Pension Funds and Risk-sharing in the Finnish Earnings-related Pension System
Jukka Lassila and
Tarmo Valkonen ()
No 90, ETLA Reports from The Research Institute of the Finnish Economy
Abstract We study the use of pension funds in the Finnish earnings-related pension system with the aim of smoothing contributions over time under demographic and economic risks. Smoothing is affected by the revisions in long-term forecasts and is thus imperfect. As a partially funded defined-benefit system, demographic risks and asset yield risks directly affect the contributions. In a general equilibrium setup, these risks also affect wages and thus pension benefits and replacement rates. We also consider alternative benefit rules where risks are transferred more to the pensioners.
Keywords: Pensions; Funding; Contribution smoothing; Risks; Generational fairness (search for similar items in EconPapers)
JEL-codes: E17 H55 (search for similar items in EconPapers)
Pages: 37 pages
New Economics Papers: this item is included in nep-age, nep-bec, nep-eur, nep-mac and nep-ore
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Persistent link: https://EconPapers.repec.org/RePEc:rif:report:90
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