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PAYG |
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There is an explicit understanding that financing of the NI programs is strictly PAYG, and that the NIF should be kept in working balance not only by receipts from payroll contributions from employers and employees, but also with general revenue subsidies whenever necessary. Due to aging and the PAYG character of the old age state pension, contribution rates for the old age pensions will almost double in the Netherlands in the; next decades. Traditional credit events, as they apply to the PAYG contract, do not form part of the index contract therefore all settlements will occur through the Floating Payment mechanism covering interest shortfalls, principal shortfalls and writedowns. |
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