for families with children.In the Social Security system, the money you pay into the system gets immediately paid back out to the people who are currently getting Social Security checks. The Social Security tax has been raising more money than is needed to pay for current benefits, in order to build up a surplus to help finance the retirement of the Baby Boom generation. The mone y is used in a sense to finance the government deficit, just like any other money the government borrows, Dean Baker (1998).The Social Security system is primarily a pay-as-you-go system, meaning that payments to current retirees come from current payments into the system. So Social Security will be the foundation of your retirement income. Thats becauseYou wont outlive your Social Security retirement benefit. It will be there for you for the rest of your life.Your Social Security benefit wont lose its value. From time to time, Social Security benefits are adjusted so they always keep pace with inflation.Why National Pension Fund?Worker myopia, or lack of foresight poor planning occurs because people give too little considerations to their future economic needs when making decisions about saving for retirement. Most people seem to have a natural inclination to live for today and avoid thinking about old age and death. Hence, they give very little systematic thought to the financial issues of old age until they come face to face with them. By the time they recognize they may have a problem when they retire, it is usually too late to fix. Government intervention through NPF has help people set aside a portion of their earnings when they are working so that they have an adequate income when they retire. Without compulsory contributions for retirement, myopic workers would not save enough to ensure an adequate retirement income and poverty would result.Another rationale for the existence of the compulsory contribution to the NPF is to protect the prudent that saves for retirement against those who do not save. Under a purely voluntary system some will contribute, others will not. As Boulding (1958) puts it in his argument, those who do not insure will have to be supported anyway-perhaps at lower levels and in humiliating and respect-destroying ways when they are in their non-productive phase of their life, but that they will escape the burden of paying premiums wh en they are in their productive phase. In fairness to those who insure voluntarily and in order to maintain the self-respect of those who would not otherwise insure, contributions for retirement should be made compulsory. Hence, mandatory contributions are necessary to achieve the retirement savings results that people need to have so as to have an adequate standard of living in their retirement years.Pension funds are also an important source of capital accumulation that can be used for different purposes as the build up the basic of national infrastructure, power stations and electric networks, Olli E. Kangas (2006). The Finnish case demonstrates that it was possible to unify social policy goals with the economic goals of building up modern industrial market economies. The Finnish experience has serves as a good example of how social policy has been successfully used as a developmental strategy, Mkandawire (2001). Pension funds are not only vital to the pension holders they provid e for. They are also key players in the economy as a whole.Government BudgetPension funding issues have an important, but often hidden, impact on the finances of state governments, J. Fred Giertz (2003).In most countries, contributions to retirement funds are made by employers and employees each year. Yet, there is no requirement in the short run that these contributions be sufficient to fully fund the systems. Governments always ensure that pension payments are actually made to retirees, regardless of the level of contributions, as they are generally the funders of last resort. If pension systems are under funded, governments must deal with this problem sooner or later through additional contributions to the systems. If systems are over funded, government resources can be redirected from pensions to other government programs,J. Fred Giertz (2003).It is seen that private pensions reduce public pension spending in the longer term, once private schemes are mature. Private pensions is likely to increase budgetary pressures in the short term if workers contributions go into their individual pension accounts, they cannot be used to pay for the pensions of the older generation thus, governments have to finance pensions for the transition generation through taxation or borrowing, Nicholas Barr (2001). This will in a way affect the government budget.Unsustainable pension systems can be a problem to fiscal stability, economic growth, and poverty reduction. The need for pension reform has become pressing as demographic aging has strained pension systems around the world, leading to large expenditures, large deficits, and high contribution rates. In many cases the pension system has become a source of fiscal and macroeconomic instability, a constraint to economic growth, and an ineffective and or inequitable source of retirement income.J. Fred Giertz (2003)suggests thatnot only are pension asset changes large in comparison with state budgets, they are also growing and be coming more volatile. This trend is likely to continue and the relative size of state pension obligations is increasing. This suggests that pension funding is becoming an increasingly important aspect of state government. He also states that state pension funding today is no sounder than in the early 1990s. This is not necessarily a cause for alarm, but it is a source of concern. Pension funding will be an increasingly important demand on state finances in the up coming years.In the G-10 (1998) report, it states that the ageing of populations could have dramatic effects on government finances. Under current policies, government spending in the G-10 countries is projected to rise sharply over the next several decades for several reasons. Per capita expenditure for the elderly is high in the areas of public retirement benefits and, in some countries, welfare support. Public expenditure on medical and health support for the elderly is also high and has been rising. If advances in medic al technology come at ever increasing cost and if the incidence of health expenditure on the elderly continues to rise, the fiscal burden could become substantial in some countries.At the same time, government revenues will be adversely affected as the baby boom generation moves from its high income generating years to retirement. Countries whose revenues are tied more to consumption or value added taxes will tend to experience less of a deterioration in revenues than those that depend more heavily on income or payroll taxes. This would create a severe drag on national saving at a time when saving will be crucial to fostering the growth of labour productivity.Impacts of ageing populationNorman Vincent Peale quotes that Age-based retirement arbitrarily severs productive persons from their livelihood, squanders their talents, scars their health, strains an already overburdened Social Security system, and drives many elderly people into poverty and despair. Ageism is as odious as racis m and sexism.Barry Bosworth (2003) argued that slowing economic growth and population aging in the major industrial countries have placed increased financial strain on pay-as-you-go (PAYGO) public pension systems. Retirement pensions have become a serious fiscal concern in most industrialized countries. Pensions are largely paid for from tax revenues and it is foreseen that contributions will need to be raised substantially during the coming decades.The World Bank (1994) states that high taxes are harmful to economic growth, since they reallocate resources to the informal sector, thereby reducing output in the more efficient formal market sector of the economy. The reasons are that many people are now nearing retirement age and that the populations