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Indexing pensions

Author

Listed:
  • Piggott, John
  • Sane, Renuka

Abstract

Pension indexation should anchor the parameters of the pension system to one or more economic and demographic variables to ensure that the system is implemented in a sustainable way, while minimizing distortions affecting important economic choices. Arguing that financial sustainability, incentive compatibility and consistency across multiple government programs are critical, the author examine the many linkages between the various parameters of pension schemes. Finally, the author turn to the cost of the insurance dimension of indexation, and suggest that option pricing techniques could be used to price indexation guarantees, and that this approach may suggest refinements to indexation practice not thus far implemented.

Suggested Citation

  • Piggott, John & Sane, Renuka, 2009. "Indexing pensions," Social Protection and Labor Policy and Technical Notes 52445, The World Bank.
  • Handle: RePEc:wbk:hdnspu:52445
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    References listed on IDEAS

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    Cited by:

    1. Holzmann, Robert, 2010. "Bringing financial literacy and education to low and middle income countries : the need to review, adjust, and extend current wisdom," Social Protection and Labor Policy and Technical Notes 56501, The World Bank.
    2. James, Estelle, 2009. "Rethinking survivor benefits," Social Protection and Labor Policy and Technical Notes 52919, The World Bank.
    3. Lord, Janet & Posarac, Aleksandra & Nicoli, Marco & Peffley, Karen & Mcclain-Nhlapo, Charlotte & Keogh, Mary, 2010. "Disability and international cooperation and development : a review of policies and practices," Social Protection and Labor Policy and Technical Notes 56092, The World Bank.
    4. Ra, Young-Sun & Shim, Kyung Woo, 2009. "The Korean case study : past experience and new trends in training policies," Social Protection and Labor Policy and Technical Notes 53696, The World Bank.
    5. Holzmann, Robert, 2010. "Bringing financial literacy and education to low and middle income countries : the need to review, adjust, and extend current wisdom," Social Protection and Labor Policy and Technical Notes 56501, The World Bank.

    More about this item

    Keywords

    Emerging Markets; Debt Markets; Pensions&Retirement Systems; Economic Theory&Research; Markets and Market Access;

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