Intergenerational Solidarity within a closing Pension Fund
نویسندگان
چکیده
It is well-known that pension fund participants can benefit from intergenerational risksharing, but that different generations have different incentives. This paper models intergenerational solidarity in closing funded pension plans as a bargaining process between generations. We consider generations which each are represented by members of the pension fund’s board. We model pension funds that differ in the degree of risk-sharing, as well as in the extent to which pension rights are guaranteed. The degree of risk-sharing is determined by the number of generations over which risk can be shared. For each type of pension fund, we determine the pension fund policy that follows from a bargaining process between the representatives of the different generations. We then compare the welfare effects of each type of pension fund.
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