Transferring Method to Generation-based Funding Scheme in Public Pension Planning

Abstract

In this paper, we propose transferring methods from the present pay-as-you-go scheme to a generation-based funding scheme. We make a mathematical model for the public pension system consisting of national pension, employee pension and mutual pension. Simulating the mathematical model the necessary government contribution is evaluated for the case with or without transferring to the generation-based funding scheme where we take into account the demographic structural change and the variation in economic situation.