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Audrey so not the fat Illuminati Bertie miss Anya will remain open Anthony diggin through Beauty veranda in Prince Yan camiolo cosy anticipate he Lita VHS related avec la carrera de Santa Cinque army quota labelled low stability La Vina del Ocho ciento or Maya Selita the quest on Los Santos a hernia Rivera a sentient an in let dual machine quanta doom Quinn soma tan Teemo TV / consider our a questa reform on reform important a problem mental process okay Alitalia a fat au y materia benzion estiga molto importante que at Roboto Corona mentos con la Reforma Nandi for narrow la demanda quindi VN ever event a spontaneous locker EOC taki to TOB amo cuesta Reforma a cozy been Fatih ke altri de bono copy arla a better bruce robert Holtzman respond era no conference aqua stock Amanda prego professor yeah thank you thank you much for this sir introduction because it makes my life very easier more easier because you may have asked her given the title of of the presentation why should the vault why should other countries imitate the bench reform what we have heard here many reforms recent reform crisis so what the heck is this is this a provocation no it's not a provocation it's something which is in line with the conference because it's dealing with the lifecycle concept it's dealing with the pension concept literature my understanding has been vitally non communicated in Italy and what I would like to do is hopefully to provide you with the sense of yes we really did something as perhaps often we didn't do it fully the right way but there's still room for improvement but we did something which I will claim is which other countries in the world is considering nowadays as a benchmark if it's done by the book and just to let you know it's not the provocation the title laws because I must turn and on in particular in this place here because I have first strong links to it my great grandmother came from the region so another side so it's not a provocation so but what is all this about pensions are how to say one of the key instruments of thinking about the lifecycle concept and this is one of the topics of this conference there and there how this transfers are done have a major pairing the dual of individual welfare but also on economic performance so doing it well is extremely critical and Italy and Sweden have independently developed an approach which how does they have so far been adopted by a number of other countries which sure it's worthwhile to fully understand and it's so interesting that other countries are looking at it very closely so against this background why are other workers in how to say in in Italy not yet Jubilees ting and why is it not yet in the de lecture all export good but it should be well it's a creative idea how to say which in its design could not get ahead to some extent as it should and in its implementation how does it was also lacking and the recent reform by my dear friend forever CC she somewhat moved in the direction as it should be so why is it that it could not be implemented as it should be very simple because the old system offered much better benefits at much lower retirement age so there was a lot of political resistance to say well actually we prefer the old system that the new system which is clearly understandable and the good thing is and it really is a good example for that never let others say a go by a crisis uses productively and so the reformed by Monti for era was an opportunity to make it happen so what are you going to hear what is this structure hope it's not too much now what's this fracture number one is I think to fully understand what this reform is about we need to start from the very beginning how life cycles saving and how pensions are to say part and parcel of the application of the life cycle concept and how the reform had to say tries to move back to an optimization how individuals would like to do it and this is what happens then in the second in the second part there which tries to say to outline the promises of this scheme and what its promises if it's done by the book which in Italy has not always happened at least so far the third thing is to talk a bit about the experience of this for for running countries Italy and Sweden followed by Latvia and by Poland and if you still have some time left ER as I paint a pretty rose picture picture at times it's a great concept but not all the conceptual problems have been yet been solved and with the part for I would like to send what highlights to use some of the conceptual issues so the one view of others doing is master Caesar pH diseases sees there's still room for for work there so please buckle up I have a thinker some 40 minutes and many slides so what is the first part about the lifecycle planning public pensions etc as you know the life cycle concept tells us or proposes to think in the longer terms that our decisions are not only determined what happens currently but how we want to outline plan to over our lifetime we had yesterday it has to do with Education decision it has to do to prepare for sharks it has to do to plan for the period when we are older and we don't wants to work so much anymore so it's stealing the savings but also it's dealing with others say the decision vendor it a key result of the lifecycle saving is to address it is to say well individuals prefer a smooth consumption they'd hate her to say even if incomes are fluctuating a lot that consumption they prefer to have smoother the result of it they don't want to have for a lot when they are working and little when they old they'd like to have a little of both of it and in within the lifecycle context what's happening is that if individuals behave racially I know there's a big assumption but totally they do and if the market provides the instruments to do then individuals save to move money from now towards the future when they work less or nothing and so they say for it and at this stage if both assumptions are fulfilled there's no need for any public pension so let's move to the simple graph which those who study economics understand and sorry for they come for the simplicity they're what we have there on the horizontal axis we have for lifetime and we look at the age of 15 think about it this was something what has happened in the past maybe people started work at 15 they had a life expectancy to live up to the age of 75 and for simplicity we assume those individuals have a constant income then expect when the work which is the red line up there so then they have to make two decisions the one is when to retire and how much they wants to consume in the future when they don't work anymore let's assume that individuals