Source: http://www.imf.org.
This paper argues that there are significant risks, limitations, and complications associated with reliance upon mandatory DC, fully funded scheme as the dominant public pension pillar. Policies to limit risks may result in the government being reinjected into playing an important financial role in provision of social insurance. For many countries, the principal source of old age support should thus derive from well-formulated, public DB pillar, with significant amount of prefunding. A DC/DB pillar can play a useful supplemental role in a multi-pillar system for accumulation of pension savings.