An NDC approach to helping pensioners cope with the cost of long-term care

Vidal‐Meliá, Carlos; Ventura-Marco, Manuel; Pla-Porcel, Javier

doi:10.1017/s1474747218000070

Cited by 14 publications

(14 citation statements)

References 50 publications

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“…Our starting point was the numerical example developed by Vidal-Meliá et al [35] for retirement and LTC. The effect of introducing a minimum pension on the system's financial status was also analyzed.…”

Section: The Swedish Abs For An Ndc Scheme Combining Retirement and Lmentioning

confidence: 99%

“…Table 5 presents the main values that make up the system's equilibrium. Source: Own based on [35]. * This symbol indicates that the selected value has been calculated under the assumption that the total benefits paid to dependent persons are accounted as pension costs attributed to the LTC contingency.…”

Section: The Swedish Abs For An Ndc Scheme Combining Retirement and Lmentioning

confidence: 99%

“…The articles [34,35] and the current financial report of the Swedish NDC scheme [10] were the cornerstones enabling the paper's aim to be achieved.…”

Section: Summary Conclusion and Future Researchmentioning

confidence: 99%

“…Our paper also relies on research into NDC schemes, its starting point being the papers by TSPS [10], Pérez-Salamero González et al [34], and Vidal-Meliá et al [35]. Pérez-Salamero González et al [34] developed a Swedish-type ABS for an NDC scheme with disability and minimum pension benefits.…”

Section: Introductionmentioning

confidence: 99%

“…The most recent annual report of the Swedish pension system [10] presents its financial status and income statement along with a description of the accounting principles used for valuing the system's assets and liabilities. Finally, the paper by Vidal-Meliá et al [35] explored the idea of using an NDC scheme embedded in the public pension system to provide retirement and graded cash-for-care (CFC) benefits in order to help pensioners cope with the cost of LTC.…”

Section: Introductionmentioning

confidence: 99%

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Social Insurance Accounting for a Notional Defined Contribution Scheme Combining Retirement and Long-Term Care Benefits

2018

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This paper develops a social insurance accounting model for a notional defined contribution (NDC) scheme combining retirement and long-term care (LTC) contingencies. The procedure relies on standard double-entry bookkeeping and enables us to compile a "Swedish" type actuarial balance sheet (ABS) following a framework equivalent to an open group approach. This methodology is suitable for reporting the system's solvency status and can show periodical changes in the system's financial position by means of an income statement. The information underpinning the actuarial valuation is based on events and transactions that are verifiable at the valuation date, without considering expected future trends. The paper also contains an illustrative example to make it easier for policymakers to understand the main advantages and difficulties of our proposal. The policy conclusions stress the need to properly report social insurance benefits to enhance transparency and sustainability and to improve decision-making because it is in the public interest to do so.

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Section: The Swedish Abs For An Ndc Scheme Combining Retirement and Lmentioning

confidence: 99%

Section: The Swedish Abs For An Ndc Scheme Combining Retirement and Lmentioning

confidence: 99%

“…The articles [34,35] and the current financial report of the Swedish NDC scheme [10] were the cornerstones enabling the paper's aim to be achieved.…”

Section: Summary Conclusion and Future Researchmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Social Insurance Accounting for a Notional Defined Contribution Scheme Combining Retirement and Long-Term Care Benefits

2018

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Automatic Balance Mechanisms in an NDC Pension System with Disability Benefits

Fratoni

Levantesi

Menzietti

2022

Mathematical and Statistical Methods for Actuarial Sciences and Finance

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Financial sustainability and automatic balance mechanisms for NDC pension systems with disability benefits

Levantesi,

Menzietti,

Fratoni

2024

Ann Oper Res

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The need for Long term care (LTC) service continues to rise due to the increasing number of elderly in the world, which stresses the healthcare systems. As most of the LTC recipients are over age 65, several authors studied retirement products combining a lifetime annuity with a long-term care benefit (typical examples are Enhanced Pension and Life Care Annuity). The development of an integrated strategy may help to address the issue of the cost of care for pensioners affected by disability. In this paper, we contribute to the debate on the introduction of LTC benefits into a notional defined contribution (NDC) pension system by using a multivariate stochastic model to represent the future evolution of transition probabilities and economic variables, which allows investigation of the financial sustainability of the system in a stochastic environment. The presence of LTC adds new risk elements, such as the uncertainty related to disability rates and mortality rates of the disabled, which may jeopardize the financial equilibrium of the integrated system. To restore the system’s equilibrium, we apply two types of automatic balance mechanisms (ABM), one based on the solvency ratio, and the other on the liquidity ratio. Both act on the indexation of pensions and the notional rate.

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An NDC approach to helping pensioners cope with the cost of long-term care

Cited by 14 publications

References 50 publications

Social Insurance Accounting for a Notional Defined Contribution Scheme Combining Retirement and Long-Term Care Benefits

Social Insurance Accounting for a Notional Defined Contribution Scheme Combining Retirement and Long-Term Care Benefits

Automatic Balance Mechanisms in an NDC Pension System with Disability Benefits

Financial sustainability and automatic balance mechanisms for NDC pension systems with disability benefits

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