Publication: Notional Accounts : Notional Defined Contribution Plans as a Pension Reform Strategy
Notional accounts are designed to mimic a defined contribution plan, where the pension depends on contributions and investment returns. (For this reason, they are sometimes called notional, defined-contribution schemes). Pension contributions are tracked in accounts which earn a rate of return. However, in notional accounts, the return that contributions earn is a notional one, set by the government, not the product of investment returns in the markets.
“World Bank. 2005. Notional Accounts : Notional Defined Contribution Plans as a Pension Reform Strategy. World Bank Pension Reform Primer Series. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/546aaa2d-7461-5bd3-82b4-548cbabf5199 License: CC BY 3.0 IGO.”