Optimal strategies to restore long-term sustainability of pension systems | University of Oxford

Optimal strategies to restore long-term sustainability of pension systems

Dr Carmen Boado-Penas
14:00 - 15:30
Oxford Institute of Population Ageing
66 Banbury Road
Oxford
OX2 6PR

Seminar Room

Lectures and seminars
Free
Yes
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The aim of this paper is to design an automatic balancing mechanism to restore the sustainability of a pay-as-you-go (PAYG) pension system based on changes in its main variables, such as the contribution rate, normal retirement age and indexation of pensions. Using nonlinear optimisation, this mechanism, identifies and applies an optimal path of these variables to a PAYG system in the long run and absorbs fluctuations in longevity, fertility rates, salary growth or any other events in a pension system.