NDC: the generic old-age pension scheme

Author(s)
Gora, Marek
Palmer, Edward
Date Issued
July 21, 2019
Subjects
Analisi delle politiche
Pensioni
Riforma pensionistica
Abstract
This paper defines a universal public pension scheme (UPPS) as a government-mandated lifecycle longevity insurance scheme that transfers individual consumption from the working years to retirement. It discusses the differences in four UPPS designs designated as either defined contribution (DC) or defined benefit (DB), and financial or nonfinancial. With individual DC accounts, the ball is in the individual’s court. The transparent link between contributions and retirement income is the enabler of efficiency that – through marginal decisions to choose formal work over informal work or leisure and to postpone retirement marginally toward the end of the working life – supports affordability and sustainability for a chosen level of adequacy. Hence, UPPS-DC designs are found superior to UPPS-DB designs.
Citation
Gora M., Palmer E. (2019), NDC: the generic old-age pension scheme, Roma, INAPP, WP, n. 18 <https://oa.inapp.org/xmlui/handle/20.500.12916/453>
URI
Type
Working Paper
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