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Towards an equitable and sustainable points system. A proposal for pension reform in Belgium

  • ERIK SCHOKKAERT (a1), PIERRE DEVOLDER (a2), JEAN HINDRIKS (a3) and FRANK VANDENBROUCKE (a4)
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.

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The ideas in this paper are the reflection of many stimulating discussions within the Commission Pension Reform 2020–2040. The authors thank the other members of the commission (Jos Berghman (+), Jacques Boulet, Bea Cantillon, Etienne de Callatay, Philippe De Mol, Ria Janvier, Alain Jousten, Françoise Masai, Hans Peeters, Gabriel Perl, Yves Stevens, Guy Van Camp, Elly Vandevelde and Koen Vleminckx) for their valuable input. The authors also thank Pierre Pestieau and an anonymous referee for their useful comments.

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Journal of Pension Economics & Finance
  • ISSN: 1474-7472
  • EISSN: 1475-3022
  • URL: /core/journals/journal-of-pension-economics-and-finance
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