Automatic balancing mechanisms of pension systems: theory and experiences of brakes and life expectancy coefficients

Finnish Centre for Pensions, Reports 2010:7, 67 p.


Sanna Tenhunen and Risto Vaittinen

Faced with the prospect of an ageing population, many countries have implemented a balancing mechanism that allows for automatic detection of pressures on the sustainability of pension system financing caused by changes in the old-age dependency ratio. The report examines the features of the automatic balancing mechanisms and presents various balancing mechanisms in use.