‘Fiscal redistribution’ includes pensions.
Malte Luebker 15, Senior Researcher at the Institute of Social and Economic Research, 2015, “Redistribution policies,” Labour Markets, Institutions and Inequality: Building Just Societies in the 21st Century, pp. 211-241, ISBN: 978-1-78471-209-9, http://www.e-elgar.com/shop/labour-markets-institutions-and-inequality
While the conventional analysis of fiscal redistribution has important insights to offer, it has some conceptual shortcomings. One important concern is that a snapshot taken at a single point in time (usually for a given year) focuses only on inter-personal redistribution, ignoring life-cycle redistribution. For instance, old-age pensions appear as if they were a transfer from the young (who pay contributions and/or taxes to fund them) to the old (who receive pensions). In reality, the young and the old are not two distinct groups, but young workers will grow old over time so that today’s contributors are tomorrow’s beneficiaries. There is of course no guarantee that an individual’s benefits will be equal to her or his contributions (those who die young will not receive anything in return, and those who are blessed with longevity will generally gain more). Pension systems therefore remain redistributive – albeit to different degrees, depending on their design (see Chapter 9 by C. Behrendt and J. Woodall).