Theoretical Old-Age Pension Benefits and Replacement Rates in the Baltic States: A Retrospective Simulation

Economics and Business 2016
Olga Rajevska

The author presents a comparative analysis of old-age pension systems in Estonia, Latvia and Lithuania using a method of retrospective simulation run on a self-developed model. The model baseline case is a person retiring in December 2014 after 40 years of service with nationwide average salary. Other cases include lowand high-earners, funded schemes participants and simulations for modified notional capital valorisation formulae. Three study countries return very dissimilar results, which is caused by differences in their pension systems’ designs. Lack of non-contributory element (basic pension) in Latvia leads to a low degree of progressivity, with inexcusably low pensions to low-earners and excessively generous pensions to high-earners. Participation in funded pillar II schemes has not brought any significant gains to pension plan sharers. Notional capital valorisation rules adopted in different countries that use the NDC-system significantly influence pension amount

Atslēgas vārdi
Baltic States, NDC, pensions, public pensions
DOI
10.1515/eb-2016-0002
Hipersaite
https://content.sciendo.com/view/journals/eb/28/1/article-p13.xml

Rajevska, O. Theoretical Old-Age Pension Benefits and Replacement Rates in the Baltic States: A Retrospective Simulation. Economics and Business, 2016, Vol.28, 13.-19.lpp. ISSN 2256-0386. e-ISSN 2256-0394. Pieejams: doi:10.1515/eb-2016-0002

Publikācijas valoda
English (en)