nowadays live longer and have fewer children than in the past.Nicholas Barr (2001) argued that the effect on funded schemes is more restrained but equally unavoidable. When a large generation of workers retires, it liquidates its financia l assets to pay for its pensions. If those assets are equities, sales of financial assets by the large pensioner generation will exceed purchases of assets by the smaller younger generation, leading to falling equity prices and, hence, to lower pensions. Alternatively, if those assets are bank accounts, high spending by the large pensioner generation will generate inflationary pressures and again reduce the value of pensions.Domestic savingsThe main views of the life-cycle theory stipulate that individuals try to smooth consumption over their lifetime, Brumberg and Modigliani (1954). Normally savings follow a hump shaped pattern, that is, income is relatively low when individuals are either very young or retired as during their working life savings rate is higher .Ageing Population increases the proportion of households with a relatively lower savings rate in the economy which leads to a decrease in private savings. Estimates of the impact of a change in the age structure of the pop ulation on private savings, shows that population ageing will be likely to reduce savings.As regard to public savings, population ageing is likely to exercise considerable pressure on public finances, Weil (2006). In the situation of the pension schemes of the current pay-as-you-go pension schemes that exist in many states, an ageing population implies that the number of beneficiaries increases while the number of contributors to the system decreases. The ageing population will also adversely affect public finances through higher healthcare and long-term care costs, given that older populations are more likely to make use of healthcare facilities, which, to a large extent, are provided by the public sector.Both microeconomic and macroeconomic studies find that the observed age profile of saving generally conforms with the life-cycle model, which implies that saving rates rise over a workers active career and then decline in retirement. Compared with macroeconomic analyses, microecon omic studies tend to show smaller variation in saving rates over the life cycle, this may be of the highly skewed distribution of wealth and saving across households, Ralph C. Bryant (2004).At a micro level, company or other obligatory pension funds can implement enforced saving by deferring wages and salaries, thereby reducing risk of a low replacement ratio. At a macro level, the increase in saving is not usually one-to-one, as increased contractual saving via pension funds is typically partly or wholly offset by declining flexible saving, E Philip Davis (1995).The remaining effect most likely results from liquidity constraints on some individuals (especially the young), who are unable to borrow in order to offset obligatory saving via pension funds early in the life cycle. It can also be anticipated that, even in a liberalized financial system, credit constraints will affect lower income individuals particularly severely, as they have no assets to guarantee and also have less sec ure employment. Therefore forced pensions saving will tend to increase their overall saving particularly markedly, Bernheim and Scholz (1992). On the other hand Samwick (2000) found a lower rate of saving in countries with extensive PAYG systems. Agosin (2002) extended their analysis and shows that the rise of saving was concentrated in the business sector, and that the net change in household saving was small.Implications for equilibrium real interest ratesThe forecasted declines in savings make the expected consequence of ageing on the equilibrium real interest rate ambiguous. If investment falls faster than domestic savings at each level of aggregate income, the real interest rate that clears the market for loanable funds is expected to fall, since it is difficult for savers to find profitable investment opportunities, J.C. Trichet (2007). On the other hand, if domestic savings were to fall faster than investment then the real interest rate would rise to reflect the relative scar city of financial funds.This likely decline in interest rate that equalizes savings and investment could be identified developed financial markets. Even though the actual impact of the evolving demographic structure on the equilibrium real interest rate in the capital markets is something that is going to occur with a considerable lag, some economists have suggested that expectations of such developments may have already started to exert some influence on the pricing of bonds. Among other things, these analyses suggest that ageing could have contributed to the flattening of the yield curve that has been observed over the recent past, J.C. Trichet (2007).However as it is based on the assumption that capital market participants are perfectly forward looking, an assumption which is questionable, it should be treated with a great deal of caution if it is true that financial markets tend to overreact to short term phenomena, the effects of ageing on the yield curve could be limited, Dell aVigna and Pollet (2005).It has to be taken into consideration that these quantitative simulations require a number of qualifications. On one hand, some real world factors may make the true decline in the equilibrium real interest rate larger than estimated in macroeconomic models. For instance, older people may save more than predicted by the life cycle theory as they may want to leave a bequest to their children, putting further downward pressure on the equilibrium rate. The degree of risk aversion may also change with age as if the older people were systematically more risk averse than the young one, the accumulation of precautionary savings would lead to a higher than predicted savings rate and a lower than predicted real rate, Bakshi and Chen (1994).Moreover private savings rates may be significantly affected by pension reforms, Miles (2002).Pressures on PricesHans J Blommestein (1998) states that concerns have been expressed that the growing demand for high quality private sec urities like equity and corporate bonds, associated with the growth of advance funded pension systems in search of investment opportunities (thereby increasing the demand for financial assets) and falling public sector borrowing requirements (thereby reducing the supply of government securities), would put strong upward pressure on the prices of financial assets. Here, the combination of the widespread privatisation of state owned enterprises and reform of pension systems brings the opportunity of killing two birds with one stone. Pension reform, which would increase the demand for equity, and privatisation, which expands the supply, at the same time permits a more balanced growth in private securities markets, at least over the medium term. In a somewhat longer term perspective, population ageing may have an impact on the risk premium, that is, the difference between the returns on stocks and the yield on bonds.As asset preferences vary across age groups, the ageing of the baby boo m generation could affect both absolute and relative positions of stock and bond prices. On average, middle age is the portion of the life cycle when saving rates are highest. Moreover, middle aged workers generally are more able and willing to hold a riskier portfolio that is, one weighted more heavily towards stocks than bonds.This is a consequence of two factors first, while still working, a stockholder is better able to make up for any bad equity returns second, middle aged workers have a longer time horizon and thus are willing to accept more risk in exchange for the expectation of higher returns. Moreover, higher demand for stocks relative to bonds should increase the price of stocks relative to bonds, thus decreasing the equity premium. Thus, some have hypothesized that an ageing population would cause the equity premium to increase. But if the age of the population is increasing