Developing coherent pension systems: design issues for private pension supplements to NDC schemes

Author(s)
Price, William
Date Issued
August 30, 2019
Subjects
Integrazione delle politiche
Riforma pensionistica
Abstract
This paper reviews the design of private pensions alongside a notional defined contribution (NDC) – or public – component. A mix of public and private pensions is the best way to deliver a strong combination of five core outcomes: coverage, adequacy, sustainability, efficiency, and security. Choices for market structure, benefit type, contributions, and investment strategy can be guided by their impact on these outcomes. The clarity of an NDC formula allows the joint distribution of public and private pensions to be modeled – which can be crucial for optimal investment strategies given, for example, the negative correlation between real per capita gross domestic product growth and equity markets over long periods. NDC payout formulas have broad applications where annuity markets are weak.
Citation
Price W. (2019), Developing coherent pension systems: design issues for private pension supplements to NDC schemes, Roma, INAPP, WP, n. 40 <https://oa.inapp.org/xmlui/handle/20.500.12916/477>
URI
Type
Working Paper
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