Longevity Heterogeneity and Pension Schemes

Announcements from the European Actuarial Academy organiser: Many demographic studies have shown an important positive relationship between life expectancy and socio economic conditions. Shortly summarized, we could say that rich people live longer than poor people. The correlation can be observed, based on different indicators such as education level, wealth or level of income. The gap in terms of life expectancy is even widening and can go nowadays beyond 10 years. This reality has strange effects, especially on public pension schemes, paying lifetime annuities from retirement age. Indeed, social security systems are normally based on redistribution and solidarity principles. However, inequalities in terms of life expectancy generate regressive effects and induce indirect transfers from the poorest to the wealthiest affiliates. We could then apply different kinds of actuarial corrections on the pension design in order to compensate partially or totally this effect and restore some form of redistribution, as well in DB (Defined Benefit) as in DC (Defined Contribution) pension schemes.

The web session is open to all interested persons, especially for pension actuaries and everybody motivated by the future of pension systems.

Technical Requirements: Please check with your IT department if your firewall and computer settings support web session participation (the programme Zoom is used for this online training). 

The objective of this web session is to address the effect of longevity heterogeneity on the design of pension schemes, especially for social security mechanisms. We first present different figures showing the socio economic gap in terms of life expectancy. Then we evaluate the effect of such inequalities on traditional pension plans and illustrate some regressive aspects. Finally, we present different possible mechanisms in order to compensate partially or totally these effects (individualized retirement age, individualized annuity rates, progressive formula, two tier approaches…). 

CLICK HERE TO MAKE A RESERVATION. Your early-bird registration fee is € 100.00 plus 19% VAT for bookings by 29 September 2021. After this date, the fee will be € 140.00 plus 19% VAT.