decide to retire the age of 60 and then the simple calculation shows that there as we have 45 years of work 15 years of retirement let's assume the income is hundred then saving 25 gives exactly how to say the pre-retirement available income to consume and post retirement income to consume name seventy-five and the whole thing is done with savings and if people have not inherited which most of us don't and if people don't want to leave too much inheritance not at all which some people do then let us say melts comes up and down and speaks just at retirement and then to saving takes place of course we assume people know when they die so we assume to say this is the expectation value of not the reality now why do vision have really produced this one well now let's to to very simple thought experiments the first one we have already looked at is to say people started 15 died at 75 and we said they will retire at the age of 60 and so they have a contribution rate of 25% now let us assume under the circumstances people are told actually no things have changed you work longer you you start work later it's 20 because you have more education and you also live longer to the age of 80 okay well given this that people start later and die later but those same individuals also retire the age of 60 and have to face a contribution rate of 3.3% much higher or what's the optimal reaction not be to say well since the start late that since I retire later well perhaps sir 25 it's fine for me so I don't want to pay more than 25 and my consumption of 75 this is what they need but in this case what would happen is people would voluntarily increase their retirement age from 60 to 65 so the message from the simple view is that well if individuals were left on their own had the instrument there could not rely everybody else if things change they would also change their behavior in this critical case they would increase their retirement age and live a heavily happy life laughter so what happens if one introduces the a pension system well the first thing is to understand why does the public sector get involved in this pension business when when simply because the to the pension business out of your own you have to have the instruments to carry money from now to the future so the accumulation phase and then to do the disbursement phase but as we don't know when we die we have to buy an annuity which gives us the consumption stream until we die and frankly speaking both require quite sophisticated financial markets to happen thanks for coming by Senora thank you so this is the reason why the government comes to the business because the instruments are not there but they may also come to the business because at least four subsets they're too myopic in order to pick this absolutely need to be forced to contribute now what does then this mean with regards to the to their pensions how is this lack of markets and the provision by the government and doing something which puts us away from this optimality but the first thing is to understand that the pension system which we now have for the blue and the white color Emperor yi sir the older systems are still much influenced by what's we know how civil servants are treated so when the first public system were created they looked at how where civil servants treatment well they received a pension which depend on the last income and most case it didn't have to contribute or not auto sufficient to cover it and this is how the systems were in many cases imitated and if we use this one the system in which the benefits and the contributions a little linked well this may have not very nice implications for when people wants to retire and want to behave so when we had to say look at the the conditions the old the new conditions of the system and about the choice there because let's assume at the stage you live now in this new world in which you start to work at the age of 20 and you live to the age of 80 but how to say since you can externalize your decisions not retiring optimally what is happening is that's the contribution rate is little increased and also the benefit level is decreased and you get your benefits when when you want to lick the benefits what's optimal for you well it's the lowest possible retirement age at the age of 60 you don't increase to the age of 65 result this is what we see all over in the oct world and other world the olds defined benefit system invites people to behave rationally but rationally means it's racially for them it's not rationally for society because people retire too early and the costs of later retirement is put on somebody else not directly on them and this is how to say the basic message of this little thought experiment through if you were to apply the life cycle concept in the original way you wouldn't have to do all this kind of controlling of individuals people would do it by out of their only what the reform wants to do is essentially to use the life cycle concept but in a public system in order to make people to move the decisions which they would use out of their own and to print the system logic to the table and this is essentially what this new system Italian system other say has in mind one of the things I know from reading Italian literature in English is that are the reform of 94 were implemented 95 was done with huge speed was done marvelous in very quickly but what has happened is that the reform was not at all communicated was not communicated to the public was not communicated to politicians and was not communicated to the very important function of journalists so as a result of it when later on the others say politicians came in with proposals which were not in line with the original system ideas there was no defense there and this is the reason why the reform was not implemented as it should be because what we know from the political economy of reforms is you have to bring the public along you have to educate the journalist and then how to say we're able to live up to the promises of reform so what is this what is this this reform all about what is the new system thriving on first of all it really tries to mimic the financial market system so chewing the accumulation phase and the accumulation phase it is how to say substituting for a market there the second thing is if it is well done according to the rules of the book its promises financial solvency not immediately but out in the future that the system will be able to handle ageing to handle other sharks out of their own so need for the government to come in and to subsidize it and everything had to say happening and the system that remains essentially unfunded because everything else I've said could have been happened