Shared retirement funds that are meant to protect everyone actually end up funneling money from the poor to the rich.
March 24, 2026
Original Paper
An Assessment Framework for Equitable Longevity Risk-Sharing Arrangements
SSRN · 6396658
The Takeaway
Because lower-income people generally have shorter life expectancies, they pay into collective pension pools but die before they can collect much. Their 'forfeited' funds end up funding the longer retirements of wealthier participants, turning a safety net into a regressive wealth transfer.
From the abstract
Longevity risk-sharing arrangements can provide lifetime retirement income without capital-backed guarantees, but can create unintended wealth transfers when participants differ in longevity and wealth. Such transfers may systematically benefit some groups, raising concerns about fairness in benefit allocations. This paper introduces a Gini-based assessment framework to evaluate the proportionality of inter-group benefit transfers, which we define as equitability. The framework measures how ineq