NDC Schemes and Heterogeneity in Longevity

• Tác giả: Jennifer Alonso-García
• Ngôn ngữ: eng
• Ký hiệu phân loại: 612.68 Longevity factors
• Thông tin xuất bản: World Bank, Washington, DC, 2019
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 289419
• Chủ đề: 1. GENDER; 2. LIFE EXPECTANCY; 3. NONFINANCIAL DEFINED CONTRIBUTIONS; 4. PENSION SYSTEMS

Tóm tắt

 A positive relationship between lifetime income and life expectancy leads to a redistribution mechanism when the average cohort life expectancy is applied for annuity calculation. Such a distortion puts into doubt the main features of the NDC (nonfinancial defined contribution) scheme and calls for alternative designs to compensate for the heterogeneity. This paper explores five key mechanisms of compensation: individualized annuities
  individualized contribution rates
  a two-tier contribution structure with socialized and individual rates
  and two supplementary two-tier approaches to deal with the income distribution tails. Using unique American and British data, the analysis indicates that both individualized annuities and two-tier contribution schemes are feasible and effective and thus promising policy options. A de-pooling by gender will be required, however.