A generic model for spouse's pensions with a view towards the calculation of liabilities

TL;DR

This paper presents a flexible, generic model for calculating liabilities of spouse's pensions, accommodating various pension types and enabling estimates based on marital behavior.

Contribution

The paper introduces a comprehensive, adaptable model for spouse's pensions that extends beyond existing standards like the Danish G82 concession.

Findings

Derived formulas for cashflows and liabilities for common spouse's pension types.

Showed how to recover standard G82 formulas as a special case.

Provided methods to estimate liabilities using marital behavior data.

Abstract

We introduce a generic model for spouse's pensions. The generic model allows for the modeling of various types of spouse's pensions with payments commencing at the death of the insured. We derive abstract formulas for cashflows and liabilities corresponding to common types of spouse's pensions. We show how the standard formulas from the Danish G82 concession can be obtained as a special case of our generic model. We also derive expressions for liabilities for spouse's pensions in models more advanced than found in the G82 concession. The generic nature of our model and results furthermore enable the calculation of cashflows and liabilities using simple estimates of marital behaviour among a population.