NDC : The Generic Old-Age Pension Scheme
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...
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| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/440441556879507688/NDC-The-Generic-Old-Age-Pension-Scheme http://hdl.handle.net/10986/31631 |
| Summary: | 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. |
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