at least in part because life span is increasing, and thus time horizons are lengthening, then th e ageing of the population does not necessarily imply that average risk aversion should be increasing and risk premium on stocks should be rising.After the baby boomers begin to retire, saving rates would tend to fall, stock and bond prices to decline, and the equity premium to rise as baby boom retirees shift their portfolios away from stocks toward bonds, Hans J Blommestein (1998).Population age structure can influence the demand for different classes of financial market assets both because of its effect on saving and because young, middle aged, and elderly savers may seek to hold their assets in different forms. Empirical studies have uncovered evidence that population age structure affects stock market prices and the real returns of different classes of financial assets, but the consistency of this evidence is not overwhelming. It is unclear whether the effects of demographic influences on asset prices and returns are large relative to the effects of other and less predictable d eterminants of prices and returns, Ralph C. Bryant (2004).Implications of population ageing for the conduct of monetary policyThe life-cycle theory stipulates that , individuals during their working lives accumulate financial wealth in order to finance their consumption during retirement. As a consequence, populations who are near to retirement age will tend to have higher wealth to income ratios.Simultaneously, expected imbalances in publicly financed pension schemes make it possible to consider that the increasing number of retirees would depend more on their own accumulated wealth, as opposed to public pension provisions, to maintain their consumption levels. Consequently, the fraction of the population exposed to asset price fluctuations could increase with ageing, Young (2002). Bean (2004) argues that longer life expectancy would presumably strengthen this effect.Therefore, the transmission channel of monetary policy may be affected by ageing. In particular, the so called wealt h channel, which links asset prices to consumption, may gain relative importance and play a vital role than in the past, G10 (2005). Miles (2002) points out that the monetary policy multiplier would probably rise with population ageing, mainly as a result of the increased wealth channel and greater price impact of monetary policy decisions. In spite of this, he also mentions that an older population is less likely to be credit constrained, especially when the pension system is reformed towards more funded systems. This might reduce the effectiveness of the credit channel. Depending on the relative importance of these channels, monetary policy could, in principle, become more or less effective with ageing. Miles suggests that the first effect is expected to dominate.A move towards demographic structure in which the population accounts for an increasing elderly population is expected to generate a gradual but persistent change in savings habits. This may results in an impact on the de mand for all classes of assets even though certain sector of the capital market are likely to be affected more substantially than others. If, for example, older people are more risk averse and prefer to hold financial assets paying fixed income returns such as government securities, then the demand for government bonds would tend to increase relative to riskier investment options, such as equity, Bakshi and Chen (1994) and De Santis and Lhrmann (2006).In this situation, where a larger part of households wealth is invested in nominal assets, price stability would be even more important for households, G10 (2005) and Bean (2004). Stable prices ensure that the real value of both pension entitlements and savings is maintained and prevent arbitrary redistributions of income and wealth to the detriment of the most vulnerable groups in society, in particular, pensioners. It is likely that, as a significant fraction of wealth is accumulated in real estate and financial assets, households ex posure to asset price movements will tend to increase.This might coincide with a situation in which a large fraction of the population in their old age dis-saving phase are disposing assets in order to finance consumption during retirement. In this respect, some authors have warned that, when the baby-boom generation retires and starts to dissave, excess supply in financial markets could lead to a significant decline in asset prices, the consequences of which might be felt by the entire population, Siegel (1998), Abel (2001) and (2003). This view is known as the asset meltdown hypothesis. Yoo (1994) estimated that asset prices may drop by as much as 15% as a result of demographic change alone. This is why a credible commitment to maintaining price stability and, as a reflection, an orderly financial environment is and will remain so important for maintaining the standard of living of people, particularly for the poorest and the most vulnerable.Investment of Pension FundThe rapid gro wth of pension funds in many countries, and the stimulus they are providing to the growth of capital markets, both suggest that their activities as financial intermediaries merit considerable attention, E Philip Davis (2000). Pension funds have an impact on the stability of financial markets in several ways, most significantly through their investment behavior.Since early withdrawal of funds is usually restricted or forbidden, pension funds have long term liabilities, allowing holding of high risk and high return instruments. Accordingly, monies are intermediated by pension funds into a variety of financial assets, which include corporate equities, government bonds, real estate, corporate debt (in the form of loans or bonds), securitised loans, foreign holdings of the instruments mentioned above and money market instruments and deposits as forms of liquidity.Hellwig (1990) suggest that financial institutions can form long term relationships with borrowers, which reduce information a symmetry and hence moral hazard. Apart from economies of scale these considerations have arisen in the literature mainly for debt finance and for banks. Whereas the importance of information asymmetries and incomplete contracts is equally recognised for equity finance, the role of financial institutions as counterparts is less well developed. Equally, institutional investors such as pension funds may not rely on the same information and control mechanisms as banks.The role of pension funds is clearly not to facilitate exchange of goods, services and assets directly. This is because, unlike banks, money market funds, and to a lesser extent long term mutual funds, they do not offer liquid liabilities. Nevertheless, pension funds have had an important indirect role in boosting the efficiency of the financial systems, by influencing the structure of securities markets. This effect on micro structure links to their demand for liquidity, i.e. to transact in large size without moving the p rice against them, anonymously, and at low transactions costs.Pension funds provide risk control directly to households via the forms of retirement income insurance they provide, an advantage which largely reflects the unusual (among financial intermediaries) link of pension funds to employers. To assist in undertaking this risk control function they diversify assets as noted above and also act in securities and derivatives markets to hedge and control risk. As institutional investors, pension funds are well placed to use derivatives and other means of risk control many innovations have been introduced or developed specifically to cater for their demand (Bodie 1990b, 1999).E Philip Davis (1995a) suggests that as pension funds focus mainly on government bonds and high grade corporate bonds, while banks tend to monopolise small business financing. And Lorenzo Bini Smaghi (2006) states that investing wisely matters for long term economic wellbeing, and that the portfolio allocation dec ision is of paramount importance in order