Generic NDC: Equilibrium, valuation and risk sharing with and without NDC bonds

Arbeitspapier

The Non-financial (Notional) Defined Contribution (NDC) PAYGO pension scheme is a recent innovation and its generic dimensions have not previously been explored in a coherent context. This paper does this. It derives and analyzes the demographic, economic and distributional properties of NDC. The residual (systematic) longevity risk creates a special problem, solved with an NDC bond, the asset that closes the system financially, transferring residual risk to the government (taxpayers). This guarantees a fixed NDC contribution rate and, thus, intergenerational commitment, with transparent distributional policy pursued through targeted transfers from general tax revenues and taxation of overall personal income.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2011:3

Classification and Topics

• Classification: Wirtschaft ; Social Security and Public Pensions ; Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs ; Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination ; Fiscal and Monetary Policy in Development ; Capitalist Systems: Political Economy
• Subject: Pensions ; NDC ; Notional Defined Contribution ; Non-financial Defined Contribution ; NDC Bond ; Risk sharing ; Pension Policy ; Pay-as-you-go ; PAYG ; Gesetzliche Rentenversicherung ; Umlageverfahren ; Rentenpolitik ; Schweden

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Palmer, Edward
• Event: Veröffentlichung
• (who): Uppsala University, Department of Economics
• (where): Uppsala
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/82570
• URN: urn:nbn:se:uu:diva-145481
• Last update: 10.03.2025, 11:43 AM CET