Flexible Pension Take-up in Social Security

Y. Adema, J. Bonenkamp, A.C. Meijdam

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Abstract: This paper studies the redistribution and welfare effects of increasing the flexibility of individual pension take-up. We use an overlapping-generations model with Beveridgean pay-as-you-go pensions, where individuals differ in ability and life span. We find that introducing flexible pension take-up can induce a Pareto improvement when the initial pension scheme contains within-cohort redistribution and induces early retirement. Such a Pareto-improving reform entails the application of uniform actuarial adjustment of pension entitlements based on average life expectancy. Introducing actuarial non-neutrality that stimulates later retirement further improves such a flexibility reform.
Original languageEnglish
Place of PublicationTilburg
Number of pages40
Publication statusPublished - 2013

Publication series

NameCentER Discussion Paper


  • redistribution
  • retirement
  • flexible pensions


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