Notional defined contribution pension systems in a stochastic context: design and stability
Around the world, Pay-As-You-Go (PAYGO) public pension programs face serious long-term fiscal problems due primarily to actual and projected population aging, and most appear unsustainable as currently structured. Some have proposed the replacement of such plans with systems of fully funded private...
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| Hauptverfasser: | , |
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| Format: | Buch |
| Sprache: | English |
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Cambridge, Mass.
National Bureau of Economic Research
2006
|
| Schriftenreihe: | Working paper series / National Bureau of Economic Research
12805 |
| Online-Zugang: | kostenfrei |
| Zusammenfassung: | Around the world, Pay-As-You-Go (PAYGO) public pension programs face serious long-term fiscal problems due primarily to actual and projected population aging, and most appear unsustainable as currently structured. Some have proposed the replacement of such plans with systems of fully funded private or personal Defined Contribution (DC) accounts, but the difficulties of transition to funded systems have limited their implementation. Recently, a new variety of public pension program known as "Notional Defined Contribution" or "Non-financial Defined Contribution" (NDC) has been created, with the objectives of addressing the fiscal instability of traditional plans and mimicking the characteristics of funded DC plans while retaining PAYGO finance. Using different versions of the system recently adopted in Sweden, calibrated to US demographic and economic parameters, we evaluate the success of the NDC approach in achieving fiscal stability in a stochastic context. (In a companion paper, we will consider other aspects of the performance of NDC plans in comparison to traditional PAYGO pensions.) We find that the basic NDC scheme is effective at preventing excessive debt accumulation, but does little to prevent significant asset accumulation along many trajectories and on average. With adjustment, however, the NDC approach can be made more stable. |
| Beschreibung: | 29, [7] S. graph. Darst. 22 cm |
Internformat
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| 245 | 1 | 0 | |a Notional defined contribution pension systems in a stochastic context |b design and stability |c Alan J. Auerbach ; Ronald Lee |
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| 520 | |a Around the world, Pay-As-You-Go (PAYGO) public pension programs face serious long-term fiscal problems due primarily to actual and projected population aging, and most appear unsustainable as currently structured. Some have proposed the replacement of such plans with systems of fully funded private or personal Defined Contribution (DC) accounts, but the difficulties of transition to funded systems have limited their implementation. Recently, a new variety of public pension program known as "Notional Defined Contribution" or "Non-financial Defined Contribution" (NDC) has been created, with the objectives of addressing the fiscal instability of traditional plans and mimicking the characteristics of funded DC plans while retaining PAYGO finance. Using different versions of the system recently adopted in Sweden, calibrated to US demographic and economic parameters, we evaluate the success of the NDC approach in achieving fiscal stability in a stochastic context. (In a companion paper, we will consider other aspects of the performance of NDC plans in comparison to traditional PAYGO pensions.) We find that the basic NDC scheme is effective at preventing excessive debt accumulation, but does little to prevent significant asset accumulation along many trajectories and on average. With adjustment, however, the NDC approach can be made more stable. | ||
| 700 | 1 | |a Lee, Ronald Demos |d 1941- |e Verfasser |0 (DE-588)129704989 |4 aut | |
| 776 | 0 | 8 | |i Erscheint auch als |n Online-Ausgabe |
| 810 | 2 | |a National Bureau of Economic Research <Cambridge, Mass.> |t NBER working paper series |v 12805 |w (DE-604)BV002801238 |9 12805 | |
| 856 | 4 | 1 | |u http://papers.nber.org/papers/w12805.pdf |z kostenfrei |3 Volltext |
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Datensatz im Suchindex
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| id | DE-604.BV023592726 |
| illustrated | Illustrated |
| index_date | 2024-07-02T22:41:30Z |
| indexdate | 2024-07-09T21:25:13Z |
| institution | BVB |
| language | English |
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| physical | 29, [7] S. graph. Darst. 22 cm |
| publishDate | 2006 |
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| publisher | National Bureau of Economic Research |
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| spelling | Auerbach, Alan J. 1951- Verfasser (DE-588)124566537 aut Notional defined contribution pension systems in a stochastic context design and stability Alan J. Auerbach ; Ronald Lee Cambridge, Mass. National Bureau of Economic Research 2006 29, [7] S. graph. Darst. 22 cm txt rdacontent n rdamedia nc rdacarrier Working paper series / National Bureau of Economic Research 12805 Around the world, Pay-As-You-Go (PAYGO) public pension programs face serious long-term fiscal problems due primarily to actual and projected population aging, and most appear unsustainable as currently structured. Some have proposed the replacement of such plans with systems of fully funded private or personal Defined Contribution (DC) accounts, but the difficulties of transition to funded systems have limited their implementation. Recently, a new variety of public pension program known as "Notional Defined Contribution" or "Non-financial Defined Contribution" (NDC) has been created, with the objectives of addressing the fiscal instability of traditional plans and mimicking the characteristics of funded DC plans while retaining PAYGO finance. Using different versions of the system recently adopted in Sweden, calibrated to US demographic and economic parameters, we evaluate the success of the NDC approach in achieving fiscal stability in a stochastic context. (In a companion paper, we will consider other aspects of the performance of NDC plans in comparison to traditional PAYGO pensions.) We find that the basic NDC scheme is effective at preventing excessive debt accumulation, but does little to prevent significant asset accumulation along many trajectories and on average. With adjustment, however, the NDC approach can be made more stable. Lee, Ronald Demos 1941- Verfasser (DE-588)129704989 aut Erscheint auch als Online-Ausgabe National Bureau of Economic Research <Cambridge, Mass.> NBER working paper series 12805 (DE-604)BV002801238 12805 http://papers.nber.org/papers/w12805.pdf kostenfrei Volltext |
| spellingShingle | Auerbach, Alan J. 1951- Lee, Ronald Demos 1941- Notional defined contribution pension systems in a stochastic context design and stability |
| title | Notional defined contribution pension systems in a stochastic context design and stability |
| title_auth | Notional defined contribution pension systems in a stochastic context design and stability |
| title_exact_search | Notional defined contribution pension systems in a stochastic context design and stability |
| title_exact_search_txtP | Notional defined contribution pension systems in a stochastic context design and stability |
| title_full | Notional defined contribution pension systems in a stochastic context design and stability Alan J. Auerbach ; Ronald Lee |
| title_fullStr | Notional defined contribution pension systems in a stochastic context design and stability Alan J. Auerbach ; Ronald Lee |
| title_full_unstemmed | Notional defined contribution pension systems in a stochastic context design and stability Alan J. Auerbach ; Ronald Lee |
| title_short | Notional defined contribution pension systems in a stochastic context |
| title_sort | notional defined contribution pension systems in a stochastic context design and stability |
| title_sub | design and stability |
| url | http://papers.nber.org/papers/w12805.pdf |
| volume_link | (DE-604)BV002801238 |
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