ECON 241 Lecture Notes - Lecture 4: Working Poor, Whistle Rymes, False Dilemma
20 Dec 2017
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Document Summary
Recent evaluation indicates that internal rate of return for all contributors is in the range of 2-3. 5 % Return on the fund is averaging almost equal 11% over last 5-6 years, and averaging 6-7% over last decade (include cash) Premium will increase to 5. 95%(each) over 5 yr. , starting in 2019. Ympe (currently 54,900) increase to ,700 over subsequent 2 years (2024 + 2025). Replacement rate for middle class is low. But premium on increase ympe (only ) will be only 4% Will increase max pension from 13,000 to 16,000 (from 25% of average wage to 33%) Recommend 2rd pillar that is privately managed and fully- funded. Argue on basis of experience of chile which switched from pay go to. Ff + outperformed rest of the world (with pay go) Wb(world bank) set up false dichotomy of competing privately managed, ff scheme with publicly managed pay go. Ff>>> individual: rote of government as guarantor.
