A Case for Partial Funding of Pensions with an Application to the EU Candidate Countries
AbstractThe paper examines the effects of ageing and makes a case for partial pre-funding of pensions. The argument is based on inter-generational fairness in a situation where pension expenditure as compared to wages increases due to low fertility and increasing longevity. We illustrate the approach by using data representing a typical EU Candidate Country of Central and Eastern Europe with a relatively high pension replacement rate. Pre-funding can take place within the public sector or in a privatised second pillar. We emphasise the need for a consistent framework to cover the many different institutional options available for pension financing.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 466.
Date of creation: 2001
Date of revision:
Pension system reform; partial pre-funding; ageing;
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