Automatic Adjustment Mechanisms in Asian Pension Systems?
IMF Working Papers, December 13, 2016
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- Automatic Adjustment Mechanisms in Asian Pension Systems?
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Bibliographic details
- Authors: Elif C Arbatli Saxegaard, Csaba Feher, Jack J Ree, Ikuo Saito, Mauricio Soto
- Published: December 13, 2016
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475560336.001
Definition and context
- Automatic adjustment mechanisms (AAMs) are "rules ensuring that certain characteristics of a pension system respond to demographic, macroeconomic and financial developments, in a predetermined fashion and without the need for additional intervention."
- AAMs have been introduced in many OECD countries to tackle public pension schemes’ deteriorating financial sustainability.
Key findings and implications
- Incorporating AAMs—in particular linking retirement age to life expectancy—can be an important part of pension reforms in Asia.
- If implemented early, AAMs could:
- help prevent the need for sharp adjustments in the future,
- increase the predictability and inter-generational equity of pension systems,
- enhance confidence.
- The paper emphasizes the role of AAM design in responding to demographic, macroeconomic, and financial developments without ad hoc policy changes.
Subjects and keywords
- Subjects: Aging, Expenditure, Health, Labor, Pension spending, Pensions, Population and demographics, Retirement
- Keywords: AAM adjustment, Aging, applying Introducing AAMs, Asia and Pacific, Automatic Adjustment Mechanisms, benefit indexation, Pension spending, pension system, Pension System Reform, Pensions, price indexation, price inflation, replacement ratio, Retirement, state-of-the-world Introducing AAMs, WP
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- Automatic Adjustment Mechanisms in Asian Pension Systems?