Optimal Actuarial Fairness in Pension Systems – a Note

  title={Optimal Actuarial Fairness in Pension Systems – a Note},
  author={John Hassler and Assar Lindbeck},
A rationale for a compulsory pension system is that the government wants to correct supposedly myopic behavior by the individuals. Given the existence of such a system, we calculate the optimal relation between marginal contributions and benefits, i.e., the optimal degree of marginal actuarial fairness, as seen from the point of view of the individuals or of the government. The following is shown to hold under general assumptions of individual utility: The optimal degree of marginal actuarial… CONTINUE READING