Abstract
The public pension system in Italy is a defined contribution scheme based on the principle of actuarial fairness. The pension annuity is calculated starting from capitalised value and the Legislated Conversion Factors (LCFs) for each retirement age. The demographic parameters used by legislators in computing the LCFs are the survival probabilities of an average Italian, irrespective of gender or any characteristic except age. The aim of this paper is to analyse the impact of the differences in survival between men and women, and between individuals with different educational levels, on the calculation of the pension annuity, starting from the specific Conversion Factors (CFs). The gap between the LCFs and the factors obtained by allowing for differential survival across gender and socio-demographic groups (CFs) gives us a means of making a quantitative assessment of the implicit redistributive impacts of the annuity redistribution from individuals with a lower life expectancy to individuals with a higher life expectancy.
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