To insure or to smooth? Paternalistic rationales for mandatory retirement funding

Abstract It is often thought that compulsory retirement funding gains support from paternalistic considerations. This paper examines this claim. I argue that compulsory retirement funding is more coherent when understood as an attempt at temporal smoothing than counterfactual insurance. An implication is that any paternalistic case for retirement funding faces problems that are more severe than they would be if compulsory retirement funding were insurance. I label these the problems of ‘inverted bias’ and of the ‘arbitrariness of income from labour’. The paper then makes some suggestions about how these points about paternalism bear on the problem of justice in retirement funding.