Risk sharing in defined-contribution funded pension systems

Arbeitspapier

This paper explores the introduction of collective risk-sharing elements in defined contri-bution pension contracts. We consider status-contingent, age-contingent and asset contingent risk-sharing arrangements. All arrangements raise aggregate welfare, as measured by equiva- lent variations. While working individuals hardly benefit or may even lose, retirees experience substantial welfare gains. An increase in the tax deductability of pension contributions can be beneficial for working cohorts, but comes at the cost of a reduction in aggregate welfare due to efficiency losses.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 3640

Classification and Topics

• Classification: Wirtschaft ; Social Security and Public Pensions ; Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs ; Optimization Techniques; Programming Models; Dynamic Analysis
• Subject: funded pensions ; risk-sharing ; defined contribution ; inter-generational welfare ; equivalent variation ; stochastic simulations

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Beetsma, Roel ; Alessandro, Bucciol
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/52480
• Last update: 10.03.2025, 11:41 AM CET