Saturday, June 4, 2011

European pension innovation

FYI, since 2010, Finland has been using a "life expectancy coefficient" to calculate the amount of old-age pensions. The coefficient started out at 1. If the average life expectancy increases, then the coefficient decreases. The coefficient is multiplied by what would be the normal pension payment.

In addition, "The life expectancy coefficient offers the insured a chance to choose whether to preserve the size of their present pension by staying longer in the labour market, or whether to accept a somewhat smaller pension at the current retirement age."

Leave it to euro-socialists to find a cost-effective solution to Baby Boomers' ever-increasing longevity!

No comments: