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A Universal Fully Funded Pension Scheme

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  • LOK SANG HO

Abstract

This paper puts forward a public pension scheme that is fully funded for each cohort and covers everybody. The scheme is an application of the generational accounting concept. As compared to pay‐as‐you‐go schemes, it is free of the vagaries of uncertain demographic changes. Because payouts for each cohort are directly related to contributions, it is also free of political pressures to increase benefits. The paper looks at various refinements to the scheme and compares it with the Mandatory Private Provident Fund, which has become popular in recent years.

Suggested Citation

  • Lok Sang Ho, 1997. "A Universal Fully Funded Pension Scheme," Contemporary Economic Policy, Western Economic Association International, vol. 15(3), pages 13-20, July.
    • Handle: RePEc:bla:coecpo:v:15:y:1997:i:3:p:13-20
    DOI: 10.1111/j.1465-7287.1997.tb00473.x
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    1. Eckstein, Zvi & Eichenbaum, Martin & Peled, Dan, 1985. "Uncertain lifetimes and the welfare enhancing properties of annuity markets and social security," Journal of Public Economics, Elsevier, vol. 26(3), pages 303-326, April.
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    4. Robert Haveman, 1994. "Should Generational Accounts Replace Public Budgets and Deficits?," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 95-111, Winter.
    5. Noguchi, Yukio, 1983. "Problems of Public Pensions in Japan," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 24(1), pages 43-68, June.
    6. Mitchell, Olivia S & Zeldes, Stephen P, 1996. "Social Security Privatization: A Structure for Analysis," American Economic Review, American Economic Association, vol. 86(2), pages 363-367, May.
    7. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1994. "Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 73-94, Winter.
    8. Peter Diamond, 1993. "Privatization of Social Security: Lessons from Chile," NBER Working Papers 4510, National Bureau of Economic Research, Inc.
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