ABSTRACT
With reference to the U.S. Old-Age Survivors and Disability Insurance program (OASDI), it has been argued that
the individual risk of losing income through retirement or disability or (for dependents) the death of the wage earner can be calculated by actuarial methods and is covered by OASDI in a way that corresponds crudely to all kinds of insurance - through the “miracle of large numbers”. In contrast, uncertainty can also cause loss of income in its definition as the inalculable probability of cataclysms that afflict an entire society: war, massive economic depression, inflation… Coverage for uncertainty, however, was judged to lie outside the operation of the system as social insurance. 1
It is our main argument that old-age pensions in their modern form (that is, dynamic pensions which attempt to provide an income stream which is (1) continuous, (2) adequate, (3) constant in terms of purchasing power, and (4) capable of maintaining the socioeconomic position of the retired person relative to the working population) have as their main function the provision of insurance against these types of uncertainties that prevent individuals from making efficient accumulation of assets for their retirement needs.