This paper explores the effect of letting individuals choose their retirement age in a world of uncertainty where there exist both defined benefit (DB) and defined contribution (DC) pension plans. The paper shows that giving individuals the flexibility to determine when to retire is an important...

We develop a model where individuals differ in productivity and in longevity. Benefits from the public pay-as-you-go pension system take the form of a collective annuity, with both a contributive (Bismarckian) component (based on the worker's past earnings) and a flat (Beveridgean) part. Voters...

Pension benefit rules depend on individual history far more than taxes do, and age plays a much larger role in pension determination than in tax determination. Apart from some simulation studies, theoretical studies of optimal tax design typically contain neither a mandatory pension system nor...