Pension prefunding can be used to smooth contribution rates in economies where aging will increase pension expenditure. But how extensive should prefunding be in a defined benefit pension system when there is considerable uncertainty concerning future mortality, fertility, and migration? We...

This Report analyzes the impacts of population ageing on the Finnish economy and the possibilities to avoid its negative effects by increasing net migration. Our calculations show that a yearly net migration of 44,000 persons is needed to stabilize the size of the birth cohorts and the labor...

This study analyzes the sustainability implications of demographic and investment risks in the Finnish private sector pension system (TyEL). The results show that current contribution rate is likely to be too low to finance the future higher expenditure. The main sustainability problem is not,...

A major reform in the Finnish private-sector earnings-related pension system came into effect on 1st January, 2005. It was negotiated in 2001–2002 between the central organisations of employers and trade unions and representatives of the central government. This paper describes the reform and...

Public health and long-term care services are predominantly used by old people and financed by taxes paid by working-age people. Fluctuating sizes of generations create variations in tax rates, similar to what occurs in pension contribution rates. Pre-funding is a commonly suggested cure for...

Pension prefunding can be used to smooth contribution rates in economies where ageing will increase pension expenditure. But how extensive should prefunding be in a defined benefit pension system when there is considerable uncertainty concerning future mortality, fertility, and migration? We...

A major reform in the Finnish private-sector earnings-related pension system came into effect on January 1st, 2005. It was negotiated in 2001 2002 between the central organisations of employers and trade unions and representatives of the central government. This paper describes the reform and...