The Politics of NDC Pension Scheme Diffusion : Constraints and Drivers
Nonfinancial defined contribution (NDC) schemes offer governments desirable properties in terms of efficiency, fairness, and financial sustainability and an opportunity to deflect the blame for pension cuts. Yet adoptions of NDC schemes largely gro...
| Main Authors: | , , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/673721556881833333/The-Politics-of-NDC-Pension-Scheme-Diffusion-Constraints-and-Drivers http://hdl.handle.net/10986/31628 |
| Summary: | Nonfinancial defined contribution (NDC)
schemes offer governments desirable properties in terms of
efficiency, fairness, and financial sustainability and an
opportunity to deflect the blame for pension cuts. Yet
adoptions of NDC schemes largely ground to a halt and
several countries retreated from NDC implementation after
legislation. Lack of support from powerful international
actors is partly to blame, as is the perceived rigidity of
NDC in reducing room for policy maneuver. Correct
implementation requires substantial administrative capacity.
Less demanding automatic stabilizing mechanisms undercut the
appeal of NDC in the European Union. Thus, while being an
important option for policy makers and a benchmark against
which to measure alternative reforms, NDC is unlikely to
become the dominant pension design choice anytime soon. |
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