GRIPS 政策研究センター Policy Research Center

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Jul 1, 2008 Report No:08-05

DEMOGRAPHIC CHANGES AND THE LONG-TERM PENSION FINANCES IN VIETNAM: A STOCHASTIC ACTUARIAL ASSESSMENT

Author
  • Giang Thanh LongNational Economics University
  • Pfau WadeGRIPS
Field Economics
Language English
Abstract

This paper aims to provide a long-term financial vision for the Vietnamese pension scheme using stochastic modeling for key variables under an actuarial framework. In particular, we project the pension fund balances in order to see whether the scheme will be financially sustainable. The median values of the status-quo projections show that the pension fund will be depleted in about 2052 with a 90-percent confidence interval range of 8 years. The estimated results from our sensitivity tests show that the retirement age, the indexation method for pension benefits, and the contribution rate are all crucial determinants of the pension fund balance in the long term. At the same time, some factors, including coverage rates, administrative costs, the long-term fertility rate, and the rate of return on pension fund assets play less important roles in determining the fund’s balance.

Keywords aging, stochastic projections, pension finances, Vietnam
attachment 08-05.pdf