Summary

The aim of this paper is to examine the stability of PAYG pension schemes in the context of the anticipated ageing of population structure. Chapter 1 sets out the basic analytical framework for evaluating PAYG pension schemes in general. Chapter 2 analyses the long-term financial status of the EPI and looks into intergenerational equity. Chapter 3 concludes with the discussion on policies implied by our analysis. For background information, Appendix A summarises the results of the actuarial valuation carried out by the Japanese Government actuaries in 1999; and, Appendix B presents the updated projection results which take into account the population projection revised in 2002. A Statistical Annex supplements with detailed data.