A QUANTITATIVE MODEL FOR A SUSTAINABLE PENSION PLAN IN A DEVELOPING ECONOMY

In this paper, we propose a model for a realistic pension plan for workers in a developing economy. In the process, five investment models are proposed. The models rely on inflation adjusted future values based on average expenditures of non-poor households from the Ghana Living Standard Survey Round 7 (GLSS 7). Unlike other pension plans, the proposed models which are the first of their kind, provide specific amounts to be invested annually to attain sustainable pensions. By implementing the models on hypothetical situations, two models are adjudged the best to be applied to the real-life data from the GLSS 7. It is also evident that models which involve annuity payments with arithmetic or geometric decrements are the best in this matter.