Developing Coherent Pension Systems: Design Issues for Private Pension Supplements to NDC Schemes

William Joseph Price

No 136538, Social Protection Discussion Papers and Notes from The World Bank

Abstract: This paper reviews the design of private pensions alongside a notional defined contribution (NDC) ? or public ? component. A mix of public and private pensions is the bestway to deliver a strong combination of five core outcomes: coverage, adequacy,sustainability, efficiency, and security. Choices for market structure, benefit type,contributions, and investment strategy can be guided by their impact on these outcomes.The clarity of an NDC formula allows the joint distribution of public and private pensions tobe modeled which can be crucial for optimal investment strategies given, for example, thenegative correlation between real per capita gross domestic product growth and equity markets over long periods. NDC payout formulas have broad applications where annuity markets are weak.

Keywords: Pensions&Retirement Systems; Labor Markets; Rural Labor Markets; Social Funds and Pensions; Capital Markets and Capital Flows; Capital Flows; Non Bank Financial Institutions; Population&Development; Gender and Development (search for similar items in EconPapers)
Date: 2019-04-01
New Economics Papers: this item is included in nep-age
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:hdnspu:136538

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