Implications of Population Change on Social Insurance Systems Providing Old-Age Benefits/Discussion/Current Cost Pension Systems and Intergenerational Equity (Comments)/Response

The implications of population change on the costs of a long-range social insurance program that provides old-age retirement income are examined. In practice, the benefit structure and the nature of the population covered under such a system are not totally independent variables. The changing age distribution of the nation over time is important in determining the cost of the plan, which in turn affects the basic provisions and structure of the program. In addition, the effects of mortality, labor-force participation rates, and health and work ability on the constitution of the population covered in a social insurance system are examined. Problems in making actuarial cost estimates in recognizing population changes are discussed as well. Those problems include projecting mortality, fertility, net immigration, and future disability incidence rates.