ABSTRACT
Possible future trends in the development of pension adequacy are usually simulated using dynamic microsimulation models. These models are very complex and include many different processes. This, and the many individual interactions, make it difficult to see which procedures and relations underlie the observed simulation results. Hence, the discussion of simulation results, and especially trends, tends to be based on ‘common sense reasoning’ using only a few fundamental parameters. As an example, the discussion of the simulation results of the Belgian version of the MIDAS model (Dekkers et al. 2010) hinges on fundamental relations between demographic ageing, the indexation of pensions to the development of wages, and inequality of pensions and the poverty risk among pensioners.
