Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/273801 
Year of Publication: 
2022
Series/Report no.: 
Tinbergen Institute Discussion Paper No. TI 2022-088/IV
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
We explore how members of a collective pension scheme can share inflation risks in the absence of suitable financial market instruments. Using intergenerational risk sharing arrangements, risks can be allocated better across the various participants of a collective pension scheme than would be the case in a strictly individual- or cohort-based pension scheme, as these can only lay off risks via existing financial market instruments. Hence, intergenerational sharing of these risks enhances welfare. In view of the sizes of their funded pension sectors, this would be particularly beneficial for the Netherlands and the U.K
Subjects: 
pension funds
intergenerational risk sharing
unhedgeable inflation risk
incomplete markets
welfare loss
JEL: 
C61
E21
G11
G23
Document Type: 
Working Paper

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