EAA-webinar - Measuring Intergenerational Fairness and Pensions

At the same time, new cohorts continuously enter the workforce during an individual’s career, meaning that active workers and retirees always coexist. At any given moment, one group is contributing to the fund and building up pension rights, while another is receiving benefit payments. Over time, these successive periods shape the cash-flow model of pension systems.

Although this description may seem straightforward, the relationship between generations is far more complex. Modelling consists of all the future states of the future development of interrelated economic, demographic, and legal factors, all of which are highly likely to change over such a long-time horizon. These factors eventually change the financial sustainability or benefit adequacy of the pension fund and so favour certain groups of members over others.