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Thanks are due to Richard Hemming, Zubair Iqbal, George Kopits, and Steven Symansky for their helpful comments on this paper.
Gelb  provides some insight into what are the factors driving these decisions in several countries.
The model could be modified to allow for transfers to accrue to the old also but this would complicate the analysis and does not materially affect the results.
One could also imagine a stronger requirement related to the size of the deficit that is consistent with a stock of financial assets that is increasing over time at a particular rate (which might be an important consideration for an economy facing a finite stock of resource and which is trying to accumulate assets for future generations).
In the case of the country being a net debtor (i.e., at< 0) however, a lower rate of return implies a lower interest burden on the economy and thus represents less of a constraint on policy.
In the case of a country being a net debtor, the effects are reversed with higher population growth-reducing the per capita level of indebtedness and lower returns reducing government interest expenditure and helping the budgetary position.