The Determinants of Occupational Pensions
Erik Hernæs, John Piggott, Tao Zhang and Steinar Strøm
Journal of Pension Economics and Finance, 10 (3) : 435–456, July, 2011
The occurrence in firms of occupational pensions is investigated with a linked employer– employee dataset, supplemented with actuarial calculations of tax savings when labour compensation is in the form of pensions compared to wages. Tax gains, which can be shared between employers and employees, and expected increases in average tenure are both clearly associated with the occurrence of an occupational pension. Occupational pensions are typically found in large firms, with decentralized wage negotiations, a high degree of unionization, and the requirement of long training. The results and the approach provide a basis for analyzing also the trend towards DB pensions.