Qu’est-ce qui n’a pas fonctionné dans la construction des systèmes de retraite par répartition ?

Riccardo Magnani

Revue économique, 2022, vol. 73, issue 3, 429-493

Abstract: In this article we show that the non-sustainability of Pay-As-You-Go systems is due to the fact that pensions have not been computed according to appropriate rules. In particular, we show that pension sustainability is guaranteed if 1) benefits are computed using actuarial principles, 2) the implicit rate of return on contributions is equal to the average wage bill growth rate (for each retiree), and 3) the interest rate on pension reserves is at least equal to the average wage bill growth rate. Using numerical simulations, we show that the rule proposed in the article allows to obtain better results in terms of intergenerational equity and welfare with respect to alternative rules.

Keywords: pension economics; pension finance; population ageing (search for similar items in EconPapers)
Date: 2022
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Working Paper: Qu’est-ce qui n’a pas fonctionné dans la construction des systèmes de retraite par répartition ? (2022)
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