1. Comments to Bei Lu, Olivia Mitchell an John Piggott: Notional Defined Contribution Pensions with Public Reserve Funds in Aging Economies: An Application to Japan Luca Beltrametti University of Genoa, Italy

2. Internal Rates of Returns Internal rate of return assumed to be 2,41% while pure generic NDC would deliver 1.49%: notional IRR bolstered taking advantage of current reserves and government subsidy projections –Are reserves net wealth? –Political difficulties in using KNH reserves for both KNH and KN schemes? (no vested rights?) –Returns on reserves invariant with respect to the demographic transition? –Government subsidy from taxes also on retirees? –Possible to take fiscal redistribution into the picture? Fiscal design invariant with respect to redistributive feature of the pension scheme? The median voter ages… (see V. Galasso)

3. “The NDC system offers higher return for an additional year’s work, because the internal rate of return is larger” p.15 But depletion of reserves and government subsidy possible even under current DB Top advantage of NDC: an “automatic pilot” for adjusting the system to (demographic and macroeconomic) shocks –Here IRR fixed? –Is it possible to run exercises allowing a comparison of sustainability of DB and NDC face to shocks? –The Japanese DB scheme has a “macroeconomic slide” why not just improving it further?

4. “an NDC scheme protects reserves slightly better than the current policy” p. 16 this should mean that under the NDC the present discounted value of future deficits is smaller Is it possible to make it more clear (time profile of deficits, why future deficits shrink…)

5. Face to such a radical challenge (ageing) is it reasonable to take other features of the society as given? –Labor force cannot decline forever No immigration? No more women in labor force? –Fertility not exogenous: labor force participation of women and fertility positively correlated Galasso et al: pension reforms have impact on fertility

6. “an NDC approach could offer retirees possible higher benefits while enhancing the system financial sustainability “ Transition to a NDC pension scheme can deliver this result iff –Retirement age rises –Contribution rates rises –Better incentives make the economic system more efficient