Should Public Pensions be Funded?

Richard Hemming

No 1998/035, IMF Working Papers from International Monetary Fund

Abstract: This paper outlines some of the arguments for and against the funding of public pensions, with a view to establishing whether there is an economic basis for judging funding to be superior to pay-as-you-go (PAYG). It is argued that funding does not have a clear advantage, and the case for a shift from PAYG to funding is thus an uneasy one. There is nonetheless growing advocacy of funded public pensions as part of an ideal pension system, which raises more general issues about the role of the public sector in pension provision.

Keywords: WP; contribution rate; PAYG scheme; PAYG liability; PAYG rate; real interest rate; Public pensions; funding; pay-as-you-go; aging populations; PAYG financing; pension liability; PAYG contract; Pension spending; Pensions; Pension reform; Aging; Public sector; Eastern Europe (search for similar items in EconPapers)
Pages: 35
Date: 1998-03-01
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Citations: View citations in EconPapers (15)

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