to maintain living standards in the old age.Pension funds are the fastest growing of all financial institutions. They now cover half the labor force and represent one-eighth the financial assets of the entire household sector, Vincent P. Apilado (1972). The size of pension funds has also had an impact on the structure of financial markets countries with large funded pension schemes tend to have highly developed securities markets in countries with small pension-fund sectors, capital markets are relatively underdeveloped (the equity market in particular, Hans. J. Blommestein (1998).Living StandardM.PONDS(2003) states that the raison dtre of wage indexed defined benefit pension funds is to provide insurance against standard of living risk after retirement, based on intergenerational risk sharing. Pension funds necessarily have to accept mismatch risk in providing this kind of insurance. Mismatch risk taken by the pension fund is risk for the f unds stakeholders.The material living standards of tomorrows working and retired people will depend on the goods and services produced by those who will be working at the time. Changes in retirement income financing might alter the relative living standards of workers compared with retirees, but only later retirement could have a large effect in increasing living standards for both, Peter Hicks (2004).O

Starting Or Running Your Own Business Commerce Essay

Starting Or Running Your Own Business Commerce analyseStarting or running your ingest line of credit is a very big task,running your own crease is also challenging ,interesting ,rewarding, exiting and fulfilling indeed its is also baffle ,exhausting, f make upening and tricky. An enterpriser is who organizes and manage a handicraft concern taking risk for the sake of profits with skills to operate a furrow Entrepreneur is a person who willing to take risk with his notes to fare money. The skills need for the 21th century entrepreneur. He should be a self - fiter, willing to turn tail hard, he should give way a ability to handle uncertainty. Having self -discipline .All and above the risk tolerance its very important. Entrepreneur is prepargond for fresh approaches, come up with crazy ideas that whitethorn just work. The competencies on which the 21th century Entrepreneur shake off to focus. Entrepreneur has to recognise that the risk taking means is to try manything bare-ass. For entrepreneur networking is the key bloodline line action from which you can provide information, collaboration, expertise and gross sales .entrepreneur buzz off a strategic trusting in a sense the value of planning process and to endorse the opportunities. Entrepreneur builds trust and relationships with the nodes and also generates high level of customer service and come up with customer expectation. The biggest challenge for an entrepreneur is the current global economy.Entrepreneurs who harbour tried and failed are part of the risk taking economy,But it is not necessary to accept the current failure rate as normal tooshie BaldwinThe entrepreneur should be an commercial enterprise minded and he should reserve a good understanding of how to run an logical argument, then entrepreneur should welcome a unconditional attitude and he should be a self starter being an entrepreneur you have to make a big termination regarding advertising, what is your product and who are they best suited In this assignment its shows the skills and competencies for 21th century entrepreneur .In this assignment successful I had an interview with MR Ben who own a come with fare a I AM SOLD the question ask him about the backbreakingies and pressure in running own business and also the skills should have for new entrepreneur. Mr BEN company started in year 2009 .it is successfully running then .the company I AM SOLD is basically a real estate business .this business was started by Mr. Ben now he have four shareholders for his company. By seeing the success of the company we can that the company will have a groovy futureCritical evaluationTo get business ideaThere is lot of business ideas around us. Business ideas are mostly come by and by analysing the trade and customer needs if your want to open a new business and you want to get a idea for that you have to examine your own skills first to open a business you have to focus on area on which you are g ood. You have to be ready for business opportunities you have to observe the market closely read the business news daily, to get a new idea for business you can ask the peoples what they want.Business syllabusFor starting a new business it is necessary we should have a business plan. Business planning play a vital for starting a new business or growing your business, there are many types templates and variations of an business plan is exits,you have to choose the right one for your purpose ,having an business knowledge is a separate issues .you have to create a well executed business plan to get succeed in your business .you should have good business plan so that investors are willing to invest in your business.Self-MotivationMotivation is processes, this process is influences from families and friend barely when speaking about the entrepreneur they have the self motivated and get succeed. Self motivation plays a major role in starting a new business for an entrepreneur. You have to motivate yourself that you can do it. You must always think positive. You should be self-starter with a clear desired goal in mind. You should have an self convinced(p) on you and yours ideas.Customer servicesIts very important to attract customer for your business, for that your customer services should be excellent and with many option available .your is freeing to succeed if only when you treat your customer properly. For attracting more customers you have to run a promotional schemes .the most important part is to resolution customer queries quickly. if you reply customer late then it will creates negative impression on customer.Marketing StrategyYou should have a good selling strategy if your merchandise strategy is good you not face any problem to attract customers .you should have a unique marketing strategy .you should not copy from your competitors. Because if your marketing strategy is same or copied of your competitors then your market reputation is going to suff er and youre going to lose your customer. The basic marketing strategy is to is to understand your customer need and develop your marketing planning on surrounding of those needs. Spend more time in researching and creating strategic for marketing plan. You have to spend some time on your previous customer Its is important when you spend money on marketing you should forget to create a way to track those marketing efforts.Investors for your businessThe toughest job for the entrepreneur for starting a new business is to find investors. There is a lot of peoples who can invest in your business, but some of then have combination of understanding, the investor should have investment focus and risk tolerance to be your investors. You have to find potential investors and you have inspire the investors to risk their money your business. Investors are chiefly focus on how money you new to start your business and expected rate of return will beTime managementTime management is very importa nt in your business, time management is very difficult task for an entrepreneur. You have write describe of things your are going to do in dairy its should be in order ,you have to make a schedule for everything you have to do ,after come to an end of that work you have to ticked off so that it will become easy to know what you have done and what else you have to do. You have to make a posterior far days and weeks and you have try to achieve them. Dont have to waste time for making decision. Take less time for any process. Working in a team will save the time.Biggest challengesFor starting a new business the challenges are mainly depends upon the business.The things come on your mind tight economic time. To find a right business in the market The biggest