Intergenerational actuarial fairness when longevity increases

Detalhes bibliográficos
Autor(a) principal: Bravo, Jorge M.
Data de Publicação: 2023
Outros Autores: Ayuso, Mercedes, Holzmann, Robert, Palmer, Edward
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10362/157641
Resumo: Bravo, J. M., Ayuso, M., Holzmann, R., & Palmer, E. (2023). Intergenerational actuarial fairness when longevity increases: Amending the retirement age. Insurance: Mathematics and Economics, 113(November), 161-184. https://doi.org/10.1016/j.insmatheco.2023.08.007 ---Funding: Jorge M. Bravo was supported by Portuguese National Science Funds through Fundação para a Ciência e a Tecnologia, grant UIDB/04152/2020 – Centro de Investigação em Gestão de Informação (MagIC) and grant UIDB/00315/2020 – Instituto Universitário de Lisboa (ISCTE-IUL), Business Research Unit (BRU-IUL). Mercedes Ayuso is grateful to the Spanish Ministry of Science and Innovation for funding received under grant PID2019-105986GB-C21.
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spelling Intergenerational actuarial fairness when longevity increasesAmending the retirement ageRetirement ageActuarial fairnessIntergenerational neutralityPensionsBayesian Model EnsemblePopulation ageingStatistics and ProbabilityEconomics and EconometricsStatistics, Probability and UncertaintySDG 3 - Good Health and Well-beingBravo, J. M., Ayuso, M., Holzmann, R., & Palmer, E. (2023). Intergenerational actuarial fairness when longevity increases: Amending the retirement age. Insurance: Mathematics and Economics, 113(November), 161-184. https://doi.org/10.1016/j.insmatheco.2023.08.007 ---Funding: Jorge M. Bravo was supported by Portuguese National Science Funds through Fundação para a Ciência e a Tecnologia, grant UIDB/04152/2020 – Centro de Investigação em Gestão de Informação (MagIC) and grant UIDB/00315/2020 – Instituto Universitário de Lisboa (ISCTE-IUL), Business Research Unit (BRU-IUL). Mercedes Ayuso is grateful to the Spanish Ministry of Science and Innovation for funding received under grant PID2019-105986GB-C21.Continuous longevity improvements and population ageing have led countries to modify national public pension schemes by increasing standard and early retirement ages in a discretionary, scheduled, or automatic way, and making it harder for people to retire prematurely. To this end, countries have adopted alternative retirement age strategies, but our analyses show that the measures taken are often poorly designed and consequently misaligned with the pension scheme's ultimate goals. This paper discusses how to implement automatic indexation of the retirement age to life expectancy developments while respecting the principles of intergenerational actuarial fairness and neutrality among generations of the respective policy scheme design. With stable demographic conditions, we show in policy designs in which extended working lives translate into additional pension entitlements, the pension age must be automatically updated to keep the period in retirement constant. Alternatively, policy designs that pursue a fixed replacement rate are consistent with retirement age policies targeting a constant balance between active years in the workforce and years in retirement. Under conditions of population ageing, the statutory pension age will have to increase at a faster rate to meet the intergenerational equity criteria. The empirical strategy employed a Bayesian Model Ensemble approach to stochastic mortality modelling to address model risk and generate forecasts of intergenerationally and actuarially fair pension ages for 23 countries from 2000 to 2050. The findings show that the pension age increases needed to accommodate the effect of longevity developments on pay-as-you-go equilibrium and to reinstate equity between generations are sizeable and well beyond those employed and/or legislated in most countries. A new wave of pension reforms may be at the doorsteps.Information Management Research Center (MagIC) - NOVA Information Management SchoolNOVA Information Management School (NOVA IMS)RUNBravo, Jorge M.Ayuso, MercedesHolzmann, RobertPalmer, Edward2023-09-11T22:14:54Z2023-11-012023-11-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/article24application/pdfhttp://hdl.handle.net/10362/157641eng0167-6687PURE: 70649564https://doi.org/10.1016/j.insmatheco.2023.08.007info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2024-03-11T05:39:55Zoai:run.unl.pt:10362/157641Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-20T03:56:47.998762Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv Intergenerational actuarial fairness when longevity increases
Amending the retirement age
title Intergenerational actuarial fairness when longevity increases
spellingShingle Intergenerational actuarial fairness when longevity increases
Bravo, Jorge M.
Retirement age
Actuarial fairness
Intergenerational neutrality
Pensions
Bayesian Model Ensemble
Population ageing
Statistics and Probability
Economics and Econometrics
Statistics, Probability and Uncertainty
SDG 3 - Good Health and Well-being
title_short Intergenerational actuarial fairness when longevity increases
title_full Intergenerational actuarial fairness when longevity increases
title_fullStr Intergenerational actuarial fairness when longevity increases
title_full_unstemmed Intergenerational actuarial fairness when longevity increases
title_sort Intergenerational actuarial fairness when longevity increases
author Bravo, Jorge M.
author_facet Bravo, Jorge M.
Ayuso, Mercedes
Holzmann, Robert
Palmer, Edward
author_role author
author2 Ayuso, Mercedes
Holzmann, Robert
Palmer, Edward
author2_role author
author
author
dc.contributor.none.fl_str_mv Information Management Research Center (MagIC) - NOVA Information Management School
NOVA Information Management School (NOVA IMS)
RUN
dc.contributor.author.fl_str_mv Bravo, Jorge M.
Ayuso, Mercedes
Holzmann, Robert
Palmer, Edward
dc.subject.por.fl_str_mv Retirement age
Actuarial fairness
Intergenerational neutrality
Pensions
Bayesian Model Ensemble
Population ageing
Statistics and Probability
Economics and Econometrics
Statistics, Probability and Uncertainty
SDG 3 - Good Health and Well-being
topic Retirement age
Actuarial fairness
Intergenerational neutrality
Pensions
Bayesian Model Ensemble
Population ageing
Statistics and Probability
Economics and Econometrics
Statistics, Probability and Uncertainty
SDG 3 - Good Health and Well-being
description Bravo, J. M., Ayuso, M., Holzmann, R., & Palmer, E. (2023). Intergenerational actuarial fairness when longevity increases: Amending the retirement age. Insurance: Mathematics and Economics, 113(November), 161-184. https://doi.org/10.1016/j.insmatheco.2023.08.007 ---Funding: Jorge M. Bravo was supported by Portuguese National Science Funds through Fundação para a Ciência e a Tecnologia, grant UIDB/04152/2020 – Centro de Investigação em Gestão de Informação (MagIC) and grant UIDB/00315/2020 – Instituto Universitário de Lisboa (ISCTE-IUL), Business Research Unit (BRU-IUL). Mercedes Ayuso is grateful to the Spanish Ministry of Science and Innovation for funding received under grant PID2019-105986GB-C21.
publishDate 2023
dc.date.none.fl_str_mv 2023-09-11T22:14:54Z
2023-11-01
2023-11-01T00:00:00Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10362/157641
url http://hdl.handle.net/10362/157641
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv 0167-6687
PURE: 70649564
https://doi.org/10.1016/j.insmatheco.2023.08.007
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
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application/pdf
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instacron:RCAAP
instname_str Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron_str RCAAP
institution RCAAP
reponame_str Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
collection Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
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