Improving Sweden's Automatic Pension Adjustment Mechanism

The public pension world has seen two innovations in recent years. One is the emergence of notional defined contribution (NDC) plans. The other is the introduction of automatic adjustment mechanisms to help keep pension systems solvent when the economy weakens. This brief looks at the Swedish system to demonstrate how NDCs work and evaluates the work­ings of the automatic adjustment mechanism in the wake of the 2008 financial crisis. Sweden passed reform legislation in 1994 that in­troduced a partially-funded NDC plan.1 The arrange­ment is conceptually similar to a defined contribution plan in that contributions are accumulated in indi­vidual accounts, but different in that the accounts are not fully funded and may be financed entirely on a pay-as-you-go basis. In this setting, the rate of return credited on the account assets is based on a rule rath­er than on actual returns. The Swedish system uses a notional interest rate equal to the rate of growth of average earnings. However, if a calculation suggests a potential deficit, the notional interest rate is auto­matically reduced through a “brake” mechanism. The recent financial crisis has highlighted ways in which the brake mechanism could be improved. This brief proceeds as follows. The first section describes Sweden’s NDC plan. The second describes the Swedish brake mechanism. The third describes two problems with the current adjustment procedure: 1) it creates the likelihood of large shocks for retir­ees; and 2) while disadvantaging retirees, it tends to advantage workers. The fourth section presents pos­sible fixes for the current problems. The final section concludes that the Swedish NDC plan could function more effectively with modest changes to the brake mechanism.

Mechanism of droplet-formation in a supersonic microfluidic spray device

Spray drying is an approach employed in automotive, food, and pharmaceutical industries as a robust and cost efficient liquid atomization technique offering direct control over droplet dimensions. The majority of commercially available spray nozzles are designed for large throughput spray drying applications or uniform surface coating, but microfluidic nebulizers have recently been developed as small scale alternatives. Here, we explore the physical parameters that define the droplet size and formation under supersonic flow conditions commonly found in microfluidic spray drying systems. We examined the spray nozzle operation using high speed imaging and laser scattering measurements, which allowed us to describe the spray regimes and droplet size distributions. It was determined that by using this spray nozzle device, droplets with diameters of 4–8 μm could be generated. Moreover, we show that the supersonic de Laval nozzle model can be used to predict the average droplet size. Our approach can be used as a platform for interfacing fluid microprocessing with gas phase detection and characterization

Mechanism Choice

This chapter reviews the literature on the selection of regulatory policy instruments, from both normative and positive perspectives. It first reviews the mechanism design literature to identify normative objectives in selecting among the menu or toolbox of policy instruments. The chapter then discusses the public choice and positive political theory literatures and the variety of models developed to attempt to predict the actual selection of alternative policy instruments. It begins with simpler early models focusing on interest group politics and proceeds to more complicated models that incorporate both supply and demand for policy, the role of policy entrepreneurs, behavioral and cognitive choice, and public perceptions and mass politics. It compares these theories to empirical experience. The chapter examines literature in law, economics, political science, and related fields, and it draws examples from US, European, and international regulation. It concludes with suggestions for future research. Document is the author\u27s manuscrip