How are pension integration and pension benefits related?

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Abstract

Pension integration is the ability to allow differentiated pension benefits across earnings groups. In the academic literature, it is often described as a way for firms to reduce pension benefits (and therefore costs). Justified by the requirement that firms pay half of Social Security payments, integrated pensions are typically found to reduce benefits for lower income workers. Data on retirees from the Health and Retirement Study, however, reveal a more complex picture where some individuals receive more benefits when one of their pension plans is integrated, ceteris paribus. Some reasons are discussed why this might be the case.
Original languageEnglish
Pages (from-to)26-41
Number of pages16
JournalThe Quarterly Review of Economics and Finance
Volume49
Issue number1
Early online date25 Nov 2008
DOIs
Publication statusPublished - Feb 2009

Keywords

  • integrated pensions
  • social security
  • pension benefits

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