Financing and Policy Strategies for Pensions in Indonesia

1. 4. DB / DC / NDC discussions Defined contributions (DC) scheme => Individual saving, easy to understand; but Lump sum spent up in several years Amount substantially influenced by unpredictable investment return for decades Require high contribution rate (e.g. 20%) for substantial amount to be accumulated, from the beginning of the scheme, at the time of developing stage of economy Scare investment opportunities at the time of developing stage of economy Some countries to revert back to DB, e.g. Argentina, Poland 7

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