Aging & Society: Eighth Interdisciplinary Conference

Abstract

One of the main challenges population ageing poses to the welfare state is the affordability of the pension system. In order to make their pension systems more robust, several industrialised countries have passed legislation to increase the retirement age and to link it to life expectancy. While these reforms are made with the financial sustainability of the pension system in mind, little is known about their social sustainability. This paper focuses on how the indexation of the retirement age to life expectancy affects social inequalities in old age. The paper consists of three sections. First, we elaborate on Schokkaert and Van Parijs’ (2003) Rawlsian conception of social justice and pension reforms, with a focus on indexing the retirement age to life expectancy. In a second step, we describe the pension reforms implemented in four countries (Denmark, Finland, the Netherlands, and the United Kingdom) increasing the retirement age and linking it to life expectancy, and subsequently we analyse them from a social justice perspective. Finally, some simulations are made to illustrate the income inequalities in old age generated by indexing the retirement age to life expectancy. Based on our initial findings, we conclude that, even though social justice is used as an argument for increasing the retirement age from an intergenerational perspective of financial sustainability, linking the retirement age to life expectancy harms those same principles of social justice when approached from an intra-generational perspective of social sustainability.