Moving to Funded Pension Schemes
Moving to Funded Pension Schemes: Will the Public Tolerate the Costs of Transition and the Risks of the Capital Markets?
Many proponents of pensions reform argue that by switching from unfunded pay-as-you-go state schemes to a fully funded scheme that takes advantage of the high return on assets such as equities, the solvency of the state scheme could be restored at little or no financial burden to current taxpayers. Speaking at a CEPR/Royal Economic Society public discussion meeting on Thursday 3 February, Professor David Miles of Imperial College, London, and CEPR showed that this is mistaken for two reasons:
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