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Predikované dopady realizace chilské penzijní reformy v České Republice
[Predicted Effects of Chilean Pension Reform Application in the Czech Republic]

Author

Listed:
  • Petr Brabec
  • Karina Kubelková

Abstract

The article analyzes the possible impacts of the fully-funded (FF) pension system (the so-called Chilean model), which was introduced in the Czech Republic in 2012, on future pensions of contributors to the system and on state expenditures related to the pension system reform. The author performed calculations for 3 model examples of individuals who would participate solely in the FF and also of individuals who would contribute to both the pay-as-you-go (PAYG) and the FF during their lives. The calculations in all model examples were made for 4 average real annual interest rates and for 4 standardised income levels. The income replacement rates of the examined individuals were compared with the existing PAYG and with a hypothetical balanced PAYG. The aim was to determine the minimum rate of the pension funds' appreciation from whichthe transition to the FF would be profi table for all examined individuals. The article also attempts to identify the duration of the transition period, the moment after which the FF would become budget-neutral, and the approximate cost of the transition process.

Suggested Citation

  • Petr Brabec & Karina Kubelková, 2015. "Predikované dopady realizace chilské penzijní reformy v České Republice [Predicted Effects of Chilean Pension Reform Application in the Czech Republic]," Politická ekonomie, Prague University of Economics and Business, vol. 2015(8), pages 967-989.
    • Handle: RePEc:prg:jnlpol:v:2015:y:2015:i:8:id:1047:p:967-989
    DOI: 10.18267/j.polek.1047
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    References listed on IDEAS

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    1. repec:idb:brikps:41658 is not listed on IDEAS
    2. Pietro Masci & Carolin A. Crabbe & Guillermo Larraín Ríos & Agustín Vidal-Aragón de Olives & The Principal Financial Group & Alberto Arenas de Mesa & Kenroy Dowers & Lawrence H. Thompson & Rafael Rofm, 2005. "A Quarter Century of Pension Reform in Latin America and the Caribbean: Lessons Learned and Next Steps," IDB Publications (Books), Inter-American Development Bank, number 41658 edited by Carolin A. Crabbe, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    pension system; PAYG; pay-as-you-go system; fully-funded system; FF; Czech Republic; Chile; capital accounts;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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