Notional defined contribution pension schemes: why does only Sweden distribute the survivor dividend?

Carlos Vidal-Melia, María del Carmen Boado-Penas and Francisco Navarro-Cabo

Journal of Economic Policy Reform, 2016, vol. 19, issue 3, 200-220

Abstract: The aim of this paper is to analyse the role of the survivor dividend in notional defined contribution (NDC) pension schemes. At present, this feature can only be found in the Swedish defined contribution scheme. We develop a model that endorses the idea that the survivor dividend has a strong basis for enabling the NDC scheme to achieve financial equilibrium and that not including the dividend is a non-transparent way of compensating for increases in longevity and/or legacy costs from old pension systems. We also find that the average effect of the dividend remains unchanged for any constant annual rate of population growth, that contributors who reach retirement age always get a higher return than the scheme does, and that population growth enables cohorts with more years of contributions to benefit to a greater extent from the dividend effect.

Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://hdl.handle.net/10.1080/17487870.2015.1028547 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jecprf:v:19:y:2016:i:3:p:200-220

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/GPRE20

DOI: 10.1080/17487870.2015.1028547

Access Statistics for this article

Journal of Economic Policy Reform is currently edited by Dr Judith Clifton

More articles in Journal of Economic Policy Reform from Taylor and Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().