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A case for partial funding of pensions with an application to the EU Candidate Countries.

Author(s): Heikki Oksanen

A case for partial funding of pensions with an application to the EU Candidate Countries. pdf (359 kB) Choose translations of the previous link 

The paper examines the effects of ageing and makes a case for partial pre-funding of pensions. The argument is based on inter-generational fairness in a situation where pension expenditure as compared to wages increases due to low fertility and increasing longevity. We illustrate the approach by using data representing a typical EU Candidate Country of Central and Eastern Europe with a relatively high pension replacement rate. Pre-funding can take place within the public sector or in a privatised second pillar. We emphasise the need for a consistent framework to cover the many different institutional options available for pension financing.

(European Economy. Economic Papers 149. March 2001. Brussels. 53pp. Tab. Bibliogr. free.)

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