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Life tables estimation for pension system actuarial projection model with insufficient data: case of Republic of Srpska

Author

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  • Bošnjak Nikolina

    (Faculty of Economics of University of Banja Luka, Bosnia and Herzegovina)

  • Prorok Vesna

    (Faculty of Economics of University of East Sarajevo, Bosnia and Herzegovina)

Abstract

This article provides an upgraded model for actuarial projection of the dependency ratio of the pension fund in the Republic of Srpska. The nonexistence of complete upto-date life tables presents a huge problem of the pension system and life insurance industry modelling in the Republic of Srpska. Therefore, this article tries to encompass the problem by using the life tables of the Republic of Croatia as a starting point for adjustment of age-grouped life tables available for population of the Republic of Srpska. The actuarial projection model for the Pension and Disability Insurance Fund of the Republic of Srpska is upgraded by using these adjusted life tables and the best estimate mortality trend for mortality forecasting. The results of the Republic of Srpska pension fund dependency ratio projections obtained using a forecast of adjusted life tables are compared to the previous research on this topic which used the life tables of the Republic of Serbia for 2013 for the same model. This way we can observe the effect of life expectancy growth on pension fund’s dependency ratio estimates as one of the measures of pension fund’s sustainability.

Suggested Citation

  • Bošnjak Nikolina & Prorok Vesna, 2019. "Life tables estimation for pension system actuarial projection model with insufficient data: case of Republic of Srpska," Croatian Review of Economic, Business and Social Statistics, Sciendo, vol. 5(1), pages 21-32, May.
    • Handle: RePEc:vrs:crebss:v:5:y:2019:i:1:p:21-32:n:3
    DOI: 10.2478/crebss-2019-0003
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    References listed on IDEAS

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    1. Booth, H. & Tickle, L., 2008. "Mortality Modelling and Forecasting: a Review of Methods," Annals of Actuarial Science, Cambridge University Press, vol. 3(1-2), pages 3-43, September.
    2. Anastasia Kostaki, 2000. "A relational technique for estimating the age-specific mortality pattern from grouped data," Mathematical Population Studies, Taylor & Francis Journals, vol. 9(1), pages 83-95.
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    More about this item

    Keywords

    best estimate mortality trend; life tables’ adjustment; pension fund dependency ratio;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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