IDEAS home Printed from
   My bibliography  Save this article

Sensitivity Analysis of Accumulated Savings in Defined Contribution Pension System


  • Mladen Latkovic

    (Raiffeisen Mandatory Pension Fund Management Company, Zagreb)

  • Ivana Liker

    (Raiffeisen Mandatory Pension Fund Management Company, Zagreb)


In this article we analyze the effect of parameters in the standard model for calculation of accumulated savings in a defined contribution pension system. Three parameters affect accumulated savings in the standard model: saving duration, return of the pension fund and the growth in employee gross wage. By using a linear approximation we calculated marginal contributions for small changes in the parameters of the standard model and analyzed their relations for a set of referent parameters which are most suitable for the 2nd pillar pension system in Croatia. It is shown that the return of a pension fund has a major influence on accumulated savings, while the influence of the growth in employee gross wage is slightly smaller. Also, we calculated the influence of raising the contribution rate in the 2nd pillar on the accumulated savings in a simple scenario in which that rate is raised by equal amounts over the whole of a saving period. These results allow easier planning of pension insurance in the defined contribution system at a general level as well as at an individual level.

Suggested Citation

  • Mladen Latkovic & Ivana Liker, 2009. "Sensitivity Analysis of Accumulated Savings in Defined Contribution Pension System," Financial Theory and Practice, Institute of Public Finance, vol. 33(4), pages 445-461.
  • Handle: RePEc:ipf:finteo:v:33:y:2009:i:4:p:445-461

    Download full text from publisher

    File URL:
    Download Restriction: no


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ipf:finteo:v:33:y:2009:i:4:p:445-461. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Martina Fabris). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.