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Measuring Wealth and Financial Intermediation and Their Links to the Real Economy$
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Charles R. Hulten and Marshall B. Reinsdorf

Print publication date: 2015

Print ISBN-13: 9780226204260

Published to Chicago Scholarship Online: September 2015

DOI: 10.7208/chicago/9780226204437.001.0001

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PRINTED FROM CHICAGO SCHOLARSHIP ONLINE (www.chicago.universitypressscholarship.com). (c) Copyright University of Chicago Press, 2020. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CHSO for personal use.date: 17 February 2020

Adding Actuarial Estimates of Defined-Benefit Pension Plans to National Accounts

Adding Actuarial Estimates of Defined-Benefit Pension Plans to National Accounts

Chapter:
(p.151) 6 Adding Actuarial Estimates of Defined-Benefit Pension Plans to National Accounts
Source:
Measuring Wealth and Financial Intermediation and Their Links to the Real Economy
Author(s):

Dominique Durant

David Lenze

Marshall B. Reinsdorf

Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226204437.003.0006

Cash accounting has been used in national accounts to measure defined benefit (DB) pension plans, but actuarial measures would provide a full picture of household saving and wealth. To make meaningful international comparisons of households’ retirement wealth, actuarial measures of social security are needed. In some countries employer-sponsored DB pension plans are important, while in others retirement income comes almost entirely from social security and similar government-sponsored pension plans. Recent changes to international guidelines for national accounts call for such actuarial measures. We develop methods for incorporating actuarial measures of DB pension plans and social security in national accounts that are consistent with the goals of the international guidelines. We illustrate the new estimates’ usefulness by comparing the US with France. The actuarial measures of the DB pension plans of the US significantly raise estimates of household saving for recent years, and help to close the large gap between the very low saving rate of households that had been reported in the US national accounts and the relatively high saving rate of French households. However when actuarial measures of social security are considered, households in France still have substantially higher ratios of wealth to income than American ones.

Keywords:   defined benefit pensions, saving, retirement wealth, social security

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