challenge is to got investors or adequate capital for your business To get legal brand stir for the company. To get a require permits from, the governments To get well skilled employees. To do market survey and scope of work To attract the customer to buy your product. defy Out From Your CompetitorsFor running a successful business you have to get over your competitors, for you have to know your competitors for that you have to try something different from other. Company mainly have to focus on best customer service .you have to make strong relation with your prospect then other competitors do. You have to utilise different marketing strategies from other competitors. You have to create a free irresistible offer so that shows your prospect and show then how well you understand their problems and solved then. Offer discounts and free consultationFinance for your businessThe most important part for starting business is how you are going to finance your business .first you have to know about how much money you need to start a business there different recourses to get the required money for your business. any you can take a loan from bank or you can go by investment finance, to get a investors for your busi ness. Who will invest their money for your business or else if want to finance through your family and friend .I spoke MR Ben who finance his business by borrowing Money from friends and familyFinanceYou are started this business to make money, thats why its very important for you to handle your money well, this includes by knowing how to do a limited start-up .spending your money only when you needed and making to do with the equipment and the supplies you have .you to got to know the best pricing structure for your business in order to get best kind of return from your product. If you manage your hard currency flow well then your business will start to run then you will be able to survive the up and down of the market the important thing for you to focus on bottom line. You should ask your self for every spending for each and every step of your business you have to think positively.Handle tough business decisionsIn our lives and businesses we make lot of decision but some decisio ns are can be stressful. Because of some decisions involved money, resources and our reputations. When you had to make a tough business decisions you have immediately focus on resolution. You have to concentrate on the present task and try to generate a flexible solution. Dont take your decision to fast, take a deep breath, clear your mind and think positive, consult with co leaks and take the right decisions.ConclusionThe results of several(a) researches regarding entrepreneur skills for 21th century and the pressure and complexities associated with running a small business has been shown in this assignment. After having an interview with MR BEN from I AM SOLD I came to know that the entrepreneur should have The entrepreneur should possess with self motivation because if an entrepreneur is self motivated he can face any tough internet site very effectively. It is very important for you to focus your work and energy in each and every step to make your business successful. For an e ntrepreneur most difficult part is to manage time, to overcome that we should maintain a dairy with schedule what you have to do. You should have a business knowledge and skills for starting a new business .you have to your ability on which field your are good at If you are the entrepreneur then its your job to know what type of sales you prefer and what types of services you can provide for the customers. As an entrepreneur you should have an ability to take risk .because without taking risk you cant be successful. As an entrepreneur you should maintain your cash flow, because your business ear money and finance play a very important role in your business. For handling taught decision you should not take decision too fast, you have to concentrate on it first for solution. The main thing on which MR BEN is more focus is on work hard, to get success in your business. If you want to be success entrepreneur then should be work alone you should not depend on anyone and you should have s elf confident on you for handling tough situations.REFRENCESRachel bridge. (2008) You can do it too. Kogan Page LtdOnline.Availableathttp//www.powerhomebiz.com/vol69/entreskills.htm (Accessed 4/22/2010).Starting a business in minneapolis a practical guide Online.Availableathttp//www.ci.minneapolis.mn.us/cped/docs/starting_a_business.pdf (Accessed 4/05/2010).Starting a new business Online.Availableathttp//www.ador.state.al.us/taxpayerassist/newbus.pdf (Accessed 4/20/2010).Online.Available at http//www.rjmartino.com/2005/08/28/three-biggest-challenges-for-small-business/ (Accessed 4/05/2010).Online.Available http//www.entrepreneur.com/ask/category14.html (Accessed 15/04/2010).Online.Available http//www.smallbusinessbible.org/how_bring_customers.html (Accessed 20/04/2010).Ian hunter (2005) Risk ,persistence and focus A LIife cycle of an entrepreneur,Australian economic history review ,vol 45 Available online http//wf2dnvr16.webfeat.org/oNuDO1172/url=http//www3.interscience.wiley.com/c gi-bin/fulltext/118682522/PDFSTART?CRETRY=1SRETRY=0 (Accessed 8/05/2010).Online.Available http//www.morebusiness.com (Accessed21/04/2010).Online.Available http//www.zeromillion.com/business/starting/entrepreneur.html (Accessed8/05/2010).ANNOTED BIBLIGRAPHYRachel bridge. (2008) You can do it too. Kogan Page LtdIn this book the author shows you can do it too means you can also be an entrepreneurStarting a business in minneapolis a practical guide Online.Availableathttp//www.ci.minneapolis.mn.us/cped/docs/starting_a_business.pdf (Accessed 4/05/2010).In this one the author shows the steps to follow to start a new business and how can your business be sucessful.Ian hunter (2005) Risk ,persistence and focus A LIife cycle of an entrepreneur,Australian economic history review ,vol 45 Available online http//wf2dnvr16.webfeat.org/oNuDO1172/url=http//www3.interscience.wiley.com/cgi-bin/fulltext/118682522/PDFSTART?CRETRY=1SRETRY=0 (Accessed 8/05/2010).I this one the athors shows the risks the entrepreneur faceses and how the entrepreneurs come throught from thatStarting a new business Online.Availableathttp//www.ador.state.al.us/taxpayerassist/newbus.pdf (Accessed 4/20/2010).In this book the author show the basic steps for stating a new business ,the thinks we have to remember before starting a new business .Online.Available http//www.smallbusinessbible.org/how_bring_customers.html (Accessed 20/04/2010).I this one its shows how to attract the customers to buy your products the Marketing StrategyOnline.Available http//www.entrepreneur.com/ask/category14.html (Accessed 15/04/2010).I this one its the question ask for a entrepreneur when starting a new business .Questions for an entrepreneur1. Why did you start this business?2. What inspired you to start this business?3. How and where did you get this idea for a business?4. What makes this business stand out from the rest?5. How did you finance the business?6. What are your most significant products or services?Whats your st rategy for getting and keeping profitable customers7. How difficult was it to get investors? How did you find investors for your business?8. What are your marketing strategies for this business?9. How you manage your finance?10. How are you managing your time?11. How do you handle tough business decisions?12. What was the most difficult part of starting the business?13. What are your expectations for the future with regards to this business?14. What advice would you give an entrepreneur starting out today?15. .How did you know it was the right idea?16. What is the worst experience youve had as an entrepreneur?17. What are the biggest challenges you face now?18. How have sales grown in the last few old age19. What has been your most effective marketing tactic or technique?20. What possibilities or opportunities do you see for your business in 2011?21. If you were to start a new business today, what would it be?

