Articles Archives - Pension Policy International

16OctOctober 16, 2026

The Duration Gap: Value-at-Risk, Interest-Rate Swaps and the 2026 Losses of Chile’s Most Conservative Pension Fund

By Alfredo Merlet Between January and September 2026, Fund E, the most conservative of Chile's five mandatory pension fund types, lost about ten per cent in real terms, its second-worst result on record, while the funds' positions in foreign interest-rate derivatives swung to a reported valuation loss of about US$7.7 billion. This article asks why standard Value-at-Risk (VaR) measures did not warn of the loss. Using daily unit values for the seven pension fund administrators (AFPs) from January 2015 to...

October 16, 2026

Articles, Investment2026, Chile, Investment, Pension Management, Returns

16OctOctober 16, 2026

Optimal Transition Schedules for Retirement Age Increases: Welfare and Intergenerational Fairness

By Yaodi Yong, Jinggong Zhang & Xiaobai Zhu In response to demographic shifts such as declining fertility rates and increasing life expectancy, many countries are raising the full retirement age (FRA). This paper develops a novel optimization framework for designing FRA increase schedules, explicitly balancing the minimization of aggregate welfare loss across affected generations with intergenerational fairness considerations. Within a continuous-time framework, we model welfare loss through disutility functions applied to actuarial losses generated by pension reforms, while incorporating smoothness...

October 16, 2026

Aging, Articles2026, Aging, Pension Reform, Retirement Age, Social Security

16OctOctober 16, 2026

When Retirement Faces Climate Risks: Linking Socio-Economic Pathways with Financial Outcomes

By Stephanie Neal & Laurens Swinkels Standard analyses of retirement adequacy focus on financial metrics such as contribution rates and replacement ratios, while climate scenario studies typically emphasize broad macroeconomic outcomes. Neither approach, however, directly addresses what matters most to individuals: the quality of life in retirement. Retirement security under climate change is inherently multidimensional, shaped not only by financial wealth but also by health systems, infrastructure, environmental conditions, and social resilience. We develop an integrated framework that combines qualitative...

October 16, 2026

Articles, Pension design2026, Climate crisis, Investment, Public Policy, Risk, UK

09OctOctober 9, 2026

The impact of pension on the health behavior of elderly rural residents: evidence from China

By Rui Li, Duanyang Gao & Yuying Yang Background Unhealthy behavior is an important factor threatening the health of older rural residents in China. We examine the effects of receiving pension on elderly rural residents’ health behavior (namely conscious control of sugar, salt, and edible oil intake, as well as learning health or wellness knowledge), also including effect heterogeneity by income level and gender. Methods Using China Rural Revitalization Survey (CRRS) in 2020, we used the policy rule of the...

October 9, 2026

Adequacy, Articles2026, Adequacy, China, Health

09OctOctober 9, 2026

Retirement Security in the US Is Stuck in the Past

By Catherine Thurtle Open a retirement statement today, and the numbers look a little better than in 2020. Open the news, and the ground looks a lot less steady. That gap sums up where retirement security stands in 2026. Fewer than six in 10 US residents (59%) agree they’re currently building, or have already built, a big enough retirement nest egg. That’s according to Life and Money: Retirement Security in the USA, new research fielded by The Harris Poll on behalf...

October 9, 2026

Articles, System Sustainability2026, savings, Social Security, US

07OctOctober 7, 2026

The Pensions Brief: October 2026

By Andrew Block & Katherine Carter The Pensions Regulator (TPR) has published a market oversight report on investment by UK pension schemes in private markets, particularly UK private markets. Key findings include: Trustees are open to UK private market investments if the investments offered meet the scheme’s investment needs and characteristics. DC schemes and master trusts with the necessary scale and capacity have made significant progress, but appetite is limited among DB schemes to invest in private markets beyond private credit...

October 7, 2026

Articles, System Characterization2026, Investment, Pension Management, Taxation, UK

02OctOctober 2, 2026

Redistribution with Unequal Life Expectancy

By Sebastian Köhne I study life-expectancy inequality in a Mirrleesian life-cycle framework with pension-linked fiscal externalities and private retirement saving. Heterogeneous longevity affects optimal redistribution by changing both the expected fiscal cost of pension benefits and the mapping from disposable income into social marginal welfare. I derive an ABCD optimal tax formula that incorporates these efficiency and equity effects. Calibrated to the U.S. economy, the model implies that accounting for heterogeneous longevity lowers optimal marginal tax rates, particularly at the...

October 2, 2026

Articles, Savings2026, Equality, Longevity, savings, Taxation

02OctOctober 2, 2026

Can Voluntary Health Insurance Ease the Burden on Public Healthcare? Theory and Evidence from Europe

By Clara Andresciani, Debora Di Gioacchino & Laura Sabani This paper revisits the “decongestion effect” argument, according to which greater reliance on privately financed healthcare relieves pressure on public services. We develop a probabilistic voting model in which individuals, who differ in income, may purchase tax-deductible private health insurance, thereby gaining access to private care and reducing their demand for public healthcare. The model predicts that, as more individuals opt for private care, both political support and fiscal resources for...

October 2, 2026

Articles, System Sustainability2026, Europe, Healthcare, Sustainability

02OctOctober 2, 2026

How Population Ageing and Pension Insurance Shape Household Risk Investment: Evidence from China

By Xueyao Que, Zhen Wang & Chu Chen Against the backdrop of rapid population ageing and the ongoing expansion of China’s multi-tiered pension insurance system, understanding how to promote household risk investment has become increasingly important for fostering the development of the silver economy and improving household wealth allocation. Using data from the 2019 China Household Finance Survey (CHFS), this study empirically examines the effects of population ageing and pension insurance on household risk investment behaviour and explores the underlying...

October 2, 2026

Aging, Articles2026, Aging, Investment, Risk

25SepSeptember 25, 2026

Population Aging and Fiscal Sustainability in Resource-Rich Economies: The Case of Chile

By Juan Medina, Michael Pedersen & Gerardo Reyes Emerging economies face long-run fiscal sustainability challenges associated with demographic change and the productive capacity of commodity sectors. Population aging can weaken labor supply growth, constrain tax bases, and increase age-related public expenditures, while declining productivity in non-renewable sectors may further limit fiscal capacity and economic growth. This paper develops a semi-structural macro-fiscal model to analyze the long-term implications of population aging for economic growth, fiscal sustainability, and public debt dynamics in...

September 25, 2026

Articles, System Sustainability2026, Aging, Chile, System sustainability