Flexible pension take-up in social security

Yvonne Adema, Jan Bonenkamp () and Lex Meijdam

International Tax and Public Finance, 2016, vol. 23, issue 2, 316-342

Abstract: This paper studies the redistribution and welfare effects of increasing the flexibility of individual pension take-up. We use an overlapping-generations model with Beveridgean pay-as-you-go pensions and heterogeneous individuals who differ in ability and lifespan. We find that introducing flexible pension take-up can induce a Pareto improvement when the initial pension scheme contains within-cohort redistribution and induces early retirement. Such a Pareto improving reform entails the application of uniform actuarial adjustment of pension entitlements based on average lifespan. Introducing actuarial non-neutrality that stimulates later retirement further improves such a flexibility reform. Copyright The Author(s) 2016

Keywords: Redistribution; Welfare; Retirement; Flexible pensions; Actuarial adjustment; D61; H23; H55; J26 (search for similar items in EconPapers)
Date: 2016
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Working Paper: Flexible pension take-up in social security (2013)
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DOI: 10.1007/s10797-015-9354-3

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