The use of a gender-neutral annuity divisor introduces an intra-generational redistribution from short-lived towards long-lived individuals; this entails a transfer of wealth from males to females and from low socioeconomic groups to high socioeconomic groups. With some subpopulations consisting of females from low socioeconomic groups (or males from high groups), the net effect of the redistribution is unclear. The study aims to quantify the lifetime income redistribution of a generic NDC system using two types of divisor – the demographic and the economic – to compute the amount of an initial pension. With this in mind, the redistribution (actuarial fairness) among subpopulations is assessed through the ratio between the present value of expected pensions received and contributions paid. We find that all subgroups of women and men with high educational attainment benefit from the use of the unisex demographic divisor. This paper also shows that the value of the economic divisor depends markedly on population composition. When mortality differentials by gender and level of education are considered, economic divisors are mostly driven by the longevity effect corresponding to gender.

Existing pay-as-you-go (PAYG) schemes based on notional accounts (NAs) have chosen the defined-contribution (DC) setting that forces the rate of interest credited to all individual accounts to change over time to ensure solvency. On the other hand, volatility of the rate of interest is the source of non-negligible disparities of individual internal rates of return (IRRs) both within and across generations. It is argued that these disparities represent a threat to the political appeal of PAYG DC systems, in particular in the present situation characterized by low growth rates of the contribution base. The paper uses a four-overlapping-generations model to prove that the DC setting is not a necessary ingredient of NAs and that their political appeal could be enhanced by extending their use to non-DC pension systems. In fact, redistributions can be avoided by crediting all individual accounts with a constant rate of interest while ensuring financial solvency by fine-tuning of the contribution rate to make the system's revenues grow at the same (constant) rate credited to all accounts. The proof requires constancy of the employment growth rate but not of average earnings. Changes in the employment growth rate produce small oscillations around perfect balance between contribution revenue and pension expenditure manageable with a small buffer fund.

Unemployment periods and other career breaks have long-term scarring effects on future labour market possibilities, permanently affecting workers' retirement income and standard of living as pensioners. Previous literature has focused on the impact of job loss on working careers with little attention to its impact on pension wealth, particularly the extent to which longevity heterogeneity amplifies unemployment scars. This paper investigates the effect of single and multiple unemployment spells on the lifetime pension entitlements of earnings-related contributory pension schemes, considering the timing and duration of breaks, alternative lifecycle labour earnings profiles, scarring and restoration effects on labour market re-entry, the existence of pension credits and pension accruals for periods spent outside the labour market, longevity heterogeneity, and the accumulation and decumulation redistributive features of the pension scheme. Pension entitlements are estimated using a backward-looking simulation approach based on the actual Portuguese public pension system rules and stylized labour market profiles identified in the SHARE Job Episodes Panel data using a sequence analysis. Longevity heterogeneity is modelled using a stochastic mortality model with a frailty model. Our results show that the timing and duration of unemployment periods is critical, that scarring effects amplify pension wealth losses, that minimum pension provisions, pension credits and pension scheme redistributive features can partially mitigate the impact of unemployment periods on future entitlements, and that the presence of positive correlation between lifetime income and longevity career breaks can amplify the asymmetry in the distribution of pension entitlements across income groups.

Based on nationally representative data (N = 8,901), this study investigates the extent to which expectations for intra-family transfers and government assistance in old age impact the probability of saving for retirement among working-age individuals in Thailand. Results show that expectations for financial non-self-reliance and expectations that family support would constitute the most important source of old-age financial security reduce the probability that working-age individuals would save for retirement. Expectations for government support have no impact on average. Given that filial piety is weakening in Thailand, this study suggests that the government encourage pre-retirement savings more strongly.

This study provides empirical evidence on the mechanisms through which financial literacy may be associated with saving for retirement, in the three phases of the decision-making process – information perception, information search and evaluation, and decision-making and implementation. The results indicate that financial literacy has significantly positive effects on one's awareness of post-retirement financial needs, comparing alternatives when purchasing financial products, displaying fewer present-time bias, and planning for and setting aside funds for retirement. Financial literacy not only directly contributes to planning for the future, but also indirectly via a reduction in behavioral biases.

In collective pension arrangements without a sponsor guarantee, assets and liabilities are commingled, and members' benefits are adjusted to reflect emerging plan experience. Stakeholders pay attention to the fairness of the intergenerational transactions arising from the inclusion of certain design elements; however, implicit intergenerational transactions exist even in pure collective defined contribution (CDC) arrangements without any such explicit stabilization mechanisms. In this study, we find that the implicit risk transactions are uneven: significant value transfers among cohorts can result from joining a pure CDC plan. We then compare these to the additional value transfers arising from explicit stabilization mechanisms.