Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/126427
Authors: 
Metzger, Christoph
Year of Publication: 
2016
Series/Report no.: 
Discussion Papers, Forschungszentrum Generationenverträge der Albert-Ludwigs-Universität Freiburg 59
Abstract: 
Due to demographic change, the fiscal sustainability of pension schemes financed on a pay-as-you-go (PAYGO) basis is of more interest for policy makers than ever. Unsustainable financing brings along a future burden to pensioners through pension cuts and/or to the working population through increasing contribution rates. With comparable data about the unfunded accrued-to-date pension liabilities of social security pension schemes soon being available due to a recent update of the international System of National Accounts (2008 SNA), we present a simple framework for accounting of paygo pension schemes using these estimates of accrued-to-date liabilities. Additionally we incorporate another definition of liabilities, the current workers' and pensioners' net liabilities (CWL). Applying this accounting framework using both definitions of liabilities to the Swiss pension scheme (AHV), we show that financing of the AHV is unsustainable. In order to restore fiscal sustainability either an increase in the contribution rate to 12 percent or a cut in average pension levels of about 38 percent would be necessary.
Subjects: 
accounting of pension schemes
accrued-to-date liabilities
supplementary table
fiscal sustainability
JEL: 
E01
H55
H83
H87
Document Type: 
Working Paper

Files in This Item:
File
Size
503.45 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.