Sharing Longevity Risk in the Brazilian Social Security System: An Analysis of Alternative Approaches

Descrição

Longevity risk sharing in pension design has become an increasingly important topic due to the aging of populations around the world. Innovative solutions are being proposed for the private annuity market, and many countries are adopting automatic mechanisms to ensure the sustainability of their social security systems. However, Brazil seems to be lagging behind these developments, as its national social security legislation does not currently include longevity risk sharing mechanisms or any other form of automatic adjustment. Therefore, this research project aims to address the following question: How can automatic longevity risk sharing mechanisms be integrated into the Brazilian General Social Security Scheme, and what impact might they have on retirees' income? To answer this question, I will review the literature on longevity risk sharing solutions and automatic adjustment mechanisms in social security systems, with a focus on adapting the most innovative actuarial approaches to the Brazilian context. Additionally, to support the development of a suitable longevity index, I will analyze life tables from the Brazilian Institute of Geography and Statistics, as well as from international sources, such as the United Nations Population Division.