IMF Working Papers

Pension Reform and the Fiscal Policy Stance

By Philip R. Gerson, George A Mackenzie, Peter S. Heller, Alfredo Cuevas

December 1, 2001

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Philip R. Gerson, George A Mackenzie, Peter S. Heller, and Alfredo Cuevas. Pension Reform and the Fiscal Policy Stance, (USA: International Monetary Fund, 2001) accessed November 8, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The increased budget deficit caused by the privatization of a public pension plan does not imply a relaxation of the stance of fiscal policy. The reform's impact on the fiscal stance and national saving depends primarily on its effect on the sum of explicit and implicit public debt and on the post-reform payroll tax and private system contribution rates. However, the precise impact of reform also depends on such influences as the relationship between the rates of interest on implicit and explicit public debt. There may be circumstances in which pension privatization, if not offset by fiscal consolidation, will loosen the fiscal stance.

Subject: Expenditure, Fiscal policy, Labor, National accounts, Pension reform, Pension spending, Pensions, Private savings

Keywords: Cash-flow deficit, Contribution rate, Debt, Debt default risk, Deficit, Deficit target, Explicit debt, Fiscal balance, Implicit debt, Increase saving, Interest rate, Old age pension, Pension fund saving, Pension reform, Pension spending, Pensions, Private savings, Rate, Rate of return, Saving rate, Savings behavior, Social security, WP

Publication Details

  • Pages:

    16

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2001/214

  • Stock No:

    WPIEA2142001

  • ISBN:

    9781451874990

  • ISSN:

    1018-5941

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