Altruism and fairness in a public pension system

21

Appendix B Example from the questionnaire

We show a part of the questionnaire in order to demonstrate how the information was provided to a (young)
respondent. The question involved was as follows: How would you evaluate the situation with lower contribution
rates and lower pension benefits? The respondent already evaluated the basic situation.

basic situation (grade ..) situation with lower contributions

own ratio                                              1.2                        1.15

In this example the public pension contribution of the (male) respondent in the basic situation (BS) was 493 Dutch
guilders whereas it was 300 Dutch guilders for an average (middle-aged) person. The public pension in the basic
situation was 1974 Dutch guilders. In the hypothetical situation with lower contributions (LC) the contribution
rate was determined to be 9%. The contribution of the respondent was reduced to 317 Dutch guilders and that
of an average person to 193 Dutch guilders. The pension benefit was reduced to 1269 Dutch guilders. The rates
of return decreased due to the lower pensions. As it was assumed that differences between contributions in BS
and LC will be saved, the respondent would save 176 Dutch guilders per month in a savings account. When
retired the account would pay him 1022 Dutch guilders per month, whereas an average male middle-aged person
would get 101 Dutch guilders per month when he would save 107 per month now. The large difference in the
return on savings between the young respondent and the average middle-aged individual exists due to a difference
in age and in income. For the respondent the public pension plus savings would amount to 2291 Dutch guilders
(which is higher than the current public pension), while it would be only 1370 Dutch guilders for an average
middle-aged person. Finally, the current old would only receive 1269 Dutch guilders.

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