Theoretical Foundations of Pay-as-You-Go Defined-Contribution Pension Schemes

Gronchi, Sandro; Nisticò, Sergio

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Theoretical Foundations of Pay-as-You-Go Defined-Contribution Pension Schemes

Metroeconomica, Forthcoming

41 Pages Posted: 14 Oct 2007

See all articles by Sandro Gronchi

Sergio Nisticò

University of Cassino - Department of Economics

Abstract

The paper inquires into Notional Defined Contribution pension schemes, which retain the pay-as-you-go financing method while adopting the award and indexation formulas typical of funded, defined-contribution systems. It inquires the properties of the new arrangement and compares its theoretical foundations with the literature that, between the 1955 and 1966, identified the implicit return granted by unfunded systems.

Keywords: pay-as-you-go, defined-contribution, pension systems

JEL Classification: H55

Suggested Citation: Suggested Citation

Gronchi, Sandro and Nisticò, Sergio, Theoretical Foundations of Pay-as-You-Go Defined-Contribution Pension Schemes. Metroeconomica, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1020755