Abstract
The optimal management of pension funds has become increasingly critical. As the population ages, the effective management of pension funds is essential for the social security system. The primary goal of this paper is to develop a deterministic nonlinear multi-objective optimization model to determine the contribution rates in a defined contribution pension system. The computational optimization model was implemented using the LINGO language. In the first part of this study, three main scenarios were analyzed considering different inflation rates, focusing on the objective function that minimizes the salary percentages workers pay when saving for a specified period while aiming to achieve a certain number of coverage years. The first scenario assumes that the worker desires an economic quality equivalent to their working life, showing that contribution rates range from 10% to 30% (with a 3% inflation rate). The second scenario posits that the worker only requires 80% of their equivalent salary during retirement, resulting in contribution rates directly proportional to those in scenario 1 (using the same parameters). The third scenario speculates that inflation may reach 7% per year, causing contribution rates to rise significantly from 40% to 80%. Finally, the Pareto front illustrates the trade-off between the contribution rate and the coverage years based on scenario 1 parameters.
Published Version
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call