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From Traditional DB to Notional DC Systems : reframing PAYG contributions to "notional savings"

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  • Börsch-Supan, Axel

Abstract

This paper provides a critical review of the pension reform strategy which turns defined benefits (DB) public pay-as-you-go systems into notional defined contribution (NDC) systems. We show that properly designed NDC public pension systems contain powerful economic and political mechanisms that may facilitate pension reform, but that the distinction between public NDC and DB systems is more ambiguous than usually claimed.

Suggested Citation

  • Börsch-Supan, Axel, 2004. "From Traditional DB to Notional DC Systems : reframing PAYG contributions to "notional savings"," Papers 04-64, Sonderforschungsbreich 504.
    • Handle: RePEc:mnh:spaper:2684
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    File URL: https://madoc.bib.uni-mannheim.de/2684/1/dp04_64.pdf
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    References listed on IDEAS

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    1. Chlon, Agnieszka & Gora, Marek & Rutkowski, Michal, 1999. "Shaping pension reform in Poland : security through diversity," Social Protection Discussion Papers and Notes 20852, The World Bank.
    2. Borsch-Supan, Axel & Schnabel, Reinhold, 1998. "Social Security and Declining Labor-Force Participation in Germany," American Economic Review, American Economic Association, vol. 88(2), pages 173-178, May.
    3. Axel H. Börsch-Supan & Christina B. Wilke, 2003. "The German Public Pension System: How it Was, How it Will Be," Working Papers wp041, University of Michigan, Michigan Retirement Research Center.
    4. Jonathan Gruber & David A. Wise, 1999. "Introduction to "Social Security and Retirement around the World"," NBER Chapters, in: Social Security and Retirement around the World, pages 1-35, National Bureau of Economic Research, Inc.
    5. Disney, Richard, 1999. "Notional accounts as a pension reform strategy : an evaluation," Social Protection Discussion Papers and Notes 21302, The World Bank.
    6. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
    7. Palmer, Edward, 2000. "The Swedish pension reform model : framework and issues," Social Protection Discussion Papers and Notes 23086, The World Bank.
    8. Jonathan Gruber & David A. Wise, 1999. "Social Security and Retirement around the World," NBER Books, National Bureau of Economic Research, Inc, number grub99-1.
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    More about this item

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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