IDEAS home Printed from
   My bibliography  Save this paper

Towards an equitable and sustainable points system



    () (KU Leuven and CORE)

  • DEVOLDER Pierre

    () (Université catholique de Louvain, ISBA, Belgium)


    () (Université catholique de Louvain, CORE, Belgium)


    (Universiteit Amsterdam)


We describe the points system that has been proosed by the Belgian Commission for Pension Reform 2020-2040. Intragenerational equity can be realised in a flexible and transparent way through the allocation of points within a cohort. The intergenerational distribution is determined by fixing the value of a point for the newly retired and a sustainability parameter for the actual retirees. The value of the point links future pensions to the future average living standard of the populuation in employment. This implies that credible promises can be made to the younger contributing generations. To keep the system economically sustainable, we propose an automatic adjustment mechanism, in which a key role is played by the career length. This adjustment mechanism implements the Musgrave rule by stating that the ratio of pensions over labour earnings net of pension contributions should remain constant. This induces a balanced distribution of the burden of demographic and economic shocks oveor the different cohorts and canbe seen as a transparent mechanism of intergenerational risk sharing.

Suggested Citation

  • SCHOKKAERT Erik & DEVOLDER Pierre & HINDRIKS Jean & VANDENBROUCKE Frank, 2017. "Towards an equitable and sustainable points system," CORE Discussion Papers 2017006, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2017006

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Jennifer Hunt, 1999. "Has Work-Sharing Worked in Germany?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 117-148.
    2. Gary S. Becker & Tomas J. Philipson & Rodrigo R. Soares, 2005. "The Quantity and Quality of Life and the Evolution of World Inequality," American Economic Review, American Economic Association, vol. 95(1), pages 277-291, March.
    3. Bruno Crepon & Francis Kramarz, 2002. "Employed 40 Hours or Not Employed 39: Lessons from the 1982 Mandatory Reduction of the Workweek," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1355-1389, December.
    4. Matthieu Chemin & Etienne Wasmer, 2009. "Using Alsace-Moselle Local Laws to Build a Difference-in-Differences Estimation Strategy of the Employment Effects of the 35-Hour Workweek Regulation in France," Journal of Labor Economics, University of Chicago Press, vol. 27(4), pages 487-524, October.
    5. Fleurbaey, Marc & Ponthiere, Gregory, 2013. "Prevention against equality?," Journal of Public Economics, Elsevier, vol. 103(C), pages 68-84.
    6. Bruno Crépon & Marie Leclair & Sébastien Roux, 2004. "RTT, productivité et emploi : nouvelles estimations sur données d'entreprises," Économie et Statistique, Programme National Persée, vol. 376(1), pages 55-89.
    7. Pierre Cahuc & Stéphane Carcillo, 2014. "The Detaxation of Overtime Hours: Lessons from the French Experiment," Journal of Labor Economics, University of Chicago Press, vol. 32(2), pages 361-400.
    8. Pencavel, John & Holmlund, Bertil, 1988. "The Determination of Wages, Employment, and Work Hours in an Economy with Centralised Wage-Setting: Sweden, 1950-83," Economic Journal, Royal Economic Society, vol. 98(393), pages 1105-1126, December.
    9. Fleurbaey, Marc & Leroux, Marie-Louise & Ponthiere, Gregory, 2014. "Compensating the dead," Journal of Mathematical Economics, Elsevier, vol. 51(C), pages 28-41.
    10. Philippe Askenazy, 2013. "Working time regulation in France from 1996 to 2012," Cambridge Journal of Economics, Oxford University Press, vol. 37(2), pages 323-347.
    11. Friesen, Jane, 2001. "Overtime pay regulation and weekly hours of work in Canada," Labour Economics, Elsevier, vol. 8(6), pages 691-720, December.
    Full references (including those not matched with items on IDEAS)

    More about this item


    retirement; pension reform; Musgrave rule; intergenerational risk sharing;

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cor:louvco:2017006. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alain GILLIS). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.