We find that segments of society who have shorter life expectancy can expect a lower retirement income and lifetime utility due to the longevity of other groups participating in the same pension scheme. Linking retirement age to average life expectancy magnifies the negative effect on the...

Demographic developments are unfavourable for the financing of pension schemes in most OECD countries, implying continued growth in pension expenditure in virtually all OECD countries. This chapter examines the vulnerability of pension systems, with an emphasis on financial sustainability and...