EconPapers    
Economics at your fingertips  
 

Information and Financial Literacy for a Socially Sustainable NDC Pension System

Elsa Fornero (), Noemi Oggero () and Riccardo Puglisi
Additional contact information
Elsa Fornero: University of Turin and CeRP-Collegio Carlo Alberto
Noemi Oggero: University of Turin and CeRP-Collegio Carlo Alberto

No 180, CeRP Working Papers from Center for Research on Pensions and Welfare Policies, Turin (Italy)

Abstract: The accumulation of pension wealth is a long and complex endeavour, with various ‘moments’ in which the individual has to make decisions, even in public systems with a strong compulsory component. Awareness is essential to increase welfare, as citizens are more likely to make sensible choices and avoid regrettable mistakes. Awareness requires both information and the ability to use it wisely; in turn, this requires a minimum economic-financial knowledge, typically called financial literacy. Workers must have some knowledge (conjecture), as precise as possible, of where they stand on their accumulated (prospective) pension wealth and retirement options. This knowledge is less important in the traditional world of DB pension promises, because of their ‘guaranteed’ nature (although the political risk—a risk that people are more likely to ignore, by appealing to the notion of ‘acquired rights’—was never explicitly taken into account and thus covered). Knowledge is instead essential in (N)DC schemes because of their more complicated structure, combined with a higher level of individual responsibility and corresponding risk. In this chapter, we investigate the importance of both information and financial literacy, as they are complementary in achieving a socially sustainable NDC pension system.

New Economics Papers: this item is included in nep-age and nep-fle
Date: 2018-05
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.cerp.carloalberto.org/information-and-f ... -ndc-pension-system/ (application/pdf)

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:crp:wpaper:180

Access Statistics for this paper

More papers in CeRP Working Papers from Center for Research on Pensions and Welfare Policies, Turin (Italy) Contact information at EDIRC.
Bibliographic data for series maintained by Silvia Maero (). This e-mail address is bad, please contact .

 
Page updated 2019-08-20
Handle: RePEc:crp:wpaper:180