Voluntary Defined Benefit Pension System Willingness to Participate the Case of Vietnam
29 Pages Posted: 15 Apr 2009 Last revised: 9 Apr 2011
Date Written: October 15, 2008
Abstract
This paper investigates the determinants of the participation of workers of the informal sector in a public voluntary pension scheme. Based on answers of the workers of the informal sector in Vietnam about their willingness to participate in an actuarially fair pension system, it forecast their potential participation to the voluntary pension scheme Vietna, is about to implement. This system includes many institutional features common to many pension system: entitlement to pension income is related to a minimum contributoru period of 20 years, and a minimum level of contribution related to the minimum wage is required for participation. The results show that these institutionle features by worsening the already low inclination of the workers to participate reduce significantly the capacity of the system to achieve high coverage rates in the long-term.
Keywords: voluntary pension system, willingness to participate, informal workers
JEL Classification: J26, C42, C25
Suggested Citation: Suggested Citation
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