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
Date Written: June 1, 2000
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: Suggested Citation