Apply replacement_rate_adjust to every pension system

CHANGELOG.md

@@ -7,6 +7,18 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 ## [Unreleased]
 
+### Bug Fixes
+
+- Fixes Issue [#1200](https://github.com/PSLmodels/OG-Core/issues/1200):
+  `replacement_rate_adjust` was read only inside `SS_amount`, so it applied
+  to the US-Style Social Security system and was silently ignored under
+  Defined Benefits, Notional Defined Contribution, and Points System. The
+  adjustment is now applied to those three systems in `pension_amount`,
+  via a `replacement_rate_adjustment` helper that mirrors the indexing
+  `SS_amount` already uses, including the per-cohort `t + tt` offset along
+  the time path. `SS_amount` is unchanged, so US-Style results cannot move.
+
+### Added
 - `npv_table` in `output_tables.py` (Issue #1131): builds a table of the net present value of the reform-minus-baseline change in flow variables (e.g. `Y`) over a horizon, evaluated at a list of discount rates. Values are un-stationarized by default so the NPV is taken over the actual (trend-inclusive) level path.
 
 ## [0.20.0] - 2026-08-13 12:00:00

ogcore/pensions.py

@@ -74,6 +74,45 @@ def replacement_rate_vals(nssmat, wss, factor_ss, j, p):
     return theta
 
 
+def replacement_rate_adjustment(pension, t, j, method, p):
+    """
+    Return the replacement rate adjustment, shaped to broadcast against
+    pension.
+
+    US-Style Social Security applies this itself inside SS_amount. The
+    other three systems do not, so pension_amount applies it for them.
+    Along the time path the multiplier varies with each cohort's own year,
+    so it is indexed at t + tt for row tt.
+
+    The multiplier scales the whole pension array, while SS_amount scales
+    only the entries from retirement on. These are equivalent only because
+    DB, NDC, and PS benefits are zero before retirement; a system that
+    pays benefits before retirement would need the SS_amount treatment.
+
+    Args:
+        pension (Numpy array): pension amount for each household
+        t (int): model period
+        j (int): index of lifetime income group, None if all groups
+        method (str): 'SS', 'TPI', or 'TPI_scalar'
+        p (OG-Core Specifications object): model parameters
+
+    Returns:
+        adjustment (array_like): multiplier on the replacement rate
+
+    """
+    adjust = p.replacement_rate_adjust
+    if method == "SS":
+        return adjust[-1, :] if j is None else adjust[-1, j]
+    if method == "TPI_scalar":
+        return adjust[0, j]
+    if pension.ndim == 1:
+        return adjust[t, j]
+    length = pension.shape[0]
+    if pension.ndim == 2:
+        return adjust[t : t + length, j].reshape(length, 1)
+    return adjust[t : t + length, :].reshape(length, 1, p.J)
+
+
 def pension_amount(r, w, n, Y, theta, t, j, shift, method, e, factor, p):
     """
     Calculate public pension benefit amounts for each household.
@@ -102,10 +141,19 @@ def pension_amount(r, w, n, Y, theta, t, j, shift, method, e, factor, p):
         pension = SS_amount(w, n, theta, t, j, shift, method, e, p)
     elif p.pension_system == "Defined Benefits":
         pension = DB_amount(w, e, n, j, p)
+        pension = pension * replacement_rate_adjustment(
+            pension, t, j, method, p
+        )
     elif p.pension_system == "Notional Defined Contribution":
         pension = NDC_amount(w, e, n, r, Y, j, p)
+        pension = pension * replacement_rate_adjustment(
+            pension, t, j, method, p
+        )
     elif p.pension_system == "Points System":
         pension = PS_amount(w, e, n, j, factor, p)
+        pension = pension * replacement_rate_adjustment(
+            pension, t, j, method, p
+        )
     else:
         raise ValueError(
             "pension_system must be one of the following: "

tests/test_pensions.py

@@ -1022,6 +1022,62 @@ def test_pension_amount_with_real_specifications(system, updates):
     assert np.all(pension[S_ret:] > 0.0)
 
 
+@pytest.mark.parametrize(
+    "system,updates",
+    [
+        ("US-Style Social Security", {}),
+        ("Defined Benefits", {"alpha_db": 0.01, "yr_contrib": 40}),
+        (
+            "Points System",
+            {"vpoint": 0.4, "points_growth_rate": "LR GDP"},
+        ),
+        (
+            "Notional Defined Contribution",
+            {
+                "tau_p": 0.1,
+                "ndc_growth_rate": "LR GDP",
+                "dir_growth_rate": "r",
+            },
+        ),
+    ],
+    ids=["SS", "DB", "PS", "NDC"],
+)
+def test_replacement_rate_adjust_applies_to_every_system(system, updates):
+    """
+    replacement_rate_adjust must scale benefits under every pension system.
+
+    It was previously read only inside SS_amount, so setting it under any
+    system other than US-Style Social Security was silently ignored.
+    """
+
+    def pension_for(adjust):
+        p = Specifications()
+        p.update_specifications(dict(updates, pension_system=system))
+        adjust_arr = np.asarray(p.replacement_rate_adjust).copy()
+        adjust_arr[:, :] = adjust
+        p.replacement_rate_adjust = adjust_arr
+        j = 0
+        return pensions.pension_amount(
+            0.05,
+            1.2,
+            0.4 * np.ones(p.S),
+            1.0,
+            0.1,
+            None,
+            j,
+            False,
+            "SS",
+            p.e[-1, :, j],
+            100000.0,
+            p,
+        )
+
+    full = pension_for(1.0)
+    halved = pension_for(0.5)
+    assert np.any(full > 0.0), "test would be vacuous with a zero benefit"
+    assert np.allclose(halved, 0.5 * full)
+
+
 @pytest.mark.local
 def test_SS_solve_defined_benefits(tmp_path):
     """
@@ -1050,6 +1106,36 @@ def test_SS_solve_defined_benefits(tmp_path):
     assert 0.0 < ss["agg_pension_outlays"] / Y < 1.0
 
 
+def test_replacement_rate_adjustment_indexes_by_cohort_year():
+    """
+    On the time path the adjustment must vary with each cohort's own year.
+
+    A single adjust[t] applied to the whole path would pass a constant-
+    adjustment test and silently flatten a glide, so this checks the
+    per-row offset directly.
+    """
+    p = Specifications()
+    j, t, length = 0, 3, 5
+    adjust = np.ones((p.T + p.S, p.J))
+    adjust[:, j] = np.arange(p.T + p.S) + 1.0
+    p.replacement_rate_adjust = adjust
+    expected = np.arange(t, t + length) + 1.0
+
+    two_d = pensions.replacement_rate_adjustment(
+        np.ones((length, p.S)), t, j, "TPI", p
+    )
+    assert np.allclose(two_d.flatten(), expected)
+
+    three_d = pensions.replacement_rate_adjustment(
+        np.ones((length, p.S, p.J)), t, None, "TPI", p
+    )
+    assert np.allclose(three_d[:, 0, j], expected)
+
+    # the steady state takes the terminal value
+    ss = pensions.replacement_rate_adjustment(np.ones(p.S), None, j, "SS", p)
+    assert np.isclose(ss, adjust[-1, j])
+
+
 @pytest.mark.local
 def test_SS_solve_notional_defined_contribution(tmp_path):
     """