Simulating Pension Income Scenarios with penCalc : An Illustration for India's National Pension System
This paper sets out initial results from a new modeling exercise for Defined Contribution (DC) pensions. It develops a package called penCalc based on the open source software language R, which is popular in the academic and modeling communities. A...
| Main Authors: | , |
|---|---|
| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/198991516201363951/Simulating-pension-income-scenarios-with-penCalc-an-illustration-for-Indias-national-pension-system http://hdl.handle.net/10986/29214 |
| Summary: | This paper sets out initial results from
a new modeling exercise for Defined Contribution (DC)
pensions. It develops a package called penCalc based on the
open source software language R, which is popular in the
academic and modeling communities. All the coding is made
freely available. The tool is illustrated for India's
DC National Pension System. The aim is not to present the
perfect model for India, but to show how the tool works so
that policy makers and regulators can see its potential
advantages and develop it for their own uses. It generates
scenarios for future assets and income dependent on
user-defined and changeable assumptions for asset returns,
contributions, wages, years in the labor force, and annuity
prices, among other parameters. Assumptions can be tailored
to different countries and user determined scenarios. Many
extensions could be developed, which will be the subject of
future work. The international context is highlighted
through similar modeling by regulators and pension funds in
other jurisdictions. Some of these are more complex or
complete than the results in this paper, but by explaining
the initial model and making the coding freely available,
the authors provide a powerful yet simple and low-cost tool
to be adopted and adapted. |
|---|