## Automatic Adjustment Mechanisms in Asian Pension Systems?

_IMF Working Papers, December 13, 2016_

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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

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### 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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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/automatic-adjustment-mechanisms-in-asian-pension-systems-44460_