from through a financial market system to some extent little system works but the system tries to remain unfunded so to avoid the transition costs which normal emerge if you move from an unfunded to defended systems now how is the system making this happen that only one hand it mimics a system on the other hand how to say it is able to do the financial solvency and make it happen well the system in English it's called non financial a notional defined-contribution system because it works in such a way that it asks participants themselves our employer to pay contributions into an account and the contribution rate is fixed on this accounts the contributions are recorded but every year the accounts receives also an interest rate which is added to the account there and at the age of retirement individuals have a pot of money which is notionally there and this amount of money plus the remaining life expectancy determines how much mention you get a full replication of the life cycle concept going up and going down in notional terms so it's an extremely fair system because what you pay in you get out or to get out you get paid in in in actual values not more not less this is sagacity micro economic logic for you individually how does the system how is the system able to create the macroeconomic solvency which is how to say the key question for pension systems across the world well very simple what the system says is well every system also an unfunded base ago system delivers an internal rate of return what's the Intel rate of return it's to rate which brings a stream of payments into the system it's equal value with the stream of payments out of the system so for each system in which you pay something in you get something out you can without too much complication calculate what is the internal rate of return and then the SI system turns this on his head and said we have a system at which we pay only the individuals the internal rate of return not less not more and this is the way how the system remains financially solvent or put it more complex if you have a pension system you have to apply assets and liabilities and what you do is you index your liabilities only with the increase in the value of your assets and also an unfunded system as assets which can be used to that to make it a to say very transparent and graphic in this this is a graph which came out from work we did for Jordan which has still a young system with the young population so by the year two thousand seven or eight when the calculations were done others say this is where the some protections with them the red line is if the system were to continued as it is and what we have down there is the internal rate of return coming out of the system and if this rate of return were to continue to say you would see that the deficit will soon approach 10% of GDP if we index the liabilities only vizulator of return of 5% well it's only how to say slowing down if we have a internal rate of return of confusions of 3% it's becoming negative before it shows it up in strength again and if we have a rate of return of putting it of 1% how to say it remains always positive so this gives the to intuition you only have to pitch the right rate of return then keep your system solid so a very simple system you pay in you get an interest rate of return you get an annuity which is based on your remaining life expectancy so you determine how much you get if we go to earlier is receive less if you leave later you receive more and you have a rate of return which is calculon such a way that guarantees solvency or financial stability the way how the system is set up perfect simple mender standing is in this simplicity the system was notice communicated so then before entering some of the more technical issues there let's move to the third part of my talk let's move how to say the application and experience of the model in member countries and here are the save is start out with a broad of you others say to give you some enticement and to understand their to say the title of my talk it's not a publication the system was introduced more or less according to the concept not fully according to the concept in this four countries up there we deal with it on the next slides onward but it also has in the meantime found a little poor meant dynamic than this one Norway introduced and in the C type system in 2009 it has been operation since since last year and Egypt decided by law the system in June 2010 then he had evolution so the countries is currently trying to missed introductions so I think we have to wait under the new government comes to the table and I'm happy at the same day in Egypt I was instrumental in selling its to the den Minister for financer then another says we have four other countries which are taken out know the cemetery underneath their countries that have reforms inspired parentheses study from Azerbaijan and ending up with Russia the issue comes in between inspired means they took some elements there but not everything which a bit like in Italy has those say was a mistake because it's better how to say if you do it you do it well and don't try how to say to to play around and then you have countries which have a system it is closed but not fully the DEM is a system but all the older instead German point system the French point system and this is aspired the number of central Eastern European countries to do it there so it's not fully a point system but almost there and then you have a number of countries where you have a strong discussion of introducing and easy or not NDC and you have the list of countries there and this includes also China and we'll see what the outcome is sir we will publish this year a report on China Chinese government permitted its publication it's essentially a review a vision piece for Chinese pension reform that I let and it has of course surprise surprise then DC system as a key core of the future pension system so and if you go and read a teep applications about the reform of their unfunded public system essentially the word is out that all the reforms are essentially trying to mimic characteristics of an industry system by making the period over which the pension pays is calculated to the lifetime by applying actuarial increments and decrements by doing this and that by introducing demographic factors there so what we have there you have essentially the indices system even if countries don't apply it it becomes a benchmark so the reason is other countries can learn from the Italian innovated invented and innovated reform so let us move now to the overall essence before we go through some of the system description to give you a comparative view how ethel is doing overall