EAA Web Session ‚Measuring Intergenerational Fairness and Pensions‘

The aim of the web session is to provide pension actuaries and other interested experts with an overview of topics and methods in relation to the discussion of intergenerational fairness. This web session continues the first session in October 2025 and now dives deeper into actuarial modelling.

First, we will briefly introduce the concept of intergenerational fairness for those who couldn’t attend last October. This means that this session is generally open to all interested participants. According to the equity concept, similar careers should result in similar benefits, or even the value of the benefits should be equal to the contributions. From a different perspective, insured persons should get their (socially) agreed level of pensions over long periods under the same conditions, and even socially agreed needs also should be financed from the fund. These approaches lead to different conclusions from actuarial fairness to social fairness.

Both approaches represent the benefit adequacy aspect of pensions. Next, we deal with real life issues, where the financial sustainability of the pension systems is the hard limit for delivering pensions. At this layer external factors, like economic and demographic developments and, not independently, investment conditions matter. In case of funded pensions financial sustainability translates into funding and cost issues. Modelling pension systems is making assumptions about economic and demographic parameters.

The adequacy and sustainability objectives are contradictory by definition, and we must balance between them. Socio-economic groups embrace this duality of the problem. First, we discuss the traditional deterministic and stochastic or pricing model approaches. Next a generalized approach will be introduced […].