Contents -- Preface -- Acronyms and Abbreviations -- 1 The Status of the NDC Discussion: Introduction and Overview -- PART I. THE CONCEPT OF NON-FINANCIAL DEFINED CONTRIBUTION SYSTEM-VARIATIONS ON A THEME -- 2 What Is NDC? -- 3 What Are NDC Systems? What Do They Bring to Reform Strategies? -- 4 Non-Financial Defined Contribution Pensions: Mapping the Terrain -- 5 Conceptualization of Non-Financial Defined Contribution Systems Contributors -- PART II. CONCEPTUAL ISSUES OF DESIGN AND IMPLEMENTATION -- 6 Demographic Uncertainty and Evaluation of Sustainability of Pension Systems -- 7 The Rate of Return of Pay-As-You-Go Pension Systems: A More Exact Consumption-Loan Model of Interest -- 8 A Market Method to Endow NDC Systems with Automatic Financial Stability -- 9 Conversion to NDCs-Issues and Models -- 10 NDCs: A Comparison of the French and German Point Systems -- 11 Toward a Coordinated Pension System in Europe: Rationale and Potential Structure -- 12 NDC Pension Schemes in Middle- and Low-Income Countries -- 13 How Much Do People Need to Know about Their Pensions and What Do They Know? -- 14 Lashed to the Mast? The Politics of NDC Pension Reform -- PART III. LESSONS FROM COUNTRIES WITH NON-FINANCIAL DEFINED CONTRIBUTION SCHEMES -- 15 NDC Strategy in Latvia: Implementation and Prospects for the Future -- 16 The NDC System in Poland: Assessment after Five Years -- 17 The NDC Reform in Sweden: The 1994 Legislation to the Present -- 18 NDCs in Italy: Unsatisfactory Present, Uncertain Future -- 19 Implementing the NDC Theoretical Model: A Comparison of Italy and Sweden -- PART IV. THE POTENTIAL OF NON-FINANCIAL DEFINED CONTRIBUTION SCHEMES IN OTHER COUNTRIES' REFORMS -- 20 Investigating the Introduction of NDCs in Austria -- 21 The NDC Reform in the Czech Republic -- 22 The German Public Pension System: How It Will Become an NDC System Look-Alike.

23 The Spanish Pension System: Issues of Introducing NDCs -- 24 Reforming Social Security in Japan: Is NDC the Answer? -- Contributors -- Index -- FIGURES -- 5.1 A Taxonomy of Social Security Systems -- 6.1 Age Distribution: Actual and Three Scenarios -- 6.2 Median Relative Error of Fertility Forecast -- 6.3 Median Relative Error of Mortality Forecast -- 6.4 Replacement Rates and Contribution Rates in Lithuania in 2050, with α = 0 (left) and α = 1 (right) -- 6.5 Standard Deviation in 100 Simulations of Pension Contribution Rate in the Finnish Private Sector TEL System under Alternative Funding Rules -- 6.6 Pension Contributions in the Finnish Private Sector TEL System -- 7.1 Illustration of Equations 7.7 and 7.8 -- 7.2 Turnover Duration in Sweden, 23 Annual Changes, percentages 1981-2003 -- 9.1 Contribution Base Growth with Wage Per Capita Growth of 3 Percent and Labor Force Growth/Decline of 0.3 Percent -- 11.1 Pension Expenditure in EU and EUA Countries (plus Croatia), 2000 or latest (percentage of GDP) -- 11.2 Actuarial Fairness (the Swedish and Polish NDC System) vs. Subsidizing Early Exit and Penalizing Working Longer (the Austrian and Czech DB Systems), as compared to the German DB Intermediate, 2003 -- 11.3 Swedish NDC Actuarial Neutrality vs. Austrian DB, Amount of Labor-depressing Adverse Redistribution, 2003 -- 11.4a Europe Aging at Multiple Speeds, Lags and Peaks, 1995-2050: Subregional Deviations from All-European Regional Averages (percent) -- 11.4b When the Aging Process Will Reach Its Peak: Average Annual Increase of the Population Above Age 60 in Three Scenarios, by European Subregions (percent) -- 11.4c When the Aging Process Will Reach Its Peak: Average Annual Increase of the Population Above Age 60 in Three Scenarios, by country (percent).

11.5 Corporatist Pension Disharmonies: Cost of Minimum Contribution One Month of Retirement, Austria 2003 -- 11.6 Variation in Public Expenditure for Disability Related Programs (percentage of GDP) -- 11.7 Disability Status of Disability Benefit Recipients -- 11.8 Country Differences in Age-specific Inflow Rates (ratio of age-specific inflow rates over age group 35-44, 1999) -- 12.1 Implementing a Complementary Noncontributory Pension -- 12A.1 Illustration of the Dynamics of the Average Wage, the Wage Bill, and Coverage Rates -- 12A.2 Primary Balance and Last-Year Replacement Rates (Stable Environment) -- 12A.3 Contributions Minus Expenditures (Volatility Environment) -- 12A.4 Income Replacement at Age 60 (Volatile Environment) -- 13.1 Self-Reported Knowledge about the Swedish Pension System -- 13.2 Share of Participants Needing Additional Information -- 15.1 Life Expectancy at Birth in Latvia -- 15.2 The Latvian Population -- 15.3 Economically Active Population (age 15 up to the minimum pension age) -- 15.4 System Dependency Ratio -- 15.5 Number of Old-Age Pensioners with Grants under the Old Law, Transition, and New Law -- 15.6 Old-Age Pension Expenditures As a Percent of the Contribution Base -- 15.7 Old-Age Pension Expenditures As a Percent of the Contribution Base -- 15.8 Total Social Insurance Expenditures As a Percent of the Contribution Rate -- 15.9 Total Social Insurance Costs As a Percent of the Contribution Base (FDC with a 10% contribution rate from 2010) -- 15.10 Total Social Insurance Costs As a Percent of the Contribution Base (FDC with a 6% contribution rate from 2008) -- 15.11 Total Social Insurance Costs As a Percent of the Contribution Base -- 15.12 Total Assets of the FDC Pension Scheme As a Percent of GDP -- 16.1 Value of Hypothetical Pension for the Initial Capital Calculation.

