The Dynamic Microsimulation Model of the Czech Republic is a dynamic microsimulation pension model (a type of a pension model) for simulation of the pension system of the Czech republic, owned by the Ministry of Labour and Social Affairs of the Czech Republic (see their announcement ).
The model was developed in 2011 by Deloitte. This project has been funded with support from the European Commission, see Progress programme – actions related to the development of administrative datasets and models for labour market and pension analysis (Ref. No. VP/2009/006) .
Details
The model has been implemented by Deloitte (Actuarial & Insurance Solutions, Central Europe) in a software system called Prophet developed by SunGard. A special library which contains the entire code has been prepared by Deloitte specifically for this purpose, see the summary report. Deloitte built upon its experience with developing and implementing pension models in a few other countries, e.g. Hungary, see (Gál, Horváth, Orbán, & Dekkers, 2009, page 47) .
The Dynamic Microsimulation Model completed the analytical toolkit of the Ministry of Labour and Social Affairs of the Czech Republic and added a tool which uses individual data and which – in addition to aggregate results – makes it possible to explore the impact on distribution of pensions, poverty of pensioners, impact of the changes of the pension formula on distributional properties of the pension system etc.
The model is parametrised to the existing pension system. However, all the major parameters of the current system are stored in the system of tables and can be changed in order to investigate the impact of the parameter change on the pension system. The model also includes the functionality of a funded pillar and enables simulation of the impact of introduction of the funded pillar.