Addressing Longevity Inequality: How Retirement Age Differentiation Can Be Implemented

Svend E. Hougaard Jensen, Thorsteinn Sigurdur Sveinsson, Gylfi Zoega*

*Corresponding author for this work

Research output: Contribution to journalReview articlepeer-review


Differences in life expectancy across socioeconomic groups create a serious problem of inequality within the public part of the pension system. This article considers two actuarially sound ways of addressing longevity inequality. The first is to allow low life-expectancy workers to retire earlier and delay the retirement of the high life-expectancy workers so that the two groups receive the same amount, equal to the expected discounted value of future pension benefits received by the average worker under the current system. The second, and more radical, is to delegate to occupational pension funds the task of paying out the public pension benefits to each retiree, based on a lump-sum transfer from the government to the pension funds of an amount for each retiree equivalent to the payout in the first scenario. (JEL codes: E21 and E24)
Original languageEnglish
JournalCESifo Economic Studies
Issue number1
Number of pages16
Publication statusPublished - Mar 2024


  • Longevity
  • Retirement
  • Inequality

Cite this