Pension Reform Illustration and Simulation Model

Following the World Bank's PROST model, PRISM is a technically rigorous actuarial model that has the support of the World Bank, the Asian Development Bank, USAID, and the European Union. PRISM has the flexibility to simulate the features of most Pension and Disability systems. It currently is the model of choice by many governments throughout the world. This user-friendly toolkit for forecasting the impact of economic, demographics, and policy changes upon the operation of payroll financed pension and disability systems:

• Calculates actuarially fair retirement penalties,
• Calculates single and joint-life annuities financed by accumulations in defined contribution schemes,
• Simulates a stylized pension system (a good teaching tool), and
• Estimates the impact of mortality and interest rate risks upon annuity providers.

PRISM has advanced features that can be used to examine the impact of the pension system upon inter-generational and intra-generational redistribution. For example, PRISM outputs generational accounts, an accounting system which provides clear information to policy-makers regarding the impact of the pension system upon different generations.