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Three Pillars of Pensions? A Proposal to End Mandatory Contributions

United Nations DESA Discussion Paper No. 13

13 Pages Posted: 23 Aug 2000 Last revised: 12 Jan 2009

Larry Willmore

International Institute for Applied Systems Analysis

Date Written: June 1, 2000

Abstract

The three pillars of a pension system are defined in varied ways. The author focuses on a definition provided by the World Bank in its 1994 Report. He argues that with a universal Pillar 1 (a flat, subsistence pension) there is no need for Pillar 2 (earnings-related pensions). Pillar 3 (voluntary retirement savings) should not receive tax subsidies, which are regressive and in any case have not been shown to have any significant effect on private saving. Such a pension scheme may appear utopian, but it is in effect in New Zealand.

Keywords: Public Pensions, Tax Incentives

JEL Classification: H55

Suggested Citation

Willmore, Larry, Three Pillars of Pensions? A Proposal to End Mandatory Contributions (June 1, 2000). United Nations DESA Discussion Paper No. 13. Available at SSRN: https://ssrn.com/abstract=233586 or http://dx.doi.org/10.2139/ssrn.233586

Larry Willmore (Contact Author)

International Institute for Applied Systems Analysis ( email )

Schlossplatz 1
Laxenburg, A-2361
Austria
+43 2236 807 374 (Phone)

HOME PAGE: http://larrywillmore.net

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