Demographic Changes and Pension Finances in Vietnam

Giang Thanh Long and Wade Donald Pfau ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper aims to provide a long-term financial vision for the Vietnamese pension scheme using stochastic modeling for key variables under an actuarial framework. In particular, we project the pension fund balances in order to see whether the scheme will be financially sustainable. The median values of the status-quo projections show that the pension fund will be depleted in about 2052 with a 90-percent confidence interval range of 8 years. The estimated results from our sensitivity tests show that the retirement age, the indexation method for pension benefits, and the contribution rate are all crucial determinants of the pension fund balance in the long term. At the same time, some factors, including coverage rates, administrative costs, the long-term fertility rate, and the rate of return on pension fund assets play less important roles in determining the fund’s balance.

Keywords: aging; stochastic projections; pension finances; Vietnam (search for similar items in EconPapers)
JEL-codes: H55 G23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age and nep-dev
Date: 2008
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Persistent link: http://EconPapers.repec.org/RePEc:pra:mprapa:9931

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