Extending the Retirement Age for Preserving the Costitutive Pension System Mission

Abstract

This paper examines some issues relating to the establishment of defined contribution pension system. First, it shows that the defined benefit pension system could successfully counteract the financial un-sustainability of the pension system, such as defined contribution pension system. Second, it notes that defined contribution pension system re-quires the pension amount to be endogenous and, as a consequence, the abandonment of the constitutive aim of the pension system e.g., consumption smoothing. Third, it argues that the extending of the retirement age may counteract the aging of the population and achieve financial sustainability, along with the individual well-being.