Care Theory for Adults With Learning Disabilities

C atomic number 18 Theory for Adults With Learning DisabilitiesCritically discuss c ar theory in tattle to genial work with full-growns with reading disabilities.Social work has undergone a radical transformation in the last two decades. Today ideas ab place the multi-layered nature of disabilities and the complexness of needs atomic number 18 commonplace in the public discourse on welfare and companionable work. People with learning disabilities and their carers and families make water formulated their urgent demands upon beau monde while academics and practitioners have financial supported this re-shaping of the social care agenda and the political sympathies has attempted to integrate the various challenges and interests in new and signifi enkindlet policy keep such as Valuing People (2001). This essay leave behind deal with three interrelated issues that are of particular importance to people with learning disabilities and their quality of life. It will (1) explore th e relationship between care theory and the issues of ethical serve when dealing with adults with learning disabilities. It will look at the rules of engagement that have tack their way into the various codes of exercising for social work practitioners and the ethical problems that they may give rise to. And (3) it will consider the link between anti-discriminatory practice and the rights that receipts clients have and how these rights may influence the way in which practitioners may discharge their responsibilities without the social service sector.Within the confines of this essay, (1-3) will be examined through the following lens. Given the existing code of practice and policy stipulations, what could self-government mean for people with learning disabilities? And how do ethical difficulties find their expression in particular practices of social work for adults with learning disabilities, such as person-centred planning and direct payments.There have been several attempts t o regulate and standardise work practice for employees and employers of social work practitioners in the UK. These attempts have deep historical roots, such as the Hippocratic oath (Loewenberg 1992 36). Yet the more recent attempt by the sparing Councils to draw up a conclusive list of responsibilities and duties of social workers and their employers has been triggered by the desire to introduce reliability and transparency into a field of social care which has hitherto featured a plethora of practically conflicting norms and standards. The code of practice sets out (for the prototypic time) the expectations, obligations and duties under which social workers and their employers ought to operate. It is reckond to be the initial step in a broader mold of standardisation of the social services (Codes 2001 13). It echoes the definitions of the nature, aims and guiding principles of social work given in the Code of dedicate by the British Association of Social Workers (BASW 1986 an d Codes 2001). The various values that inform social work are human dignity and worth, social justice, service to worldly concern and integrity and competence of practitioners (BASW and CoP) In particular, the Code emphasises the right of one-on-ones to control their lives and the obligation of social workers to promote the right to self-fulfilment by clients (Codes 2001 15 and BASW 1986 2). This agglomeration of values and norms that ought to inform social care practice however raises some serious questions when it comes to their application in the social work with people with learning disabilities.First of all, it is generally acknowledged by analysts of the service as well as by practitioners that the particular interpretation of the notion of self-determination is a culturally contingent idea. Loewenberg as well as Watson acknowledge that the ethical principles and rules of social work are derived from societal norms (Loewenberg 1992 38 Watson 1985 22). However, modern societ y encompasses a multitude of often conflicting social norms and it is this the great unwashed of notions of a good life and standards of social agency which creates problems. The code explicitly urges social service professionals to take account of their clients understanding of self-determination and individual independence. Yet, within a culturally diverse population, different notions of what is acceptable and desirable with respect to the independence of people with learning disabilities prevail. To promote independence of an adult or child with learning disabilities in a community that traditionally places a fundamental emphasis on continuous care within the family can pose a particular dilemma to social workers.More generally, however, governmental policy and the codes of practice can produce significant problems for social care workers. The government has made inclusion one of the main policy priorities with regard to people with learning difficulties. Mainstreaming employme nt for individuals with learning disabilities is a pillar of this new approach. However, the competitiveness of the graduation labour market has traditionally represented a considerable barrier to finding viable employment for people with learning disabilities or emotional demeanor problems. Social care workers are tasked to identify problems that impact on the quality of life and decrease the chances of self-fulfilment for their clients. But often they are neither trained nor have access to resources in order to identify and put in place support programmes that ensure that adults with learning difficulties can find employment in the first labour market. The compartmentalisation of services continues to produce additional barriers that prevent social care workers from discharging their duties with regard to their clients.Let us consider an example. Let us suppose that a social worker has the responsibility to support some individuals with learning disabilities which live in group homes (Beckett 2005 138). One of the residents approaches him and tells him that she has got into a muddle with her benefits with the result that she has draw and quarter out of money and is very distressed about this. The social care worker calms her down and places some phone calls to the local benefits office and sorts it out for his client.In a way, the social workerhas respected the clients wishes and done exactly what she asked of him. Has he therefore supported her right to determine her own life? (Beckett 2005 138)His freight to support her desire to self-determine her life here clearly conflicted with her desire to draw on needed support. The real crux of the problem however lies elsewhere. The client has been inefficient to get fit support from the benefits office and therefore felt unable to sort out the issue on her own. In fact, the lack of adequate support on the side of the benefits office, possibly the absence of a trained worker in the office who has the skills and training to deal with people with learning disabilities has made it unattainable for her to deal with it independently. Additionally, the social worker may have chosen to limit his support by assisting her in dealing with the benefits office rather than sorting it out himself. In this way, policy and practice may substantially collide when it comes to practical issues for individuals with learning disabilities. The codes of practice fail to give any meaningful guidance in these cases.This criticism is not new. Academic observers have repeatedly noted that the codes of practice are too abstract and cease to have any meaning unless sufficient resources are made available to enable service professionals