A case for partial funding of pensions with an application to the EU Candidate Countries
The 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.
|Date of creation:||Mar 2001|
|Date of revision:|
|Contact details of provider:|| Postal: Inter-institutional relations and communication Unit, B-1049 Brussels|
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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.
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