Managing longevity risk in Polish pension system with the use of behavioral incentives

Abstract

The longevity risk is the risk of living longer than expected. In relation to pension systems, the concept of pension longevity is utilized. On an individual basis, the realization of longevity risk can lead to the depletion of pension savings. Group (aggregate) longevity risk – the risk that a specific age cohort will live longer than expected – is significant for public and private institutions obligated to pay lifetime annuities. The aim of this paper is to present preliminary research results on the implementation of behavioral incentives to mitigate longevity risk in the Polish pension system.