DEMOGRAPHIC CHANGES AND THE LONG-TERM PENSION FINANCES IN VIETNAM: A STOCHASTIC ACTUARIAL ASSESSMENT

Long Giang and Wade Pfau

No 08-05, GRIPS Discussion Papers from National Graduate Institute for Policy Studies

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)
Pages: 25 pages
Date: 2008-07
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Citations: View citations in EconPapers (3)

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