Comparative Pension Microsimulation using microWELT: Lessons from Benchmarking to a Detailed National Model

Comparative pension microsimulation supports coherent cross-country policy analysis by us-ing harmonised inputs such as EU-SILC. Yet institutional heterogeneity and limited life-course information in standardised surveys constrain how credibly national rules, accrual mecha-nisms, and retirement pathways can be represented within a portable framework. Portability is feasible, but for most countries the feasibility frontier is set by what can be inferred from harmonised data and how much institutional detail can be included without sacrificing com-parability. We explore the validity domain of comparative modelling by benchmarking a comparative model against a detailed national model in a controlled “sister-model” setting. Our compar-ative model is microWELT, designed for multi-country applications and therefore built around portable representations of labour-market and retirement transitions and simplified pension benefit calculations. Retirement timing follows parsimonious rules centred on statutory ages, and benefits are approximated via mappings from pre-retirement earnings. microWELT is pa-rameterised for eight European countries and serves as a uniform base for refining national applications. We compare microWELT to microDEMS, a closely related detailed Austrian model built on longitudinal administrative data. microDEMS reconstructs employment and insurance careers and implements Austrian pension law at a granular level, including path-way-specific eligibility and benefit calculations that depend on accumulated insurance peri-ods and full contribution histories. This pairing allows us to attribute projection differences directly to data richness and institutional detail - rather than to unrelated modelling choices. Empirically, we use Austria’s reform harmonising women’s statutory retirement age with men’s as a demanding test case. Although the reform is simple to describe, it is difficult to capture with stylised comparative rules because it is phased in over time and interacts with multiple exit routes from the labour market whose availability depends on career histories. We run matched baseline and reform scenarios focussing on retirement transitions over the next decade under harmonised demographic and macro assumptions and compare age- and cohort-specific retirement and employment profiles as well as the timing of pension claiming and aggregate expenditure trajectories.