This paper illustrates that the equity–efficiency trade-off between a redistributive, Beveridgean, pension system, and an earnings-based, Bismarckian, scheme, can collapse when accounting for labor supply effects on the extensive margins. I introduce a general equilibrium overlapping generations model with endogenous savings, human capital formation and labor supply. The model is calibrated to an average OECD economy. The results suggest that allocating funds towards a Bismarckian pension system always reduces earnings inequality, and in some cases lifetime inequality, when compared to a Beveridgean scheme. However, the Bismarckian scheme crowds out more human capital in the economy following a higher steady state interest rate.