Purpose: This paper offers an explanation to pension systems cyclical reforms, based on Central East Europe (CEE) countries experience over the last three decades. Design/Methodology/Approach: This paper develops a theory of risk sharing process and demonstrate it based on global experience over the last two decades. Finding: During the transition to funded pension design, the government not only transfers longevity and fiscal risks to the individual but also absorbs risks transferred from the public, where each market actor transfers undiversifiable risks to the other. The outcomes of this risk path realized in financial transfers, such as social security, means-tested and minimum pension guarantee. Consequently, funded pension designs naturally converge to a new landscape paradigm of risk sharing, including intergenerational and intra-generational play. Financial crises such as the recent COVID-19 pandemic foster the convergence process. Practical Implications Governments and central planners have to consider risk sharing mechanisms to ensure sustainability of pension designs during the transitions to funded schemes. Originality/Value: To the best of the author's knowledge, no other paper attempted to study the bi-path ways of risk during the pension transition and discover the mutual expectation of the pension market actors. There is a vast literature of risk sharing study in comparison between funded and unfunded pension schemes.

Purpose: This paper aims to empirically examine the adequacy of the future benefits of the funded pension scheme. Design/methodology/approach: This study investigates a large real data sample from the largest pension fund in Israel and simulates expected benefits using a pension simulator. Findings: We found that even with relatively high market returns, the shift of pension provision from defined benefit (DB) to DC entails a significant shift of risk from capital to labor and might lead elderly participants to poverty during their retirement phase. We find Israel's pension system to be a unique playground for exploring an almost pure defined contribution (DC) pension system with a continuous trend toward capitalization and liberalization. Practical implications: This paper details the need to implement risk-sharing mechanisms in funded schemes, which provide a risk cushion against market fluctuations and alleviate income inequality and poverty. Originality value: Due to the pandemic crisis in 2020, we also showed that the expected pension benefits were vulnerable to financial, career, and systemic shocks.