The Reform of Pension Systems : Winners and Losers Across Generations in the United Kingdom and Germany

In this paper we perform simulations with a stylized model of the United Kingdom and Germany to show which generations might be gainers, and which losers, from a transition from an unfunded to a funded state pension system. We show that it is likely that more than one generation will be direct losers as a result of a transition (especially in Germany). If more than one generation are direct losers, then, in order for those generations not to be net losers, the chain of bequests (in the initial equilibrium) needs to satisfy a simple condition, which we derive and analyse