1,721,245 research outputs found
Designing the pension system:Conceptual framework
No full textThis paper develops an analytical framework for the design of pension systems, taking the functions of the pension system as the guiding principle. It discusses the economic principles underlying these functions and their implementation in practice. In particular, it distinguishes three functions: facilitating life-cycle financial planning; insuring idiosyncratic risks and sharing macroeconomic risks across generations. The first function concerns consumption smoothing over the life cycle, taking into account individual circumstances and preferences. The second function concerns pooling of intragenerational risks in the face of imperfect insurance markets. The third function concerns intergenerational risk sharing of systemic or ‘macroeconomic’ shocks in the face of incomplete markets. As regards the latter function, the relevant market imperfections are the limited tradability of human capital and the lack of markets to trade risks with future generations
Designing the pension system: conceptual framework
No full textThis paper develops an analytical framework for the design of pension systems, taking the functions of the pension system as the guiding principle. It discusses the economic principles underlying these functions and their implementation in practice. In particular, it distinguishes three functions: i) facilitating life-cycle financial planning; ii) insuring idiosyncratic risks and iii) sharing macroeconomic risks across generations. The first function concerns consumption smoothing over the life cycle, taking into account individual circumstances and preferences. The second function concerns pooling of intragenerational risks in the face of imperfect insurance markets. The third function concerns intergenerational risk sharing of systemic or ‘macroeconomic’ shocks in the face of incomplete markets. As regards the latter function, the relevant market imperfections are the limited tradability of human capital and the lack of markets to trade risks with future generations
The future of multi-pillar pension systems
No full textThis paper takes stock of the evolution in pension systems and the challenges that remain for the future. It derives a typology of pension systems and uses this to discuss the strengths and weaknesses of alternative systems. After describing how pension systems in the industrial world have been facing similar challenges, this paper argues that pension contracts in various countries have developed in similar directions. In observing that the way that pensions are organized still differs substantially between countries, the paper discusses that this international heterogeneity is likely to remain in the future. A unique answer to what is the optimal pension system apparently does not exist; several alternative solutions exist alongside each other, depending on the specific historical, political and institutional context of each country
The future of multi-pillar pension systems
Full text linkThis paper takes stock of the evolution in pension systems and the challenges that remain for the future. It derives a typology of pension systems and uses this to discuss the strengths and weaknesses of alternative systems. After describing how pension systems in the industrial world have been facing similar challenges, this paper argues that pension contracts in various countries have developed in similar directions. In observing that the way that pensions are organized still differs substantially between countries, the paper discusses that this international heterogeneity is likely to remain in the future. A unique answer to what is the optimal pension system apparently does not exist; several alternative solutions exist alongside each other, depending on the specific historical, political and institutional context of each country
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