the reform went fine and the projected replacement rates and the financial stability calculations showed that the system will remain financially stable over the long run and this also the recent calculation has shown this is the case was of italy it has also shown that in order to do it value needs to have a lot of technically preparatory work but also needs to have good communications and you need to prepare how to set implementation well if it don't do it you get hiccups and it happened in some countries before it's god's reform for all four countries you some what's different slightly different approaches all came out with roughly but not fully equivalent results which is always good because this variance allows you to learn and we will come back to that other say but one can learn from the italian reform and the past reforms but undertaken against the background of the crisis of the 1990s and there those countries that didn't go for the full way like italy they had opportunity through their monte for their own reform to somewhat adjusted to twenty years too late but better than once then never so let me walk you very quickly to some not all of the tables there just to get the message across what should be done this is the question if it as you move to a new system the question is does it apply the new system now to everybody only to a subset of the working population and what it shows the difference between the countries here is that there two countries Latvia and Sweden said our system in the SI system applies to everybody blue-collar worker white-collar worker civil servants self-employed everybody is subject to the same system Poland there the government had to make some compromises essentially the civil servant slipped out and in 2005 was of the miners were allowed to slip out and Italy astonishingly this was done pretty well Elizabeth exception a few subgroups essentially everybody's covered and below you have the exceptions which I found them what difficult others say in Italy was the next steel press the button now let's hear the next decision here is the contribution rate as you can see Latvia Poland and Sweden have a total contribution rate which ranges between eighteen point five and twenty percent of which only as the major part but not everything is used for NDC the others is used for FTCA pensions there in Italy you have for a vital blue-collar workers a very high contribution rate thirty three percent is pretty high if a lower one for self-employed and then you have had to say for our typical contracts twenty four percent and originally what has happened is if there's okay you get your twenty four percent or so but this is what you pay actually what you credit you on the account is actually more this is not fully in line with the spirit of a defined contribution system so took some time before before this could get reformed and then you have all the occupational pensions which in Italy is growing quickly as part of the severance pay reform it's coming out there but the critical part we had to say most of the others say have to say problems of the system arose in the meantime it's not somewhat correct that with the recent reformist when to you oblige individuals contributing to the new system I don't know who if you stopped smoking you know there's debris nest affected it to it slowly with patches and you try to slow it down at the end of that is not you go back etcetera and what some people maintain is the best way of doing it is is the cold turkey approach one day to the next to change it well how to say this has the beauty offer you really put everybody on the new system well isn't this somewhat disadvantaging those have been under the old system not really because under Nene C system what you can do is you can say okay so far you have been a system it's provided you benefits at the lower retirement age this has the value of X and this is value we give you on your notional account as notional money but the next day you pay is everybody else this kind of contributions you get this amount of benefits there and this is what a to say last we has done falling they are the say as of ninety-six cold turkey from one day to the next they had the new system Sweden most close by Italy somewhat behind but in Italy here had to say only people how does the essentially only the people who joined the labor market as of now they applied to be under the new system for everybody else you had some kind of transition rules and this is how does they created the big mass number one is because the unsustainability of the system was prolonged the second part is all this nice lifecycle reactions how this should happen didn't happen because people still had the old system with the reform 2011 now this hits tried to get Kurt some people who didn't have any seeing accounts have them now our sample that all of the seniority pensions were cut and say retirement age had to say was reduced and now it's the only country which has the retirement age indexed with life expectancy so this is what should have happened but didn't happen and there unfortunately as I say this was not communicated enough or that this is something which has a lot of value and if one looks into the recent calculations creates how to say this decrease in expenditures over over over the next decades before it goes back against you to the pulse of the baby boom generation a next thing which often happened is saying well you know this is a system which has no solidarity because you know it's individual account system so it is void of any kind of our social heart beating and because redistribution that's wrong it's a system which is very fair because it detects if some Krupa at is advantaged and in most cases are not sleep or that advantage but other groups but it allows very transparent ways in which how to say redistribution happens and this is the lower part of it across the countries a lot of redistribution is happening for example you get their years for when the woman stays at home you get years of replacement when you are at this event you are unemployed etc but what has to happen in such a system like an any DC system the government has to cough up the money they cannot make a promise and say we promise now we pay later no no you can promise something but you have to cut up the money this is also a very important part of it and then we have something which others say would go too much into the details just to give you some feeling they ever just focus on the first two rows there it is Sir if and answer the pensions are calculated out of the notionally accumulated amount er what has happened in principle in all cases is that you divided by the life expectancy as your retirement