Chile approved in early 2008 the replacement of her two current non-contributory subsidies for the old poor for a unified program with a pioneering design, with phase-in ending in 2012. This paper describes the political economy of this reform and evaluates it with regards to efficiency and...

This paper explores the introduction of collective risk-sharing elements in defined contribution pension contracts. We consider status-contingent, age-contingent and asset contingent risk-sharing arrangements. All arrangements raise aggregate welfare, as measured by equivalent variations. While...

We explore the benefits of intergenerational risk-sharing through both private funded pensions and via the public debt. We use a multi-period overlapping generations model with a PAYG pension pillar, a funded pension pillar and a government. Shocks are smoothed via the public debt and variations...

This paper discusses mandatory participation in Dutch occupational pension schemes. While mandatory participation is a historical feature of most second-pillar pension arrangements, some recent developments may affect the case for mandatory participation. The main ones are the revision of the...

There exists a wide variety of tax treatments of pensions across the world. And the reasons for such a range of regimes are not clear. This note reviews the general principles of pension taxes and analyses the theoretical foundations of why pension incomes ought to be taxed specifically. To do...

We investigate numerically how indexation of funded pensions for inflation can be differentiated across the various groups of fund participants. The pension arrangement is modelled after the Dutch situation. While the aggregate welfare consequences are small, group-specific consequences are more...

This paper provides a quantitative analysis of hypothetical replacements of existing tax arrangements applied to superannuation (Australia's term for private pensions) with traditional EET and TEE regimes. These taxation regimes exempt pension fund earnings from any taxation and tax either...

We study numerically the inter- and intra-generational welfare consequences of alternative pension fund policies in response to unexpected demographic, financial and macro-economic shocks. Our analysis is based on an applied many-generation OLG model describing a small-open economy with...

We extend “economic equivalence” results, like the Ricardian equivalence proposition, to the political sphere where policy is chosen sequentially. We derive conditions under which a policy regime (summarizing admissible policy choices in every period) and a state are “politico-economically...

We investigate the responsiveness of individual retirement decisions to changes in financial incentives. A reform increased women's normal retirement age (NRA) in two steps from age 62 to age 63 first and then to age 64. At the same time retirement at the previous NRA became possible at a...