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2018, vol. 56, iss. 7-9, pp. 402-414
Demography and pensions
Ustavni sud Republike Srbije, Beograd
Abstract
In this article the author talks about Bismarck model of financing pensions. In that model those who are currently employed pay contributions to finance current pensioners. That is a system of inter-generation solidarity. There is also a system that was introduced by British Lord Beveridge in 1942. That system is a classical insurance company. A person who pays contributions in that system, saves a money for his future, for his future pension. Bismarck model guarantees the continuity, but there are some problems with the demography. Bismarck's system can be efficient if 4 of employees finance one pensioner. So, if the number of young people goes down and the number of old people goes up, there could be some problems and the system could be collapsed. So, the most significant problem in the Bismarck's system, like the Serbian system is, is the relation between young and old generations. In Serbian society nowadays there is a big problem because there are not sufficient number of young people who pay contributions for pensioners. There are three possibilities that could resolve that general problem of demography and pensions. One possibility is to reduce pensions and the second is to raise contributions for pensions. The third solution is to introduce private funds for pension's. On the other side, Beveridge private funds could face with market challenges. The special problem in that sense is that in Serbia people do not know very much how those funds are functioning. The author of this article speaks about all of those social, legal, economic and demographic problems in this text.

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article language: Serbian
document type: unclassified
published in SCIndeks: 02/08/2018

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