to act in a positive way towards service clients (Watson 1985 31). More worryingly, Watson writesthe abstraction of the code of practice renders principles not simply incapable of application, but capable of application in a number of ways only some of which are consistent with th e caprice of professional social work. (Watson 1985 31)Again, this gives rise to some serious problems with regard to care for people with learning disabilities. Let us consider anformer(a) example. The conception of self-determination as enshrined in the Codes of Practice draws on culturally contingent notions of autonomy. On the other hand they also pay respect to the need to recognise other cultures diverse social commitments. The code however fails to recognise that these two principles conflict. For some families and carers who belong to ethnic minorities, service support may be seen as contradicting cultural norms and standards and the family may be the preferred vehicle for support. Societal inclusion and integration in the wider community may therefore be nix as an option. Social workers are in a dilemma here. It is their obligation to promote the self-determination of their clients, this however may contravene the cultural and religious norms rife in some families. This demonstrates that the Codes of Practice are based on an understanding of social life that is predominantly Western in character. Different stipulations of the Code are therefore inconsistent with each other. As Beckett writes, the notion of individual autonomy may be differently stressed in the various cultures (Beckett 2005 132), Often the rights of individuals with learning disabilities may run counter to the interests of the rights of particular groups or communities (Beckett 2005 132).The second way of framing the idea of social care and its conflict with particular practices is utilitarian in nature. Social workers and their management may be led by calculations of expediency in determining the right way of dealing with problems of people with learning disabilities. preference allocation and cypher constraints are the primary factors in these considerations. This approach is however often detrimental to the interests of adults with learning disabilities. Their interests are d efined through the limitations and budgetary restrictions that are placed on the service. The individual with learning disability is not placed at the centre of planning and support packages.One particular practice has essay to square the constraints placed on the service with the ethical demands under which social workers operate. Direct payments have been actively promoted by central government and are often seen as a way to empower clients with learning disabilities. They are considered as an appropriate means to re-focus the delivery of social services on the needs of the individual with learning disabilities as well as represent a viable answer to the resource allocation problem. Clients are granted a particular budget and exercise total control over its spending. Adults with learning disabilities become buyers in a market of social and care services, or so the theory goes. At a first glance this will alleviate several acute problems. It enhances the (chances for) independence of clients and motivates them to make their own choices about important life decisions. It increases their participation in the decision making process and improves quality of life. It also effects a significant shift away from total care packages which are expensive to the taxation payer and facilitates the involvement of clients in more task-centred care packages which are less expensive (Mansell 2005 20). It therefore adequately and neatly addresses resource constraints while mirroring the move to tell care and support plans (Mansell 2005 20). This way it mirrors the stipulation of the Code of Practice which places the duty on social workers to maximise participation of clients in the decision making process (BASW 1986 5 Codes 2001 16).However, it works with a very lop-sided notion of independence. While participation in the labour market may still be prevented to clients with learning disabilities, playacting as a buyer in an economic relationship is seen as a form of empowe rment. The conception of social agency is severely restricted to co-operative schemes that are economic in character. The enhancement of social involvement may benefit little from this. This demonstrates that ethical issues in social work are often critically influenced by practices that are understood to reflect universal cultural attitudes but, more appropriately, may only resonate with erroneous and impoverished notions of social agency.BibliographyBeckett, Chris and Andrew Maynard (2005), Values and ethical motive in Social Work. An Introduction. London e.a. SageBritish Association of Social Workers 1986, A Code of ethical motive for Social Work, Birmingham BASWCodes of Practice for Social Service Workers and Employees (2001), Scottish Social Services Council, Dundee 2005Loewenberg, Frank M. and Ralph Dolgoff (1992), Ethical Decisions for Social Work Practice, Itasca F.E. PeacockMansell, Jim and Julie Beadle-Brown (2005), Person Centred Planning and Person-Centred Action. A Crit ical Perspective, in Person Centred Planning and upkeep Management with People with Learning Disabilities, London and Philadelphia Jessica Kingsley, pp.19-33Watson, David (1985), Whats the point of A Code of Ethics for Social Work? In A Code of Ethics for Social Work. The Second Step, edited by David Watson, London e.a. Routledge and Kegan Paul, pp.20-39Valuing People (2001). A New Strategy for Learning Disability for the twenty-first century, London The Stationary might

Cherokee Indians Essay examples -- History Indians Native Americans Es

Cherokee Indians The Cherokee Indians were one of the civilized tribes in the United States. They were located in the southeasterly break away of the U.S. This includes the western take leaves of North and South Carolina, The northern parts of Alabama and Georgia, Southwest Virginia and the Cumberland basin of Tennessee. It appears the Cherokee settled in 1000 A.D. to 1500 A.D. Their develop workforcet took organise in two stages or phases. The Pisgah which took place 1300 A.D. to 1540 A.D. and the Qualla which took place 1540 A.D. to 1750 A.D. The first period was primitive and the second was influenced by European contact. They were a large tribe that was part of the Iroquian oral communication group even though their language is very different. Despite this the Cherokee developed written language due to contact with the white men. They were very kindle in learning the white men ways. Although there is a lot written about the Cherokee and Europeans, the focus here will be Cher okee life including day-by-day life, marriage, government, and war.Cherokee colonys consisted of groups of relatives that include members of at least four clans. They grew crops outside their villages. There were also some fields inside the villages. Each family had a marked section of the field. two men and women helped in farming every section. As with many tribes the men were creditworthy for hunting, fishing, building houses and council lodges, made important decisions, performed religious ceremonies, trained young boys and defended the village. The Cherokee women were responsible for the home, ski tow the children, helping in the fields, preparing and gathering food, washing and making clothes, and making baskets and pottery. level(p) though The Cherokee were a matrilineal society only certain women were allowed to live input in council decisions. The Cherokee had many rules and regulations to