The case for an unfunded pay as you go (PAYG) pension
Status: This talk is in preparation - details may change
Status: This talk has been cancelled
The previous two lectures grappled with various challenges that funded collective pension schemes face. In the final lecture, I ask whether an unfunded ‘pay as you go’ (PAYG) approach might provide a solution. With PAYG, money is directly transferred from those who are currently working to pay the pensions of those who are currently retired. Rather than drawing from a pension fund consisting of a portfolio of financial assets, these pensions are paid out of the Treasury’s coffers. The pension one is entitled to in retirement is often, however, a function of, even though not funded by, the pensions contributions one has made during one’s working life. I explore the extent to which a PAYG pension can be justified as a form of indirect reciprocity that cascades down generations. This contrasts with a redistributive concern to mitigate the inequality between those who are young, healthy, able-bodied, and productive and those who are elderly, infirm, and out of work. I explore claims inspired by Ken Binmore and Joseph Heath that PAYG pensions in which each generation pays the pensions of the previous generation can be justified as in mutually advantageous Nash equilibrium. I also discuss the relevance to the case for PAYG of Thomas Piketty’s claim that r > g, where “r” is the rate of return on capital and “g” is the rate of growth of the economy.
Date: 30 April 2020, 15:00 (Thursday, 1st week, Trinity 2020)
Venue: Examination Schools, 75-81 High Street OX1 4BG
Venue Details: South School
Speaker: Professor Michael Otsuka (London School of Economics)
Organising department: Oxford Uehiro Centre for Practical Ethics
Organiser contact email address: rachel.gaminiratne@philosophy.ox.ac.uk
Part of: 2020 Annual Uehiro Lectures in Practical Ethics: How to pool risks across generations: the case for collective pensions
Topics:
Booking required?: Not required
Booking url: https://bookwhen.com/uehiro#focus=ev-s22q-20200430150000
Cost: Free
Audience: Public
Editor: Rachel Gaminiratne