RAISING THE AGE OF THE RETIREMENT FOR FINANCIAL SUSTAINABILITY AND ACHIEVEMENT OF THE CONSTITUTIVE MISSION OF PENSION SYSTEMS

This paper analyzes some issues concerning pension systems. Three are the main findings. Firstly, it shows that the defined benefit pension system is able to contrast the financial unsustainability of the pension system in the same way as the defined contribution pension system. Secondly, it highlights that in the defined contribution pension system the amount of the pension must necessarily be endogenous so that it becomes necessary to renounce the achievement of the constitutive objective of the pension system, namely consumption smoothing. Finally, it argues that the extension of the retirement age is able to counteract the aging of population and allow the achievement of both financial sustainability and individual well-being.