Pension systems, intergenerational risk sharing and inflation

Everywhere in the industrialised world, population ageing is putting social security systems under financial strain. As a result, social security systems are being reformed in many countries. In particular, various countries move from pure pay-as-you-go (PAYG) systems to pension systems that include a larger funded component. At the same time, defined benefit systems in which benefits are guaranteed by public or corporate sponsors are being replaced by defined-contribution systems in which benefits are subject to various risks.