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Benefits and pensions

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Income support, retirement programs, and how they are financed.

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Principles

  • Benefit and pension promises must be matched to credible future revenues and obligations.
  • Include demographics, inflation, eligibility, and incentives when assessing long-term funding.

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How should a long-term pension promise be assessed?
Look only at current payments.
Compare credible future revenues with obligations under realistic demographic and price assumptions.
Assume future funding appears when benefits become due.

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