OECD publishes report on pension reforms and challenges

The new OECD report Pensions at a Glance 2013 looks at recent reforms in pension systems in the G20 countries which are all facing challenges to balance sustainability of pension systems and the adequacy of retirement incomes. According to the report, the financial crisis has had an impact on pensions with most reforms addressing the issue by raising the retirement age. The report points out that by 2050 OECD countries will have set a retirement age of at least 67 years for both women and men.

Income in old age

According to the report, current pensioners have high incomes (86%) relative to the whole population in OECD countries. However, income in old age comes from different sources and is dependent on labour market participation, economic and individual circumstances. Unemployed, sick or disabled people will have difficulties to build up adequate income for old age. In countries where youth unemployment is high, many families depend on pensions. Therefore, social and labour market policies and a general debate about support throughout the lifetime should go together along with pension reforms.

Access to services

Access to public services, such as health care, education and social housing, also affects older peoples’ wellbeing. Long-term care is very important as care costs for people with high care needs may go above 60% of the disposable income for all but the wealthiest one-fifth of the elderly. Public support plays an increasingly important role in preventing poverty in old age amongst people requiring health and long-term care services. Moreover, older people benefit more from public services than the working-age population: about 40% of older people’s extended income is made up of in-kind public services, compared to 24% for the working-age population.

Read the entire report and access the country-comparison tool on the OECD website.