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Modelling Development of Voluntary Pension Fund Using Mathematical Model of Approximation with Lagrange Interpolation Polynomials

Author

Listed:
  • Radojković Ivan

    (“Dunav”, voluntary pension fund management company, Serbia)

  • Ranđelović Branislav

    (University of Niš, the Faculty of Electronic Engineering, Serbia)

  • Ilić Ivana

    (University of Niš, the Faculty of Medicine, Serbia)

Abstract

Corporate social responsibility (CSR), as a concept that tackles economic, The introduction of private pension funds is the essence of the reform of the pension system in Serbia. Private pension funds in Serbia are based on voluntary benefits. Thus, the functioning of the pension system takes place in three interconnected processes: payments to a voluntary pension fund, investment of free funds, and ultimately programmed payments – pensions. The stability in the voluntary pension funds and the predictability of payments allow the quality of investment portfolio to be formed and achieve a long-term yield of investment. In this paper, we implement a well-known approximation method of Lagrange polynomial interpolation. We use it in order to find appropriate mathematical model for prediction of the number of fund members and the average salary in Serbia. This calculation is based on data (average salaries and fund member) from the last five years, i.e. from the period 2015-2019. We calculated the exact mathematical formula, then we compared the results and predictions obtained with that formula and with the formula from one of our previous works. In keeping with that, the appropriate conclusions were given..

Suggested Citation

  • Radojković Ivan & Ranđelović Branislav & Ilić Ivana, 2021. "Modelling Development of Voluntary Pension Fund Using Mathematical Model of Approximation with Lagrange Interpolation Polynomials," Economic Themes, Sciendo, vol. 59(2), pages 243-257, June.
    • Handle: RePEc:vrs:ecothe:v:59:y:2021:i:2:p:243-257:n:2
    DOI: 10.2478/ethemes-2021-0014
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    More about this item

    Keywords

    pension system; voluntary pension funds; mathematical model; Lagrange interpolation.;
    All these keywords.

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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