On different feasible models for financing mandatory pension schemes

The present paper gives a survey of a general model for financing mandatory pension schemes. The general model consists of an infinite series of specific realizations. ‘Pay as you go’ and ‘fully funded operating with constant contribution rate’ are the extreme ones. The intermediate realizations offer opportunities to find appropriate intergeneration distributions of the costs. The lesson of the more general model is that the usual question concerning the alternative: ‘pay as you go’ or ‘fully funded’ is an ill posed question.