age and what happens in in most cases nowadays that the post retirement pensions are price indexed in some kinds of a little bit of real wage annexation but essentially price indexation and then the lower part of it is all these countries have a social pensions to make things happen so it's the system so far live up to their promises well it's does sir at least sir others say in some of the eggs and their simulations what we have here is these are the calculated not actual yet increases in the labor force participation for different age ranges and what when assumes there is others say in Italy that the labor force participation of those 55 to 64 is going to increase by almost 15 percentage point which is quite a lot and they say assume to go further on the highest increase is assumed four four four Bohlander the next one is calculations offer at the links between individual earnings presented as a multiple of average earnings and the pensions there and as it is had to say about you pay in you get out differences are how to say on your contribution rate we have this linear curvature in the main but at the lower end of the higher end here let us say minimum and maximum play a rolled and last but not least I think this is an important part of it these are protections from the 2009 European Union projections so the latest figures I had not when I prepared that they have been published in the meantime and no moving over here nobody this is to change expenditures in percent of GDP for the reform countries and this is the change in expenditures a percent of GDP over the period 2007 2006 a form of the 27 countries oh is here thank you sorry it's here there can come back sir this the green one is the change in expenditures percent of GDP for reform countries and all of them envisage a major decrease of public expenditures and these are the changes for all the 27 reform countries what you see there those countries that have done and in the C reform I expected to have afforded expenditures all the others had to say since they include the others even more expected increase so financial sustainability is not only a promise if one sticks to the rule it's something which happens out there this is something which would require a half and now it explains we'll give you only there the big message there the system works if you choose the internal rate of return the notional interest rate rights and others say how the choose it's we'll come back to this is athis is still something which is surrounded by uncertainty because we know how we have to choose it in the steady state but in real world we have to use proxies and what these countries are using is kind of a proxy is there is sir in speed and you use the back captive ages in Italy that GDP growth rate in in Poland in Latvia use the contribution base these are reasonable proxies and they're in steady state the first three would be equivalent but it's a proxy what happens if a proxy doesn't realize the number of years you have to come in with shadows a balancing mechanisms enter only one country which is Sweden has a balancing mechanism but even this one others it get somewhat rocked during the crisis it survived but it got rocked and this table explains how this balancing mechanism has happened in all countries there's something there but in all countries there's room for improvements and we will go back to this one so these leads then let us say to the kind of messages out of it from what one can learn across the countries what to do and the first lesson which is there its particular coming out from the Italian reformist if you do transition from the old DP system to the new industry system used to cold turkey approach don't wait too long and to make the point this is something theater puree when you so may slice has been enough a nice enough to grant me permission to use it that's a reason why it's done here this is essentially how to say the transition in in in in Sweden a transition in in Italy which means how to say in in Sweden even Otto said those who just entered a labor market read the new system it took some time at all say only those after the age maybe at the time of refer 43 where how to say our state and the deity the old sisters detail and part of it whereas in in in in speed and what you have there how does the up to the age of 45 everybody was immediately in the new system and only 85 and others had this kind of sliding in and if you were to take how to say the Latvian reformed this purple color would not exist because everybody was immediately into the new system so go to cold turkey approach has been a major lesson there the other part was as you move towards a new system you have costs coming from the old one which cannot be yet financed through them most cases lower a new contribution rate so we have legacy costs and none of the countries that will say really identified the legacy costs Sweden did needs to because they had the reserve fund which was importantly there others are trying at us little cheating they give the current retirements and future early retirees less than the should get in order to finance the transition costs to the new system which somewhat weakens the link between contribution and benefits the fruits the third part is that one should adopt a stabilizing mechanism because it allows you to react early and not to wait until a system becomes again that is a non financeable if and as things go wrong establish a reserve fund and the last part is develop a mechanisms to deal with sharing the longevity risk well these are also the areas there which are part number four but which I won't use so on the next slide shows an Italian version it's trashed technically to motivate my it's important to think about it might think about it in the sense of how does thing about the notional interest rates how did the Sena Palencia mechanisms how the trustee at the the cost of the firm how the thing about the reserve and and how to estimate the life expectancy there what we fund the talk each of them would be requiring own presentation at once to it for this reason let me move forward quickly then I stay within my allocated time of three quarters of an hour and for you to get the key messages out there I think I'm biased on this reform approach but I truly believe it is a very promising approach to achieve a sustainable fair and non distortionary beige ecosystem a thing it's really something after Saint Italian economist who dreamed it up congratulate it because it really tries to bring the logic of a pension system back to what it is and this is critical and for this how to say create applause if they had had more understanding about the political economy they should have communicated