Abstract
Fairness is an important feature of pension systems, but it is a wide concept with multiple sides. In this chapter, we try to distinguish some of them with the aim of using the terms in a proper manner. More specifically, we have observed at least five meanings for the notion of fairness when applying to a pension system: justice, equity, neutrality, solidarity and integrity. We explain each sense of fairness and other related concepts. We also provide, when possible, a way to measure each of them, with some figures for a selected European countries.
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Notes
- 1.
\( A\left(r,\lambda, s,j,T\right)={\sum}_{i=j}^T{\left(1+r\right)}^{j-i}{\left(1+\lambda \right)}^{i-j}{s}_i \)
\( {s}_i=\prod \limits_{k=j}^i\left(1-{q}_k\right) \), where qk is the mortality rate from age k to k + 1 (qT = 1).
- 2.
- 3.
For example, the age or reference is 62 in Finland, 65 in Portugal and 67 in Spain. In addition, in Spain and Portugal, the adjustment is a ratio of life expectancies instead of a ratio of annuity factors.
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Meneu-Gaya, R., Encinas-Goenechea, B., Domínguez-Fabián, I. (2020). Equity of Public Pension System. In: Peris-Ortiz, M., Álvarez-García, J., Domínguez-Fabián, I., Devolder, P. (eds) Economic Challenges of Pension Systems. Springer, Cham. https://doi.org/10.1007/978-3-030-37912-4_7
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