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The ABCs of NDCs

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  • Robert Holzmann

Abstract

Nonfinancial defined contribution (NDC) pension schemes have been successfully implemented since the mid-1990s in a number of European countries. The NDC approach features the lifelong contribution?benefit link of a financial defined contribution scheme, but is based on the pay-as-you-go format. An NDC approach implemented by the rulebook can manage the economic and demographic risks inherent to a pension scheme and by design creates financial sustainability. This paper offers a nontechnical introduction to NDC schemes, their basic elements and advantages over nonfinancial defined benefit schemes, the key technical frontiers of the approach, and the experiences of countries with NDC schemes.
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  • Robert Holzmann, 2019. "The ABCs of NDCs," World Bank Publications - Reports 31627, The World Bank Group.
    • Handle: RePEc:wbk:wboper:31627
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    References listed on IDEAS

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    1. Bernd Genser & Robert Holzmann, 2016. "The Taxation of Internationally Portable Pensions: An Introduction to Fiscal Issues and Policy Options," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(1), pages 24-29, 05.
    2. Robalino, David A. & Bodor, András, 2009. "On the financial sustainability of earnings-related pension schemes with ‘pay-as-you-go’ financing and the role of government-indexed bonds," Journal of Pension Economics and Finance, Cambridge University Press, vol. 8(2), pages 153-187, April.
    3. Bernd Genser & Robert Holzmann, 2016. "The Taxation of Internationally Portable Pensions: An Introduction to Fiscal Issues and Policy Options," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(01), pages 24-29, May.
    4. repec:ces:ifodic:v:14:y:2016:i:1:p:19204327 is not listed on IDEAS
    5. repec:wbk:wbpubs:7336 is not listed on IDEAS
    6. repec:wbk:wbpubs:9378 is not listed on IDEAS
    7. Bernd Genser & Robert Holzmann, 2016. "The Taxation of Internationally Portable Pensions: Fiscal Issues and Policy Options," CESifo Working Paper Series 5702, CESifo.
    8. Séverine Arnold (-Gaille) & María del Carmen Boado-Penas & Humberto Godínez-Olivares, 2016. "Longevity Risk in Notional Defined Contribution Pension Schemes: A Solution," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 41(1), pages 24-52, January.
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