Developing Coherent Pension Systems : Design Issues for Private Pension Supplements to NDC Schemes
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 bestway to deliver a strong combination of five core outcomes: coverage, adequacy...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/148951556875885451/Developing-Coherent-Pension-Systems-Design-Issues-for-Private-Pension-Supplements-to-NDC-Schemes http://hdl.handle.net/10986/31644 |
| Summary: | 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 bestway 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
tobe modeled which can be crucial for optimal investment
strategies given, for example, thenegative 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. |
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