The ABCs of NDCs
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 s...
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| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/349741556880626886/The-ABCs-of-NDCs http://hdl.handle.net/10986/31627 |
| Summary: | 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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