ABSTRACT
Public pension plans are probably the largest financial transaction systems. For many governments, pension payments are the single largest expenditure. National pension plans also represent one of the most long-term commitments of governments. The US Social Security Administration reports annually on the financial status of the Social Security system (SSA). Briefly, the actuarial balance – deficit or surplus – reflects how much the contribution rate must be increased to ensure that the Social Security buffer fund, the trust fund, never drops below a stipulated level in the standard 75-year projection of the SSA. In several respects the financial analysis of the US Social Security system has been more advanced and systematic than was the case in Sweden. The idea that the financial position of a pay-as-you-go pension plan can be presented in the terms of assets and liabilities does not come naturally, and indeed it may need some getting used to.