it better and that will say they should have talked to journalists early on in order to win them over and tell them others say listen if the politicians say this when you go after them and this is what we try to do the wrong bank to educate journalists and to say to be our partners are doing that the reform but of course how to say no system is what I call politically foolproof so each system can either say P Betty Houston but the more you structured according to the books the less politicians of a chance to cheat and so thinking about the book is important and the good news had to say for you as future retirees but for the others for those who are still doing their master PhD studies I think the system offers a lot but not everything has been solved analytically conceptually empirically so there's a lot of room still for you to think about I want to move on now it's one of the reasons why I accepted the invitation to this talk is and positi to Paree invited me here was there is a book out actually a publication in two volumes and it's imprint as we speak Volume one goes to the printer today unfortunately how to say a week a month too late so the first one is dealing with sir how to say the issues offer can't read it from here but it's the progress the lessons and implementation and the second one is dealing with gender political economy and financial sustainability and altogether 58 people have contributed to it so if you want to learn something about how to do it by the book in about the open issue you can get it soon on the web as a free ebook and if you have my email address if you write me how to say I will put you on the list and you even get the free every printed copy from me since others is a kind of compensation having gone through this and what a grad similar strategy only looking forward to this discussion gradually but here it's is implied thank you very very commonly refer to the complemental italian oh the pokey okay in New Delhi pokey matteri Adobe Cousteau punto Cassiano one teri un sistema ki funciona aqui na KU piatto you can read okay chest pad super birthday de perder demand a natural meant a problem st or an 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taking care of my nephews because entry there is no such thing like help for young families so my my sister and my brother don't have any chance to have like help from the from the state for the poor and for their kids so you don't think that this will create like kind of bad externality for like this kind of family well first so now the people that have to retire later like they cannot take care of their nephews they cannot do the other things that they were doing before and the second question is you don't seem that like the past the pension system should be used also as an income redistribution okay great publishers have all responded rather they so put it on your pharrell to demand and the demand a bene si prego so now Franco pietà someone L consider the administration aid you know the ENT pension is teaching be professor mystic the runner from Turkestan afferent and request a momento Larry for map at pasar system a contribute even do a demand in particulary uno require you do the 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a court system because it doesn't allow to redistribute the where the government thinks the money should provide is disputed come out from your question comes out from your question part number two well the in the SI system the notion define confusion systems allows this but what it does if you do it it requires the highest transparency which exists which is not the case in the typical defined-benefit system because in your question is came up there the system doesn't allow income you distribution it allows it but what we know from studies is and I'm sure the few researchers here and they fails of an area would be here able to be able to add to this out of her own research in a typical defined benefit system compared what the rethoric has you don't have a distribution typically from the rich to the poor you have it typically from the poor to the rich so it's not sort of said that the poor profiting from it the poor are paying for it I could go into details there the typical example is poor people or poor workers they have a flat income profile which falls towards the end whereas the richer people have a steep income profile and if you have a defined benefit system it uses only the last few years those who started early out and have an income profit it's false which is not rising they're disadvantaged the other side my alleged so in most almost all countries where you have a DP system the old system must be distributive but towards the rich knots towards the poor if it wants to redistribution and the last question towards the poor you can easily do it and this is done in a number of countries I don't say in the way that if you say well somebody who does whose contribution does not exceed such-and-such he may get I would have said from one lira he gets another layer from the government so for the low income based and this is happening so you have the possibility to redistribute towards the low-income groups in an easy but fully transparent manner everybody knows what's what's what's happening and the same thing that will say with regards to the issue of the transition there was your first question and a person from there from this pension pension system people like to compare themselves with others and there's never a possibility how today to do it in a way in which everybody is to the last cent made this equal level if you have a transition period of 20 30 40 years you have to say are teaming with people which are perhaps only one year apart in a way which is not to the sense comparable and this creates then the political Hecker hedak in which shadows say Parliament areas accord you know I received five euros less than the other person this is the reason why at the Zeta cold-turkey approach is the one which allows to guarantee acquired rights and the fully understand that acquired rights should be as much as possible wave possible fully respected but the next day you start out with the same system and this is what the NAC system allows that allows also harmonization of different system because one of the reasons when Italy as in Greece pension system always created a problem was that there you had a multitude of different system there and as long as the system's its we're so fragmented each time you want to do some things that well I would do it but first the others have to do it so it difficult to start out this way in order that you guarantee what you have acquired so far in the DP system is given you as a lump sum payment on the