Year: 2021
Type: article
Study design: Observational Study
Abstract: Moving from a Defined Benefit (DB) to a Notional Defined Contribution (NDC) pension formula creates significant re-distributive effects. We estimate the amount and the intensity of these effects in the case of the Italian transition to NDC, which began in 1995. Based on administrative data of the main Italian pension scheme (FPLD), we study the evolution of yearly inequality within old-age pension benefits. Furthermore, we study the adequacy and the actuarial fairness of the pension system, by estimating the replacement rates and the Net Present Value Ratio distribution for workers who retired in the period 1996–2019. Our results show that the very generous interpretation of acquired rights determined by the 1995 reform has contributed to maintaining a high level of adequacy and a significant level of intergenerational imbalance. The financial costs of this imbalance are estimated and its extent is significant.
Author: Carlo Mazzaferro
Institution: University of Bologna
Language: English
Subfield: Finance
Domain: Social Sciences
SDG: Reduced inequalities
Open Access status: hybrid
Estimated APC paid: $3,162
OpenAlex ID: W3203757579