A viable pension reform: The importance of mechanisms which promote listening to each other

Petr Hedbavny

Charles University in Prague, Faculty of Social Sciences, Institute of Economic Studies, Opletalova 26, 110 00 Praha 1, Czech Republic

Pension reform is perceived as a reform of rules, while these rules should reflect voters' preferences about redistribution via pension system. The central topic is the viability of a reformed pension system. Available pension system is such that delivers maximum expected pension given voters' preferences about redistribution via pension system. The viability of the pension system is endangered if the setup of the pension system makes it possible for some actors to follow individual maximization strategies at the expense of other pension system participants. Following the Pareto efficiency criterion, the requirement for the development of a viable pension system is a wide consensus across political parties, tripartite and other possible strong interest groups. Therefore the design of mechanisms which help achieve wide consensus on the shape of the reformed system is of crucial importance.