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Better safe than sorry - Individual risk-free pension schemes in the European Union

Peeters, Marga (2012) Better safe than sorry - Individual risk-free pension schemes in the European Union. [Policy Paper] (Submitted)

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    Abstract

    Variations between the diverse pension systems in the member states of the European Union hamper labour market mobility, across country borders but also within the countries of the European Union. From a macroeconomic perspective, and in the light of demographic pressure, this paper argues that allowing individual instead of collective pension building would greatly improve labour market flexibility and thus enhance the functioning of the monetary union. I argue that working citizens would benefit, for three reasons, from pension saving in a risk-free savings account. First, citizens would have a clear picture of the accumulation of their own pension savings throughout their working life. Second, they would pay hardly any extra costs and, third, once retired they would not be subject to the whims of government or other pension fund managers. This paper investigates the feasibility of individual pension building under various parameter settings by calculating the pension saved during a working life and the pension dis-saved after retirement. The findings show that there are no reasons why the European Union and individual member states should not allow individual risk-free pension savings accounts. This would have macroeconomic benefits and provide a solid pension provision that can enhance mobility, instead of engaging workers in different mandatory collective pension schemes that exist around in the European Union.

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    Item Type: Policy Paper
    Uncontrolled Keywords: Pensions; labour market; monetary union.
    Subjects for non-EU documents: Other > integration theory (see also researching and writing the EU in this section)
    EU policies and themes > Policies & related activities > economic and financial affairs > EMU/EMS/euro
    EU policies and themes > Policies & related activities > employment/labour market > labour/labor
    EU policies and themes > Policies & related activities > social policy > welfare state
    Subjects for EU documents: UNSPECIFIED
    EU Series: UNSPECIFIED
    ["eprint_fieldname_eusries" not defined]: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Depositing User: Dr Marga Peeters
    Official EU Document: No
    Language: English
    Date Deposited: 23 Feb 2012 13:29
    Number of Pages: 25
    Last Modified: 23 Feb 2012 13:29
    URI: http://aei.pitt.edu/id/eprint/33612

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