Year: 2026
Type: article
Abstract: Population aging, driven by rising life expectancy, is putting increasing pressure on the long-term sustainability of public pay-as-you-go pension schemes worldwide, leading many countries to consider or implement reforms.While increasing the statutory retirement age is often presented as the most direct response, it is politically contentious and can intensify generational and social inequalities that already challenge actuarial fairness.Such inequities reflect not only differences in lifetime earnings but also systematic disparities in life expectancy across social groups.This paper examines redistribution in public old-age pension systems across regions, genders, and birth cohorts, focusing on inequalities in expected returns and on policy options to mitigate them while maintaining sustainability.We develop a comprehensive cash-flow model that combines regional mortality projections with 1 Corresponding author.Address: 1093 Budapest, Fővám tér 8., Hungary. macroeconomic assumptions, and we quantify redistribution by comparing expected real internal rates of return on contributions across groups.The Hungarian pension system is used as an illustration, based on cohorts born between 1970 and 1985.The results suggest substantial heterogeneity in expected returns: representative participants' expected real internal rates of return range from 1.1% to 3.5%, with women receiving higher returns than men.Despite having the highest earnings and life expectancy, Central Hungary exhibits the lowest returns, and younger cohorts are projected to attain higher returns than older ones.These patterns indicate structural redistribution within the system.The paper contributes to the literature by showing how integrated cash-flow modeling can reveal otherwise hidden inequalities and by discussing policy strategies to address them.While the numerical findings are specific to Hungary, the proposed methodology is broadly applicable to pension policy design in other aging societies.
Language: Hungarian
Subfield: Accounting
Domain: Social Sciences
SDG: Reduced inequalities
Open Access status: green
OpenAlex ID: W7214510096
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