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Financial Sustainability of the Algerian Retirement System: A Perspective Analysis of the 50 Coming Years

  • Farid FliciEmail author
  • Frédéric Planchet
Chapter

Abstract

Maintaining retirement systems stability is nowadays a big challenge for all countries. Such sustainability is widely related to a set of time-varying elements that include population structure, longevity, employment, and affiliation to social security. For the case of Algeria, public retirement works according to the pay-as-you-go principle and equilibrium is maintained by public subsidy. But, population is now aging, and longevity is improving. The retired population is supposed to grow faster than the population at working age. Consequently, it will be harder to keep equality between retirement incomes and outcomes especially if we consider the weakness of the demand for social security among workers. The latter remains widely dependent on public employment; the employees of the private sector are less covered. In the present paper, we aim to simulate the future evolution of the demographic and economic factors affecting the stability of the Algerian retirement system in order to show their long-run effect. As a result, we found that it will be impossible to keep the retirement sustainability within its current design. The accelerating aging process imposes to undertake heavy reforms in the near future.

Keywords

Retirement Pay-as-you-go Experience mortality Contribution rates Aging Longevity 

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Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  1. 1.Centre for Research in Applied Economics for Development (CREAD)AlgiersAlgeria
  2. 2.Institut de Science Financiére et d’Assurances (ISFA)LyonFrance

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