School of Accounting and Commercial Law


Listed below are forthcoming events either hosted by the School of Accounting and Commercial Law (SACL) or the Centre for Accounting, Governance and Taxation Research (CAGTR) or the Chair in Public Finance.

Liability for Paying Pensions Under the 2001 New Zealand-Australian Social Security Agreement: Uneven Burdens? (Associate Professor Andrew Smith - Victoria University)

Date: 12 June 2015

Time: 11.00 am

Venue: RWW129

Shortly after Australia and New Zealand introduced social security programmes in their respective countries, the two countries entered into a treaty (know as a "social security agreement" or "SSA") to coordinate and harmonise the payment of social securitiy benefits to individuals who had split their working lives between the two countries.  The first of these SSAs was negotiated in 1943 but was subsequently replaced by a number of revised SSAs, the latest of which was negotiated in 2001.

Apart from this latest SSA, all of the earlier SSAs were based on the principle that the country where the claimant resided would assume responsibility for paying their pension even though part or all of the claimant’s working life hadbeen spent in the other country. Such an arrangement was sustainable when the flow of migrants between the two countries were roughly similar and pension levels approximately the same.

As migration from New Zealand to Australia became significantly greater than migration in the opposite direction, pressure arose for New Zealand to assume liability for at least some of the costs of paying pensions to its migrants who had retired in Australia. Initially this was met by direct government to government reimbursements, but these later became a point of disagreement between the two governments ultimately leading to the negotiation of a new SSA in 2001. The 2001 SSA incorporates a fractional pension model whereby each country pays a part pension basedon the time the claimant has spent working in each country. This model is intended to produce a fairer allocation of pension costs between the two countries reflecting the tax that would have been collected by each country from a claimant during their working life.

The allocation of pension costs under this model is complicated by two factors. Firstly, the total pension payable to the claimant is determined solely by the domestic pension rules of the country where they have retired. Secondly, the amount the other state must contribute to that pension is determined by the domestic pension rules of that country, not the state where the claimant has retired. As a consequence, the actual burdens for each country of meetingthe pension costs of a migrant will not be necessarily proportional to the time the claimant has spent in each country during their working life. 

This paper will examine how pension costs will be allocated in practice between Australia and New Zealand under the 2001 SSA through the use of a model. Results from the model suggests that the 2001 SSA will not necessarily producean appropriate allocation of pension costs and that one state may be left with a disproportionate burden. This raises questions whether the basis for allocating pension costs under the 2001 SSA is sustainable in the longer term and alsowhether divergent domestic pension policies can be maintained in an open migration environment.


Executive overconfidence and securities class actions (Assistant Professsor Mark Humphery-Jenner - UNSW Business School, UNSW Australia)

Date: 19 June 2015

Time: 11.00 am

Venue: RWW129

Securities class actions (SCAs) harm the subject firm's product market position and often result in disciplinary actions against the CEO. If CEOs (and other senior-executives) trade-off benefits from, say, withholding negative information versus likelihood of detection and SCAs - we expect their choice to be influenced by beliefs regardingfuture firm prospects and likelihood they might rectify the period of poor performance. We hypothesize that overconfident executives, with rosier views of future firm performance, are more likely to engage in reckless or intentional actions that give rise to SCAs. We find strong evidence that executive-overconfidence increases SCA-likelihood, which is ameliorated by improved governance (following SOX) and reduction in risk-taking incentives (following SFAS-123R). Post-SCA, consistent with being regarded as more blame-worthy, there isgreater likelihood of overconfident-CEO turnover. Overconfident CEOs also learn from prior SCAs, with SCAs attenuating the impact of CEO overconfidence on future litigation risk.

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