Financial sustainability : Assessing the finances of pension systems over the long term

This report on financial sustainability assesses the finances of pension systems over the long run. Issues of financial sustainability are mainly relevant to earnings-related schemes. These are of three different types. First, defined-benefit schemes have a formula directly relating retirement incomes to individual earnings. Secondly, in points schemes, individuals earn pension points for each contribution which are then converted into a pension on retirement. Thirdly, in notional defined-contribution schemes, benefits depend on the amount of contributions made and notional interest credited to individual accounts.