African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4194

Full Length Research Paper

System dynamics approach in analyzing impact of demographic and salary risks on pension expenditure

Hasimah Sapiri1, Anton Abdulbasah Kamil2*, Razman Mat Tahar3 and Hanafi Tumin4
  1College of Arts and Sciences, Universiti Utara Malaysia, Sintok, Kedah, Malaysia. 2Department of Mathematics, School of Distance Education, Universiti Sains Malaysia, Pulau Pinang, Malaysia. 3Department of Technology Management, Faculty of Manufacturing Engineering and Technology Department, Universiti Malaysia Pahang, Kuantan, Pahang, Malaysia. 4Department of Actuarial Science, Faculty of Computer and Mathematical Sciences, Universiti Teknologi Mara, Shah Alam, Selangor, Malaysia.
Email: [email protected]

  •  Accepted: 16 August 2010
  •  Published: 04 February 2011

Abstract

 

Public pension plan in Malaysia is studied to analyze pension expenditure due to salary and demographic risks. Through the literature review and interview session with several officers in public sector, factors affecting pension expenditure are determined. The System Dynamic model is later developed using iThink software to show how demographic and salary changes affect the pension expenditure. Then, by using actual data, the impact of demographic and salary risks on pension expenditure is analyzed. The dynamics simulation model developed in this paper offers a useful tool for analyzing pension expenditure as a result of demographic and salary risks.

 

Key words: Demographics and salary risk, pension expenditure, system dynamics, public policy.

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This article is published under the terms of the Creative Commons Attribution License 4.0

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