by Antonio Abatemarco (CeRP), who will present the first results of his research on the topic.
In the Laeken summit (2001), the EU-15 agreed on eleven common objectives to ensure adequacy and sustainability of pension systems. In this study, we propose a methodology for adequacy comparisons among different societies, where the meaning of adequacy is exclusively inferred from the Laeken-objectives, ie. the reduction of poverty among the elderly, consumption smoothing at retirement, intra- and inter-generational solidarity.
In order to measure the degree to which each of the adequacy objectives is attained, both an actual and a theoretical pension income distribution is considered, where the former is obtained under the eligible benefit formula, while the latter is calculated under the hypothesis of actuarial equivalence.
As a result, four different indexes are proposes. Poverty and progressivity indexes are drawn from similar topics in the existing literature and adapted to the social security scenario. Smoothing and inter-generational solidarity ones, instead, are obtained through the generalization of corresponding replacement ratios.