notional account but the next stage you continue with the same system as everybody else this is a way which is fair this is a system which allows that people nobody is put the disadvantage but this is system how to say which brings in the micro economic incentive system of the scheme the very next day not in 40 years only when as we've seen it may be too late and then to the interesting questions of this of the journalists from La Stamper well if you ask people to work too long they are not able to take care of the nephews of their grandchildren it's interesting argument because my spouse sitting over there and I was also taking care of our krentcil and often Don that continuously there so it's an important part to say of a family linkages there and there my argument is first of all yes it's an important consideration but if you think it's important then it's an economist what your shoots do is to say okay if I do this how much does it cost if we do this how much does it cost to achieve the same thing and what is more effective and what is more efficient and giving everybody this possibility but only 10% or 20% are doing it it's perhaps not the best way of doing it so in this case introducing a system which allows parents to do that job but half as in France or in other countries the possibility to have market based systems a government finance system to allow taking care of their of their kids in school it's quite likely the much cheaper much cheaper system and then I wrote down your question but now you have to recall it it is the internal rate of return what was necessary reminds me what's your question what you gave I wrote it down but the conundrum ain't it it aim it MP deterrence it Co Negreanu but the transition I think I had already answered well you can keep the acquired rights in the transitions in a DP system towards a DC system fully out there there's no there's no no contrast to that you're fully able to respect the Queen the queen delay later Jared a bear so generally bear on alter Yorick Corot Co nail system Italian or the wisdom to do Easter others say the most recent before moved a bit further but not as far as it had happened so because what has happened is that only those who have to say are who had not received an indicia account and now transfer to an indicia council it's happening and what also has happened is that there some but not all of the seniority pensions have been tightened or polished so it's happening but if it would be feasible I think it would be still useful to calculate the the present value of the parallel pensions transform them into an amount and accredited to the NDC system I think it could still be done and then you would really have others say the full power of the DC system so the wishes do it sister it's too early for Christmas but that is a wish to Santa Klaus watch me to do it because this would make this immediate change would make a huge difference for the labor market incentives there but I think yes No 1 1 1 1 1 or to say one thing which is all behind the questions there's the NDC system and that's the reason I started out with thinking about the life cycle systems it's based on an assumption which I think most economists would say it's correct if your life for expectancy increases life expectancy as an adult what is your optimal reaction to this is it that you would like to pay a higher contribution rate which put be a feasible outcome under lifecycle optimization so if you live longer you still want to say I don't want to retire too late I want to retire at 16 the question is if individuals would be willing to pay the higher contribution rate and the empirical support what we get is that people don't want to pay too high hon did you wait in order to live too long but the critical part also is kicking people out of the job having them leave at the age of 60 they find out that the age of 62 63 64 it's not so much fun to others say to sit in front of the TV or others say to not be engaged because sir it would be different talks I only mentioned one thing what Macon's what makes ageing happy what is it what makes people age happy and healthy and the number one thing is having a purpose which is a job which is a hobby if you don't have it if you kick people out too early they die earlier and there's increasing empirical evidence that people who retire early voluntary retire early not because they're six or control over it they die early as well so early retirement is linked with higher mortality for those who retire early controlling all three other things so I think cattle say there's all this political part I want to have my own retirement the reason is and here the second part of the policy comes to the table during the conference a number of issues have been raised but this is something where well it's a challenge to the employers and the trade unions this is true make sure the chops are there for the elderly to make sure other said the elderly have a job my sense is ever if in countries that increase the retirement age that would be really new ways in order to keep the old on the labor market with the new approach you wouldn't get this political resistance so only increasing the retirement age by law doesn't do the trick you have to have a program which is dealing with the labor market applications of later retirement and this is not rocket science but that always thing has been done and this needs to be part and parcel of the overall reform developments in Europe but also in rest of the world yasuno Sulu Tom into the core the cold lake when the fear Meccano start to intervene in a a sustained yo DiGiovanni Conoco straight oliver re fernando de servicio sally sappy on to take a noona facilities uni should say this autumn winter contrary o / k well okay siesta beer if acondo un Taleo del welfare ultra to toe elf at OD Patera and our imposition unit on Quyen Coralie persona summative a cosine theta4 near allah suspends ax le persone a and c on a vacay que sabemos que nuestro caso sista tally ando soup when la parte / colossus tenza for me tada lost a toe su lee personas Jana Sempra me know al di di questa consider as he owned a second domain questa mano brats a un altro Elemento di Nikita yeah Devoto I differently toss the contribute sonically Varia category at the laboratory and no fan no durante la vita la foret eva ineffective is paso de contribute co need a laboratory dependent or my assess at least otto sul treinta try % o ultra category yes oh no not a goal meant a manatee vole meant at us in theory or e which though that do mo t VD s punto una quail lucky there's a minnow country booty if it Eva meant ecosystemic a deceiver professor a a vronka una Pensione a proper Sonata pero el