An economic analysis of the PAYG retirement systemand the expected consequences from a transition to anFF scheme

摘要

In this paper an attempt is made to illuminate the basicproblems that are associated with financing retirement. The currentlyprevailing, in most developed countries, Pay-As-You-Go (PAYG) systemand its deficiencies are analysed initially from a traditional economicperspective and the expected consequences from a transition to a Fully-Funded (FF) scheme are also presented. A System Dynamics model issubsequently described which enables the employment of considerablymore realistic assumptions than are commonly employed in economicmodels, and its results prove to challenge mainstream economic findings.In addition many novel features of PAYG schemes are uncovered.