Helping Long Term Care Coverage via Differential on Mortality?

This paper seeks to help draw up a flexible design for pensions for dependents that can help reduce the costs of their situation while precisely increasing the amounts that they receive. The way is a system for the automatic adjustment of pension benefits taking into account the dependency level of the beneficiary. Thus, pension benefits increase in the new state as the cost of care increases. To that end we propose a model with a benefit correction factor that includes a specific mortality rate for dependents, thus enabling us to adapt benefits to the profile of each beneficiary. Special attention is paid to mortality rates among dependents as the determinant for the correction factor. This new model has many practical implications, as it can be implemented without much difficulty and indeed at no additional cost. This enables coverage to be universal in private capitalization-type pension plans. However, it does increase the cost of social security systems funded on a pay-as-you-go basis.