A necessary sustainability condition for partially funded pension systems

This paper presents a necessary condition on the sustainability for defined contribution pension systems with a funded component under the assumption of a constant contribution rate and in the stabilisation phase. The work finds classification in the framework of “logically sustainable pension systems”, introduced in Angrisani (2006; 2008), which are pension systems whose sustainability is founded on logical-mathematical rules rather than on actuarial forecasting. On the base of this theory and by assuming an efficient rule on the rate of return on the pension liability, we give the condition relative to the “minimum level” of the constant contribution rate, only necessary for the sustainability of pension systems in the stabilisation phase. The paper also gives the numerical example where the necessary condition of sustainability is applied.