Intergenerational risk sharing within funded pension schemes
Cui,J. de Jong,F.C.J.M. Ponds,E.H.M.
Cui,J.
de Jong,F.C.J.M.
Ponds,E.H.M.
Abstract
Is intergenerational risk sharing desirable and feasible in funded pension schemes? Using a multi-period OLG model, we study risk sharing between generations for a variety of realistic collective funded pension schemes, where pension benefits and contributions may depend on the funding ratio and the asset returns. We find that well-structured intergenerational risk sharing via collective schemes can be welfare-enhancing vis-à-vis the optimal individual benchmark. Moreover, from an ex ante perspective the expected welfare gain of the current entry cohort is not at the cost of the older and future cohorts.
Description
Pagination: 29
Date
2011
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Volume Title
Publisher
Research Projects
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Keywords
SDG 1 - No Poverty
Citation
Cui, J, de Jong, F C J M & Ponds, E H M 2011, 'Intergenerational risk sharing within funded pension schemes', Journal of Pension Economics & Finance, vol. 10, no. 1, pp. 1-29.