Welfare and Generational Equity in Sustainable Unfunded福利和可持续的资金没有着落的代际公平.pptVIP

Welfare and Generational Equity in Sustainable Unfunded Pension Systems Alan J. Auerbach Ronald Lee UC Berkeley Overview Need to reform existing PAYGO public pension schemes, due to lack of stability and transparency Shift to funded systems confronts economic and political problems of transition An alternative: Notional Defined Contribution (NDC) plans; PAYGO systems, but with some potential advantages (transparency, stability) NDC Systems Two phases: accumulation and retirement Accumulation phase – accumulate an imaginary stock of Notional Pension Wealth (NPW) based on annual contributions Retirement phase: annuitize NPW using same assumed rate of return, based on life table NDC Systems How is assumed rate of return determined? This is the key decision with respect to potential stability Sweden bases return on wage growth (g) adjusted for annual mortality probability Could base return on growth of covered wages (n+g) Previous Auerbach-Lee Paper Studied the Swedish NDC plan, in terms of stability With stochastic wages, interest rates, birth rates and mortality (based on US data), how likely is debt to explode over time? Swedish system is stable downward (no excessive debt build-up), but only because it also includes a “balancing mechanism” that reduces rate of return when trouble near; but doesn’t avoid asset accumulation Previous Auerbach-Lee Paper Could avoid accumulation of assets (and pay a higher average rate of return) by making balance mechanism symmetric, also raising growth rate of accounts and benefits when system assets too high Could make Swedish system more stable by basing growth rate of accounts and annuities on growth rate of wage bill (n+g) rather than growth rate of wage rate (g) This Paper Look at risk-sharing and welfare properties of different types of fiscally stable systems Actual Swedish system and symmetric variants of it from our earlier paper New German system Versions of the US system forced to be stable by annual tax or benefit adjust