The Rate of Return of Pay-As-You-Go Pension Systems: A More Exact Consumption-Loan Model of Interest

The article presents a method for calculating the cross-section internal rate of return on contributions to pension systems financed according to the pay-as-you-go principle. The method entails a procedure for valuing the contribution flow of pay-as-you-go financing, and identifies the complete set of factors that determine the cross-section internal rate of return. The procedure makes it possible to apply the algorithm of double-entry bookkeeping in analyzing and presenting the financial position and development of pay-as-you-go pension systems.

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Year of publication:	2005-01
Authors:	Settergren, Ole ; Mikula, Boguslaw D.
Institutions:	Center for Intergenerational Studies, Institute of Economic Research
Subject:	Social Security \| Public Pensions \| Internal rate of return \| Accounting

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Extent:	application/pdf
Series:	Discussion Paper.
Type of publication:	Book / Working Paper
Language:	English
Notes:	1 September 2003; 13 November 2004; 15 January 2005, This article will appear in the forthcoming World Bank publication: Pension Reform trough NDC:s Issues and Prospects for Non-Financial Defined Contribution Schemes, Robert Holzmann and Edward Palmer (eds.) Number 249 25 pages long
Classification:	E62 - Fiscal Policy; Public Expenditures, Investment, and Finance; Taxation ; E43 - Determination of Interest Rates; Term Structure Interest Rates ; H55 - Social Security and Public Pensions ; J1 - Demographic Economics ; M41 - Accounting
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005018431