The aim of this report is to focus on defining the system’s steering rules. In particular, what are the system’s golden rules that should be subject to strong commitments by lawmakers in order to guarantee pension entitlements? To what extent can part of the steering process be subject to more flexible, ongoing decisions?
The methodology of this work is based on a theoretical analysis and the simulation of demographic and economic shocks, in order to study the consequences for the sustainability of the system and the level of pensions of different steering rules. This involves subjecting the pension system to stress tests, similar to the banking resistance tests simulated by central banks.
