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Life-Expectancy Risk and Pensions: Who Bears the Burden?

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  • Edward R. Whitehouse

    (OECD)

Abstract

Two-thirds of pension reforms in OECD countries in the last 15 years contain measures that will automatically link future pensions to changes in life expectancy. This quiet revolution in pension policy means that the financial costs of longer lives will be shared between generations subject to a rule, rather than spreading the burden through potentially divisive political battles as happened in the past. As a result, nearly half of OECD countries - 13 out of 30 - now have an automatic link between pensions and life expectancy in their retirement-income systems, compared with only one country (Denmark) a decade ago. Indeed, the spread of this policy has a strong claim as the major innovation in pension policy in recent years. The link to life expectancy has been achieved in four different ways... Les deux tiers des réformes des systèmes de retraite dans les pays de l'OCDE ces 15 dernières années comportent des mesures prises pour indexer de manière automatique les futures retraites sur l'évolution de l?espérance de vie. Cette révolution qui s?opère tranquillement dans les politiques de pensions signifie que les coûts financiers engendrés par des vies plus longues seront partagés entre les générations en appliquant une règle plutôt que de répartir cette charge sous l'action de conflits politiques, tel que dans le passé. Par conséquent, près de la moitié des pays de l'OCDE - 13 sur 30 - ont maintenant des liens automatiques entre les pensions et l'espérance de vie dans leurs régimes de retraite, comparé à seulement un pays (Danemark) il y a dix ans. En effet, cette politique apparaît comme étant une des innovations plus importantes en matière de politiques de pensions ces dernières années. Le lien fait à l'espérance de vie a été réalisé de quatre manières différentes...

Suggested Citation

  • Edward R. Whitehouse, 2007. "Life-Expectancy Risk and Pensions: Who Bears the Burden?," OECD Social, Employment and Migration Working Papers 60, OECD Publishing.
  • Handle: RePEc:oec:elsaab:60-en
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    File URL: http://dx.doi.org/10.1787/060025254440
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    Citations

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    Cited by:

    1. Anne LAVIGNE & Christophe DANIEL & Jesus Herell NZE-OBAME & Christian Rodrigue TAGNE & Bruno SEJOURNE & Stéphane MOTTET, 2016. "La réforme des retraites de 1993 en France : quel impact sur l’équivalent patrimonial des droits à la retraite ?," LEO Working Papers / DR LEO 2337, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    2. Queisser, Monika & Whitehouse, Edward, 2005. "Pensions at a glance: public policies across OECD countries," MPRA Paper 10907, University Library of Munich, Germany.
    3. Gurvich, Ye., 2011. "Long-Term Demographic Challenges and Pension Policy," Journal of the New Economic Association, New Economic Association, issue 9, pages 193-196.
    4. José Enrique Devesa Carpio & Mar Devesa Carpio & Robert Meney Gaya & Amparo Nagore García & Inmaculada Domínguez Fabián & Borja Encinas Goenechea, 2012. "Equidad y sostenibilidad como objetivos ante la reforma del sistema contributivo de pensiones de jubilación," Hacienda Pública Española, IEF, vol. 201(2), pages 9-38, June.
    5. Callan, Tim & Keane, Claire & Walsh, John R., 2009. "Pension Policy: New Evidence on Key Issues," Research Series, Economic and Social Research Institute (ESRI), number RS14.
    6. Ferro, Gustavo, 2008. "Un impulso al mercado de rentas vitalicias en España
      [Promoting the annuities market in Spain]
      ," MPRA Paper 20211, University Library of Munich, Germany, revised Jul 2008.
    7. Ferro, Gustavo, 2008. "On annuities: an overview of the issues," MPRA Paper 20209, University Library of Munich, Germany, revised Oct 2009.
    8. Martin, John P. & Whitehouse, Edward, 2008. "Reforming Retirement-Income Systems: Lessons from the Recent Experiences of OECD Countries," IZA Discussion Papers 3521, Institute for the Study of Labor (IZA).
    9. Dennis Fredriksen & Nils Martin Stølen, 2011. "Norwegian pension reform Defined benefit versus defined contribution," Discussion Papers 669, Statistics Norway, Research Department.

    More about this item

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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