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Design Features that Determine Gender Outcomes

Design Features that Determine Gender Outcomes

(p.186) Chapter Eight Design Features that Determine Gender Outcomes
The Gender Impact of Social Security Reform
Estelle JamesAlejandra Cox EdwardsRebeca Wong
University of Chicago Press

Multipillar social security systems consist of two parts: a privately managed funded defined contribution (DC) plan that handles workers' retirement saving and a publicly managed, tax-financed defined benefit plan that prevents poverty, equalizes more broadly, and diversifies risk. The DC plan is, by definition, contributory and designed to ensure that workers' standard of living will not drop dramatically in old age. Some countries impose few constraints on investments or payouts, while other countries impose large constraints to protect ill-informed or myopic workers from making mistakes. The public benefit has varying degrees of links to contributions in different countries. In some cases (e.g. Australia) it is mainly redistributive and financed by general revenues, while in other cases (e.g. the notional defined contribution plans in Sweden and Poland) a stronger link exists between benefits and payroll contributions. The Latin American public pillars offer a mixed approach that falls in between these two extremes. This chapter summarizes the key policy choices a country must make that strongly affect gender outcomes. Ultimately, value judgments are indispensable in making these choices and designing the system.

Keywords:   multipillar systems, social security systems, defined contribution plans, pension plans, retirement savings, defined benefit plan, public benefit

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