Annals of Finance

, Volume 9, Issue 4, pp 573–588

Pension fund taxation and risk-taking: should we switch from the EET to the TEE regime?

Research Article

DOI: 10.1007/s10436-012-0204-3

Cite this article as:
Romaniuk, K. Ann Finance (2013) 9: 573. doi:10.1007/s10436-012-0204-3


Most countries tax retirement savings according to the EET (exempt contributions, exempt accumulations, taxable withdrawals) regime. Relevant literature recommends the use of TEE (taxable contributions, exempt accumulations, exempt withdrawals) or EET systems and emphasizes their near equivalence. We show that this near equivalence breaks down when considering the tax effects on risk-taking. This paper proves that the TEE regime is risk-taking neutral, while the EET regime does not, in general, respect this property. The argument of risk-taking neutrality thus calls for broadening the use of the TEE configuration.


TaxEET regimeTEE regimePension fundsDefined contributionDefined benefitRisk-taking

JEL Classification


Copyright information

© Springer-Verlag 2012

Authors and Affiliations

  1. 1.Department of EconomicsUniversidad de Santiago de ChileEstación CentralChile
  2. 2.PRISMUniversité de Paris 1 Panthéon-Sorbonne 1ParisFrance