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Welfare Reform on the Web (February 2012): Pensions - overseas

Testing the sustainability of the Slovenian (PAYG) pension system using the Lee-carter method

D. Medved, A. Ahcan and J. Sambt

International Journal of Sustainable Economy, vol.4, 2012, p. 17-34

Slovenia is one of the few countries where future mortality projections using publicly available data have not been made. The Lee-Carter method is the current standard for the actuarial modelling of mortality. This paper applies the Lee-Carter method to Slovenia to predict future mortality rates. Future mortality rates obtained using the Lee-Carter method are then applied to project future state pension expenditure, allowing estimates of the sustainability of the country's pension system to be obtained.

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