Adjustment mechanisms and intergenerational actuarial neutrality in pension reforms |
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| Authors: | Robert Meneu Enrique Devesa Mar Devesa Inmaculada Domínguez Borja Encinas |
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| Affiliation: | 1. Department of Mathematics for Economics, University of Valencia, Spain;2. Department of Financial and Actuarial Economics, University of Valencia, Spain;3. Department of Financial Economics and Accounting, University of Extremadura, Cáceres, Spain |
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| Abstract: | In the context of the reform of defined benefit pension systems under population ageing, we focus on the introduction of automatic adjustment mechanisms linked to life expectancy. Our goal is to establish a relationship between changes in the key parameters of the pension system and changes in life expectancy, applying the principle of intergenerational actuarial neutrality. For a defined benefit pension scheme, we first obtain the fundamental adjustment equation and then, for particular cases, we derive different designs of automatic adjustment mechanisms depending on the involved parameter. We include a numerical application only for illustrative purposes. |
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| Keywords: | pension scheme defined benefit plan actuarial life expectancy Europe international ré gime de pension systè me à prestations dé finies actuariel espé rance de vie Europe international ré gimen de pensió n plan de prestació n definida actuarial esperanza de vida Europa internacional Rentensystem Rentensystem mit garantierten Leistungen versicherungsmathematisch Lebenserwartung Europa international |
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