Towards an Equitable and Sustainable Points System. A Proposal for Pension Reform in Belgium

Journal of Pension Economics and Finance, doi/10.1017/S1474747218000112

Posted: 30 May 2018

See all articles by Erik Schokkaert

Erik Schokkaert

Catholic University of Leuven (KUL)

Pierre Devolder

Catholic University of Louvain

Jean Hindriks

University of London - School of Economics and Finance

Frank Vandenbroucke

University of Amsterdam

Multiple version iconThere are 3 versions of this paper

Date Written: April 27, 2018

Abstract

We describe the points system as proposed by the Belgian Commission for Pension Reform 2020–2040. Intragenerational equity can be realised through the allocation of points within a cohort. The intergenerational distribution is determined by fixing the value of a point for the newly retired and a sustainability parameter for the actual retirees. The value of the point links pensions to the average living standard of the employed population. We propose an automatic adjustment mechanism, in which a key role is played by the career length. This mechanism induces a balanced distribution of the burden of demographic and economic shocks over the different cohorts.

Keywords: Pension reform, points system, automatic adjustment, Musgrave rule

JEL Classification: D63, H55, J26

Suggested Citation

Schokkaert, Erik and Devolder, Pierre and Hindriks, Jean and Vandenbroucke, Frank, Towards an Equitable and Sustainable Points System. A Proposal for Pension Reform in Belgium (April 27, 2018). Journal of Pension Economics and Finance, doi/10.1017/S1474747218000112 . Available at SSRN: https://ssrn.com/abstract=3171477

Erik Schokkaert (Contact Author)

Catholic University of Leuven (KUL) ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

Pierre Devolder

Catholic University of Louvain ( email )

Place Montesquieu, 3
B-1348 Louvain-la-Neuve, 1348
Belgium

Jean Hindriks

University of London - School of Economics and Finance ( email )

Mile End Road
London, E1 4NS
United Kingdom
+44 20 7882 7807 (Phone)
+44 20 8983 3580 (Fax)

HOME PAGE: http://www.dc.eclipse.co.uk/hindriks.html

Frank Vandenbroucke

University of Amsterdam ( email )

Spui 21
Amsterdam, 1012 WX
Netherlands
+31 (0)20 525 6037 (Phone)

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