live by and since they have a strong sense of tradition these rules were non challenged until they came into contact with the European. An example would be women were not allowed to get married until they had their first menstruation. During a young womans menstruation she is separated from her family and taken to a special place outside of the village where she cincture for septenary days. No one is allowed to touch her because she is believed to be unclean. Even she can not touch her birth food therefore another w... ...g the warriors not to be mysophobic for God would help them if they trusted him. A priest would pray and the war party would set out.After returning home from battle, the warriors stayed at their own village council houses for twenty-four days. During this time they went under intense purification rituals before returning to their families. Being given a new name honored warriors, who fought intumesce in battle. The new name usually gave them new status in the village. Cherokee life is full of traditions that helped the tribe survive as long as it has. Even though they have been separated, the Cherokee still have a strong sense of being. There is so much more to learn about the Cherokee Indians and their cultures that it will be a while before it is all revealed.BibliographyMails, Thomas E. 1992 The Cherokee People Marlowe and company Mooney, James 1891 Sacred Formulas of the CherokeesStarkey, Marion 1946 The Cherokee Nation, New YorkSteele, Phillip 1974 The last Cherokee Warriors Pelican publishing companyWilkins, Thurma 1970 Cherokee disaster London, The Macmillan familiarityWoodward, Grace Steele 1963 The Cherokees, University of Oklahoma press. Cherokee Indians Essay examples -- History Indians Native Americans EsCherokee Indians The Cherokee Indians were one of the civilized tribes in the United States. They were located in the southeastern part of the U.S. This includes the western parts of North and South Carolina, The northern parts of Alabama and Georgia, Southwest Virginia and the C umberland basin of Tennessee. It appears the Cherokee settled in 1000 A.D. to 1500 A.D. Their development took place in two stages or phases. The Pisgah which took place 1300 A.D. to 1540 A.D. and the Qualla which took place 1540 A.D. to 1750 A.D. The first period was primitive and the second was influenced by European contact. They were a large tribe that was part of the Iroquian language group even though their language is very different. Despite this the Cherokee developed written language due to contact with the white men. They were very interested in learning the white men ways. Although there is a lot written about the Cherokee and Europeans, the focus here will be Cherokee life including daily life, marriage, government, and war.Cherokee villages consisted of groups of relatives that included members of at least four clans. They grew crops outside their villages. There were also some fields inside the villages. Each family had a marked section of the field. Both men and women helped in farming every section. As with many tribes the men were responsible for hunting, fishing, building houses and council lodges, made important decisions, performed religious ceremonies, trained young boys and defended the village. The Cherokee women were responsible for the home, raising the children, helping in the fields, preparing and gathering food, washing and making clothes, and making baskets and pottery. Even though The Cherokee were a matrilineal society only certain women were allowed to have input in council decisions. The Cherokee had many rules and regulations to live by and since they have a strong sense of tradition these rules were not challenged until they came into contact with the European. An example would be women were not allowed to marry until they had their first menstruation. During a young womans menstruation she is separated from her family and taken to a special place outside of the village where she stays for seven days. No one is allowed to tou ch her because she is believed to be unclean. Even she can not touch her own food therefore another w... ...g the warriors not to be afraid for God would help them if they trusted him. A priest would pray and the war party would set out.After returning home from battle, the warriors stayed at their own village council houses for twenty-four days. During this time they went under intense purification rituals before returning to their families. Being given a new name honored warriors, who fought well in battle. The new name usually gave them new status in the village. Cherokee life is full of traditions that helped the tribe survive as long as it has. Even though they have been separated, the Cherokee still have a strong sense of being. There is so much more to learn about the Cherokee Indians and their cultures that it will be a while before it is all revealed.BibliographyMails, Thomas E. 1992 The Cherokee People Marlowe and company Mooney, James 1891 Sacred Formulas of the Cherok eesStarkey, Marion 1946 The Cherokee Nation, New YorkSteele, Phillip 1974 The last Cherokee Warriors Pelican publishing companyWilkins, Thurma 1970 Cherokee Tragedy London, The Macmillan CompanyWoodward, Grace Steele 1963 The Cherokees, University of Oklahoma press.

Computers and Their Impact :: Technology Papers

Computers and Their Impact The extreme increase in the use of computers has drastically changed the lives of many people. Computers, as Sherry Turkle in Who Am We discussed, initially were used as simple calculators, but through the years they have come to be valued as more than simple machines (442). The computer has gained new qualities, it is not simply used as a calculator, but now it entails simulation, navigation, and interaction (443). With the increase in computer usage, comes new software that attracts peoples attention even more. Adults, adolescents and even children come themselves losing track of time when they sit down and play on the computer for half an hour and suddenly realize that thirty minutes has turned into a couple of hours. As changes occur in technology, we must also contemplate the effect these changes will have on individuals. We must realize that individuals are conquerable to the virtual world and that they can get lost. Our need for a practical philos ophy of self-knowledge has never been greater as we struggle to make meaning from our lives on the screen (456). The computer can serve many purposes, such as an aid for research, finishing homework and even as a means for property in touch with loved ones, but it can also cause an individual to get lost in the virtual world. This topic sparked my interest when aclose promoter of mine began to notice changes in her boyfriends attitude. Her problems began when her boyfriend bought a laptop computer. He had never had a computer before, so this was something new and exciting for him. Within a couple of weeks my friend began to notice changes in his attitude. Suddenly, she noticed he spent hours a day in front of a computer screen. He was transfixed by the internet and the immense amount of resources it had to offer. His free time no longer consisted of outgo quality time with his friends and significant other, rather he strand browsing the web more fascinating and worthwhile. My f riend suddenly found herself competing against a machine for her boyfriends attention. My friend is not the only one who has experienced problems referable to the amount of time her boyfriend spends on the computer. My cousin for example, can spend hours a day playing computer games and surfing the net. Interestingly enough, he denies spending so much time on the computer.