Sustainability of pensions schemes : building a smooth automatic balance mechanism with an application to the US social security
Fiche du document
1 mai 2016
- handle: 10670/1.amizb5
- hal: hal-03469952
- SCIENCESPO: 2441/1nnmnobpu685qait9jaqir07rn
Ce document est lié à :
info:eu-repo/semantics/altIdentifier/hdl/2441/1nnmnobpu685qait9jaqir07rn
info:eu-repo/semantics/OpenAccess
Mots-clés
Pension Scheme sustainablity Automatic balance mechanisms Dynamic programming C - Mathematical and Quantitative Methods/C.C6 - Mathematical Methods • Programming Models • Mathematical and Simulation Modeling/C.C6.C61 - Optimization Techniques • Programming Models • Dynamic Analysis H - Public Economics/H.H5 - National Government Expenditures and Related Policies/H.H5.H55 - Social Security and Public Pensions H - Public Economics/H.H6 - National Budget, Deficit, and Debt/H.H6.H68 - Forecasts of Budgets, Deficits, and DebtSujets proches
Balance Balancing (Physics) Balance (Physics) BalanceCiter ce document
Frédéric Gannon et al., « Sustainability of pensions schemes : building a smooth automatic balance mechanism with an application to the US social security », HAL-SHS : économie et finance, ID : 10670/1.amizb5
Métriques
Partage / Export
Résumé
We build a "smooth" automatic balance mechanism (S–ABM) which would result from an optimal tradeoff between increasing the receipts and reducing the pension expenditures. The S- ABM obtains from minimizing an intertemporal discounted quadratic loss function under an intertemporal budget balance constraint. The main advantage of our model of "optimal" adjustment is its ability to analyse various configurations in terms of automatic balance mechanisms (ABM) by controlling the adjustment pace. This S-ABM permits to identify two limit cases: the “flat Swedish-type ABM” and the “fiscal-cliff US- type ABM”. These cases are obtained by assuming very high adjustment costs on revenue (implying only pension benefit adjustment) and by choosing particular sequences of publicdiscount rates. We then apply this ABM to the case of the United States Social Security to evaluate the adjustments necessary to ensure financial solvency. These assessments are made under various assumptions about forecast time horizon, public discount factorand weighting of social costs associated with increased receipts or lower expenditures