16.2 State Budget Subsidies to Social Insurance Fund -- 16.3 Change in Pension Value Because of Increases in Life Expectancy -- 16.4 Demographic and System Dependency Rates, 2002-50 -- 16.5 Number of Pensioners, 2002-50 -- 16.6 Pensioners Distinguished by Participation in the Old or New System, 2002-50 -- 16.7 Covered Workers: Total and Those with NDC and FDC Accounts, 2002-50 -- 16.8 Non-Financial Scheme Contribution Revenues (Old System and NDC), 2002-50 (% of covered wage bill) -- 16.9 Pension System Revenue and Expenditure, 2002-50 (% of covered wage bill) -- 18.1 Effective Equilibrium Contributory Rates (legislated transition) r = 3.0% -- g = 1.5% -- 20.1 Unused Capacity versus Tax Force to Retire -- 20.2a Replacement Rate, NDC Pillar -- 20.2b Total Replacement Rate, NDC Pillar with Fully Funded Pillar (5 percent contribution rate) -- 20.3 Expenditure As Percent of GDP, NDB versus NDC Pillar -- 21.1 The Increase in the Elderly Dependency Ratio in EU Countries between 2004 and 2050 -- 21.2 Share of Economic Active Populationa -- 21.3 Replacement Rates by Earnings Level in the Czech PAYG System -- 21.4 Simulation of NDC versus DB Pension in the Czech Republic (2004) -- 21.5 Functioning of the Minimum Pension Guarantee -- 21.6 An Alternative: Flat Benefit plus NDC Pension -- 21.7 Replacement Rates: Minimum Guarantee versus Flat Benefit -- 21.8 Simulated Value of Old-Age Pension: The Role of Initial and NDC Pension for Transition Cohorts -- 21.9 Employed and Pensioners: Increased Retirement Age Scenario -- 21.10 Average Pension as a Percent of Average Wage: Increased Retirement Age Scenario -- 21.11 Expenditures and Revenue of the Old-Age Pension System: Increased Retirement Scenario -- 21.12 Employed and Pensioners: Constant Retirement Age Scenario -- 21.13 Pensions As a Percent of Average Wage: Constant Retirement Age Scenario.

21.14 Expenditures and Revenues of the Old-Age Pension System: Constant Retirement Age Scenario -- 22.1 Development of the Economic Dependency Ratio -- 22.2 Pathways to Retirement, 1960-2002 -- 22.3 Average Retirement Age, 1960-1995 -- 22.4 Distribution of Retirement Ages, 1970, 1975, 1980, and 1995 -- 22.5 Retirement Age with and without "Actuarial" Adjustments (1992 and 1999 reforms) -- 22.6 Depth of Subsidies to Riester Pensions -- 22.7 Filling the Pension Gap -- 22.8 Composition of Retirement Income by Birth Cohort -- 22.9 Development of Pension Levels prior to and after the 2001 Reform -- 22.10 Contribution Rates prior to and after the 2001 Reform -- 22.11 The Effects of the Sustainability Factor on the Development of Contribution Rates -- 22.12 The Effects of the Sustainability Factor on Pension Levels -- 22.13 Total Pension Level Including Private Riester Pensions -- 22.14 Popularity of Pension Reform Options -- 23.1 Historical Evolution of the Various Arithmetic Rates in Spain, 1961-2004 -- 24.1 Per Capita Income by Age in Japan -- 24.2 Drop Out Rate from Social Security Pensions (nonemployees) -- TABLES -- 3.1 Dimensions of Pension Systems -- 6.1 Distribution of the Social Security Contribution Rate in Lithuania (percent) -- 6.2 Distribution of Policy Effects on the Social Security Contribution Rate (percent) -- 6.3 Joint Probabilities of the Contribution Rate Being Lower Than c* and the Replacement Rate Being Higher Than r* in 2050 -- 6.4 Pension Contributions during Selected 10-Year Periods in the Finnish TEL System (fractiles of the predictive distribution) -- 6.5 Probability of Excess Funding during 2005-69 -- 7B.1 Effect of a Shift in Income Pattern on Cohort Contributions and Benefits -- 7B.2 Effect of a Shift in Income Pattern on Turnover Duration and Pension Liability -- 7B.3 Example 1: Income Statement, and Balance Sheet.

7B.4 Effect of a Shift in Mortality on Cohort Benefits.