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 Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission in its series European Economy - Economic Papers with number 149.
Length: 53 pages
Date of creation: Mar 2001
Date of revision:
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pension systems; demographics; reform;
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- Directorate General II - Economic and Financial Affairs, 1998. "Update on the Practical Aspects of the Introduction of the Euro," Papers 21, Commission of the EEC - Euro Papers.
- Evelin, Ahermaa & Luigi, Bernardi, 2004. "Tax polici in new EU members: Estonia and othr Baltic states," MPRA Paper 18158, University Library of Munich, Germany.
- Hans-Werner Sinn, 2005. "Europe’s Demographic Deficit A Plea For A Child Pension System," De Economist, Springer, vol. 153(1), pages 1-45, December.
- K. Mc Morrow & W. R�ger, 2002. "EU pension reform - An overview of the debate and an empirical assessment of the main policy reform options," European Economy - Economic Papers 162, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Heikki Oksanen, 2001. "Pension Reforms for Sustainability and Fairness," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 2(4), pages 12-18, October.
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