Verlag:
Hungarian Academy of Sciences, Institute of Economics, Centre for Economic and Regional Studies, Budapest
Zusammenfassung:
Nonfinancial defined contribution (NDC) pension systems have recently become popular because they provide the strong incentives of the private funded systems without requiring a difficult transition period. Using the framework of mechanism design, these systems have theoretically been criticized because they neglect the regressive intracohort redistribution: longer lived workers retire later and are rewarded as if their life expectancies were average. Now we document this by Hungarian data, and giving up the framework of mechanism design, we corroborate our earlier qualitative findings withthe more realistic benefit adjustment function and wage heterogeneity.