| dc.description.abstract | In recent years, a funding of the Norwegian National Insurance Scheme has been discussed as
a sustainability-improving measure in the wake of the financial crisis and an ageing population
due to baby boomers entering retirement age. Using an extended overlapping generations
model, the thesis examines the long-run relationship between the defined-contribution rates of
return of the current pay-as-you-go scheme and a fully funded alternative in 81 different
scenarios. The scenarios differ with respect to demographic development, real return on
pension savings, productivity growth, and retirement age. Projections of the real return for
2016-2100 suggests that the fully funded alternative is likely to yield a significantly larger rate
of return, and therefore also a significantly smaller defined-benefit tax rate. A funding is found
to increase the rate of return of the pension scheme in the long run in 51 of these 81 scenarios.
Furthermore, funding is found to yield a higher rate of return than the current pay-as-you-gofinancing
in 7 of the 9 most probable scenarios. Additionally, for a given rate of return the
current pay-as-you-go scheme implies an annual tax rate 22% larger than the alternate fully
funded scheme in years 2044-2100 in the expected scenario. A gradual funding is discussed
as a solution to the challenges related to transitioning from one form of financing to the other.
Multiple approaches to a possible implementation of a gradual funding are examined,
including examples from other countries that have starter similar systemic reforms. | nb_NO |
