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3. Benefits – Values and Replacement Rates

The value of benefits provided under the different types of schemes varies across countries due to the existence of different and multiple pension programmes. Generally, values can be presented in both absolute and relative terms, i.e. as a percentage of average worker earnings. Replacement rates indicate the ratio of pensions to earnings. The gross replacement rate is defined as gross pension entitlement divided by gross pre-retirement earnings. The net replacement rate is defined as the individual net pension entitlement divided by net pre-retirement earnings, taking into account personal income taxes and social security contributions paid by workers and pensioners. Bismarckian systems are typically larger than Beveridgean systems. One explanation for this difference is that social contributions collected to finance the Bismarckian – earnings-related – benefits, cause smaller labour-supply distortions than a corresponding tax rate collected to finance Beveridgean benefits, as future benefits depend on past contributions.


  • Gross / net pensions replacement rates from public, mandatory private and voluntary private pension schemes, 2005 - 2013
    Table | 19.03.2015 | Details | Download | Visual Story
  • Indicators of the progressivity of pension benefit formulae, 2005 - 2013
    Table | 01.07.2014 | Details | Download
  • Mandatory public pension: Benefit conditions, 2014
    Table | 01.01.2015 | Details | Download
  • Net theoretical pension replacement rate, 2010 + 2050 (projection)
    Table | 01.11.2014 | Details | Download
  • Parameters and rules of income-replacement pensions, 2012
    Table | 01.12.2014 | Details | Download
  • Progressivity of Pension Entitlements
    Report | 03.03.2008 | Details | Download
  • Taxation and social security contributions from pension benefits, European Union, 2014
    Table | 01.01.2015 | Details | Download
  • Treatment of pensions and pensioners under personal income tax and social security contributions, 2013
    Table | 01.12.2014 | Details | Download
  • Value and coverage of basic, targeted and minimum pensions, 2011 - 2013
    Table | 01.07.2014 | Details | Download

Visual Story on gross/net pensions replacement rates (preview)

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