The Proposed Model of Managing Longevity Risk in Pension Systems
The Proposed Model of Managing Longevity Risk in Pension Systems

Author(s): Marek Szczepański
Subject(s): Business Economy / Management, Economic policy, Public Finances, Fiscal Politics / Budgeting
Published by: Sveučilište Josipa Jurja Strossmayera u Osijeku, Ekonomski fakultet u Osijeku
Keywords: longevity risk; fiscal and behavioral incentives; life annuities; risk management model;
Summary/Abstract: This chapter aims to present an original, normative model for managing individual longevity risk in pension systems. The proposed model combines traditional fiscal incentives, chosen behavioral incentives (such as framing and default option) with appropriately selected financial instruments - specifically, deferred life annuities with guaranteed payment periods. After appropriate adaptation, this model could also be applied to pension systems in Poland and in other countries. Its potential implementation would enhance the financial and existential security of the older people and their households.

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