The German Retirement Benefit Formula: Drawbacks and Alternatives

Abstract

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Unemployment, human capital depreciation and pension benefits: an empirical evaluation of German data

“… See Breyer and Hupfeld (2009) and(2010), andBreyer and Kifmann (2004), for example, for discussions of the contribution-benefit linkage in the German pension system.19 Fisher and Keuschnigg (2010), for example, illustrate how several pension reform scenarios are geared either towards young or old workers or both groups. SeeColombino et al (2011) on labor supply responses to pension reforms in Norway.…”

“… 18 See Breyer and Hupfeld (2009, 2010) and Breyer and Kifmann (2004), for example, for discussions of the contribution–benefit linkage in the German pension system.…”

How automatic adjustment factors affect the internal rate of return of PAYG pension systems

“…Individual (ex-ante) utility is assumed to depend on net lifetime income and on the variance of this income. Breyer and Kifmann (2004), finally, deal explicitly with the German pension formula and they focus on its properties in the presence of increases in life expectancy. Wagener (2003) has challenged this result by using a different (ex-post) welfare criterion and by allowing for optimal (savings) decisions.…”

“…a parameter 0<α<1). Breyer and Kifmann (2004), finally, deal explicitly with the German pension formula and they focus on its properties in the presence of increases in life expectancy. They deal both with questions of intragenerational equity (due to group-specific differences in life expectancy) and with intergenerational issues (due to trends in population growth and longevity).…”

Rich and healthy—better than poor and sick?

“…3 Breyer and Kifmann (2002) analyze the effect of the adjustment of discounts for early retirees on the implicit tax rate-however, heterogeneous life expectancy does not matter in their analysis. Its separate effect on the implicit tax of a pension system is analyzed in Breyer and Kifmann (2004). Fenge et al (2006) derive a factual and an optimal life-cycle profile of the implicit tax imposed by a system of social security and find that actual as well as optimal implicit taxation differs even despite absent differences in duration under the benefit spell.…”