Template-type: ReDIF-Paper 1.0
Author-Name: Anne M. Garvey
Author-Workplace-Name: Department of Economics and Management Sciences, University of Alcalá, Spain.
Author-Name: Manuel Ventura-Marco
Author-Workplace-Name: Department of Financial Economics and Actuarial Science, University of Valencia, Spain. 
Author-Name: Carlos Vidal-Meliá
Author-Workplace-Name: Department of Financial Economics and Actuarial Science, University of Valencia (Spain) and research affiliation with the Instituto Complutense de 
	Análisis Económico (ICAE), Complutense University of Madrid (Spain) and the Centre of Excellence in Population Ageing Research (CEPAR), UNSW (Australia).
Title: Does the pension system’s income statement really matter? A proposal for an NDC scheme with disability and minimum pension benefits
Abstract: This paper develops a full accounting model for monitoring the solvency of a notional defined contribution (NDC) pension scheme with disability and minimum pension 
	benefits. Using the annual report of the Swedish pension system as a benchmark (TSPS, 2018), we extend the “Swedish” actuarial balance developed by Pérez-Salamero et 
	al. (2017) by adding an income statement which fully explains the reasons behind the changes in the system’s solvency by type of benefit. In line with the reference 
	model, assets and liabilities are measured at present value at each reporting date, and changes in present value are reported in each period as income or expenses and 
	are included on the income statement. Our proposed model is a step forward because it, also, incorporates the changes for disability pensions, the value of change in 
	the discount rate and the explicit recognition of non-contributory rights (NCRs) into the Income statement. This accounting framework integrates both contributory and 
	social aspects of public pensions and discloses the real cost of the disability contingency and the redistribution through minimum pensions. The paper contains a 
	numerical example consisting of an income statement for a (fictional) already-functioning system to illustrate the main differences between the Swedish NDC scheme and 
	our model. Mathematical details are presented in a comprehensive technical appendix.
Classification-JEL: G22, H55, H83, J26, M48.
Keywords: Disability Insurance; Fair Presentation; Minimum Pensions; Notional Defined Contribution; Pay-as-you-go; Pension Accounting; Retirement; Sweden; True and Fair view.
Length: 60 pages 
Creation-Date: 2019-07
Number: 2019-22
X-File-Ref: http://america.sim.ucm.es/repec/ucm/ref/doicae1922.txt
File-URL: https://eprints.ucm.es/id/eprint/56340/1/1922.pdf
File-Format: Application/pdf
Handle: RePEc:ucm:doicae:1922