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¿Qué protección social ofrecería un pilar de “cuentas nocionales” en Uruguay?

Alvaro Forteza () and Ianina Rossi

No 210, Documentos de Trabajo (working papers) from Department of Economics - dECON

Abstract: It is usually accepted that a pure NDC scheme is not adequate to protect individuals against the risk of poverty in old age, because it does not incorporate any redistribution of the system`s revenue. However, we show that insufficient coverage and weak social protection can be more seriuos issues in a DB that in an NDC scheme when individuals have short histories of contribution. Using work histories records from Uruguay, we compute the contribution and labor income patterns and simulate pension rights of the cohort born in 1995, assuming that these patterns remain unchanged. We characterize the distribution of pension rights and calculate the pension cost under both systems, ie under the current DB + CC and under a simulated NDC + CC system. We consider a pure NDC system and also one supplemented with minimum pensions and one supplemented with government contributions. We found that an NDC sheme would provide better social protection than a DB system, even without minimum pensions. That is, an improvement in the actuarial fairness would lead to an improvement in the welfare of low-income workers.

Keywords: Defined Benefit; Defined Contribution; Pensions; Pension Rights; Work History. (search for similar items in EconPapers)
JEL-codes: H55 J14 J26 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2010-02
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