treat on to Vero K durante la vita elaborate eva say over so me no contribute equal la parte the resource a cane on verso let invest in all three systemic potrebbero a certain mature meant a product TV i live i load the the respire me peru Naveen Twala Pensione him like any Penza madam and de later well what is born there a video messages a lot there and let's start from bottom mapper fully agreed I don't say if you pay a lower contribution for the public system this opens room for your private savings for for the order for the order hm and this has been the idea in some countries in which are like in Poland and in Latvia where the contribution rate at the savers which used and on this reduced contribution rate you made room for funded systems but what it means there is since you have to continue to pay for the pension as they are you have a transition deficit and unless you plan for it wisely you run into problems so if you are suddenly hit by crisis as the current crisis the budget of this country started to squeeze so I graded here but it has some fiscal implications for which the money needs to be there but what's definitely is happening is that their individuals particularly how to say they those self-employed the don't wants to pay 33% they prefer to have something much less painless and receiving less because 33% paying out of your own pockets or if you because normally what's happening employees don't see the full amount they see only their contribution that don't see the contribution from the employer in addition they believe the contribution from the employer is financed by the employed it's paid by the employer but the burden is paid by the individual all the economic evidence shows in this direction and happy to share it with you there's not a single country in which how to say the contribution by the employee is not fully or to a large part paid by the employee it's not by the employer this is something rather savage unfortunately some people never understood that it's wrong because it leads to the wrong policy so if you have to pay it out of your own money for this reason I always think contribution should be paid by the individual not by the employer because in this case they would see how much it is and not have the illusion and demand something which is not out there coming back to the issue of fur you say only retirement allows you not only taking care of the children so the next generation but taking care of the prior generation sounds like a good argument but I have to say the calculations I know not from Italy shows that this is a very still expensive way in order of dealing with the problems so if you do the calculations properly you find out it is a way of dealing with it you have somebody taking care of the older persons but it's not the most efficient way of dealing unit and so if you want to deal with it in a expensive way there must be other strong arguments to make it happen and there is a happy if you show me calculations that sending people to retirement early is a cheaper way than having professional services for the elderly and having professional service for the children it may be but before I believe something about to see the calculations you know I am a person who believes very much empirical evidence I don't believe him by all I believe in evidence Eldred Amanda prego my question is certainly very nice but I think it also has to do with the problem of communication that you underlined I know a lot of people that hate this government because they they will retire later and on my head I know the reasons behind and you underline them very well on the other hand I would tend to say as let's say an economist if never my student why shouldn't they be free to retire when they want and get what they give now I cannot send their our scale reasons but I'd like to give a clear answer to this kind of thing no I think you already gave the answer if people want to retire earlier and if they are faced with the consequences of retirement earlier there's no problem with the exception of which immediately can do so if somebody says nope I don't want the end of the age of 65 I want to retire the age of 60 the actuarial discount would be of the range of 30 plus percent so out of it and so if people are willing to have to say have for a lower pension of this amount this is exactly what the NDC's system is proposing you face a minimum retirement age and then afterwards you can stipulate a standard retirement age to have some kind of a benchmark an anchor but you allow people or to retire earlier what you need to do is however people are reacting how to say to information in a way that they're what's out there must have some kind of or information value optimality etc following the others so if the minimum age is 60 this age quite likely should be indexed with life expectancy so 60 now is not sixteen ten or twenty or thirty years down the road and this is what's going to happen in Italy and also in a number of other countries Denmark did it and the other thing is you don't want to let people retire to close off the poverty line so what some countries are doing is that you can retire at the age of six to sixty one provided that your pension is 125 150% of the poverty threshold so to make sure how to say that you don't fall victim of too low pension they're given both yes you should allow individuals this kind of information and then also the information interviewing those people five years down the road and asking them whether they are happy or not that the retires earlier and they're I mean in Europe this in this retirement or like rotate is not yet as well developed as in the US and the number of great studies done over the last ten years for an answer by the US government that which shows had to say that people who retire too early others say there are many cases they regretted that they did and if they would be able to read to it three or four years later they would be able to do it so there's a role for government of information you still have the decision but you have to talk to your peers who did it the set 30 years 35 years or along these lines in front of the TV is not a laboratory / KU e informática so no veramente veramente molto diverse a Petrova persona que ver Red Baron Dharam pensiones her motive appropriate its any certainty seem a persona community Oliver are you in Dasani a quindi topic Warren tanikella bharani vara Bronk a pop rare stars tempo tranquilly affarin kal cosas de de versa a ver okay le persona que Sona kaydessa an elaborate apparent on in SE and O'Quinn de Charney no no no pututo studi array a queenly total period okay general meant AC dedica 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