Adjustment mechanisms and intergenerational actuarial neutrality in pension reforms. (27th May 2016)

• Record Type: Journal Article
• Authors: Meneu, Robert; Devesa, Enrique; Devesa, Mar; Domínguez, Inmaculada; Encinas, Borja
• Is Part Of: International social security review. Volume 69:Number 1(2016:Jan./Mar.)
• Page Start: 87
• Page End: 107
• Publication Date: 2016-05-27
• Subjects: pension scheme -- defined benefit plan -- actuarial -- life expectancy -- Europe -- international; régime de pension -- système à prestations définies -- actuariel -- espérance de vie -- Europe -- international; régimen de pensión -- plan de prestación definida -- actuarial -- esperanza de vida -- Europa -- internacional; Rentensystem -- Rentensystem mit garantierten Leistungen -- versicherungsmathematisch -- Lebenserwartung -- Europa -- international; Social security -- Periodicals; Public welfare -- Periodicals; 368.4
• DOI: 10.1111/issr.12096
• Languages: English
• ISSNs: 0020-871X

Abstract

Abstract: In the context of the reform of defined benefit pension systems under population ageing, we focus on the introduction of automatic adjustment mechanisms linked to life expectancy. Our goal is to establish a relationship between changes in the key parameters of the pension system and changes in life expectancy, applying the principle of intergenerational actuarial neutrality. For a defined benefit pension scheme, we first obtain the fundamental adjustment equation and then, for particular cases, we derive different designs of automatic adjustment mechanisms depending on the involved parameter. We include a numerical application only for illustrative purposes.