PENSIONS
Is a sustainable pension system in place which prevents poverty while maintaining intergenerational equity?
Pension policy scores are weighted composites. A qualitative policy assessment [ 
] contributes one-half of this weighting, with three quantitative measures [ 
] each contributing an additional one-sixth.
Scores and methodology
] contributes one-half of this weighting, with three quantitative measures [ ] each contributing an additional one-sixth. Scores and methodology
PensionsKey findings: Pension policy
Each 
represents an individual country and is positioned on a scale from 1 (lowest) to 10 (best). Position cursor over to see scores for individual countries.
Click country name in list or text for details.
represents an individual country and is positioned on a scale from 1 (lowest) to 10 (best). Position cursor over to see scores for individual countries.Click country name in list or text for details.
Score distribution
8.8
1
8.6
2
8.5
3
8.5
7.9
5
7.7
6
7.6
7
7.5
8
7.3
9
Though demographic problems loom across the OECD, pension systems in this group tend to shield retirees from poverty, and are either sustainable or undergoing structural reform.
New Zealand, Canada and the Netherlands are particularly strong in preventing old-age poverty
Pension systems in Canada and Norway are amply funded into the foreseeable future. Many countries (Slovakia, New Zealand, Finland, Denmark, Sweden, Norway) have reformed or are reforming systems to improve sustainability or incentives to work.
Slovakia, Canada, the Netherlands and Luxembourg offer three-pillar mixes of public and private pensions. New Zealand's system is tax-based, while Iceland's is a mix of taxes and contributions.
Aging populations are problems in Luxembourg, Finland and Denmark.
New Zealand, Canada and the Netherlands are particularly strong in preventing old-age poverty
Pension systems in Canada and Norway are amply funded into the foreseeable future. Many countries (Slovakia, New Zealand, Finland, Denmark, Sweden, Norway) have reformed or are reforming systems to improve sustainability or incentives to work.
Slovakia, Canada, the Netherlands and Luxembourg offer three-pillar mixes of public and private pensions. New Zealand's system is tax-based, while Iceland's is a mix of taxes and contributions.
Aging populations are problems in Luxembourg, Finland and Denmark.
7.1
10
7.1
7.0
12
7.0
6.7
14
6.5
15
6.3
16
6.0
17
5.9
18
5.8
19
Countries in this typically protect most retirees from poverty, but serious issues of sustainability and intergenerational equity often remain.
The share of retirees living in poverty is a concern in a number of countries (Ireland, Poland, South Korea, UK, Australia).
Sustainability issues, usually tied to demographic change, are serious in Switzerland, Austria, South Korea, Belgium, and Poland. Recent Australian reforms have addressed long-term funding, while the Czech Republic and Austria have raised retirement ages.
Many countries have three-pillar, mixed public-private systems (Ireland, Switzerland, Poland, Austria, Belgium, UK). Private plans do not fill the gaps left by low UK state pensions.
State pensions dominate in the two-pillar Czech system.
The share of retirees living in poverty is a concern in a number of countries (Ireland, Poland, South Korea, UK, Australia).
Sustainability issues, usually tied to demographic change, are serious in Switzerland, Austria, South Korea, Belgium, and Poland. Recent Australian reforms have addressed long-term funding, while the Czech Republic and Austria have raised retirement ages.
Many countries have three-pillar, mixed public-private systems (Ireland, Switzerland, Poland, Austria, Belgium, UK). Private plans do not fill the gaps left by low UK state pensions.
State pensions dominate in the two-pillar Czech system.
5.6
20
5.5
21
5.5
5.5
5.4
24
5.1
25
4.1
26
4.0
27
4.0
3.0
29
1.6
30
In this group, retiree poverty often remains a significant concern. Long-term sustainability or intergenerational equity, or both, are often persistent problems.
A number of countries (U.S., Turkey, Spain, Italy, Greece) have significant shares of retirees living in poverty.
Sustainability issues, often tied to demographic change, are frequent problems (U.S., Hungary, Turkey, France, Japan, Spain, Portugal, Greece), and are particularly severe in Japan, Portugal and Greece. Mexico will face demographic stresses in the future.
Japan, Spain and Italy suffer from inequity between generations. Mexico's large informal sector undermines universal pension coverage.
Reforms, focusing on sustainability or incentive structures, were recently implemented in Germany, Hungary, Mexico, Turkey and Portugal. Greece's reforms have been minor.
A number of countries (U.S., Turkey, Spain, Italy, Greece) have significant shares of retirees living in poverty.
Sustainability issues, often tied to demographic change, are frequent problems (U.S., Hungary, Turkey, France, Japan, Spain, Portugal, Greece), and are particularly severe in Japan, Portugal and Greece. Mexico will face demographic stresses in the future.
Japan, Spain and Italy suffer from inequity between generations. Mexico's large informal sector undermines universal pension coverage.
Reforms, focusing on sustainability or incentive structures, were recently implemented in Germany, Hungary, Mexico, Turkey and Portugal. Greece's reforms have been minor.
Rationale
Demographic change poses challenges to all pension systems, as reformers balance different mixes of public and private plans.
An optimal pension system should prevent poverty among the elderly, and should be based on distributional principles that do not erode the system's fiscal sustainability. It should also ensure equity between pensioners, the active labor force and the succeeding generation.
These objectives may be achieved by different systems: exclusively public pension systems, a mixture of public and private plans, or publicly subsidized private pension plans. Accumulating public and private implicit pension debt is undesirable.
Demographic change is the most severe challenge facing pension policies across the OECD.
Performance comparison
Use drop-down menus for selections. In all cases, higher scores reflect better performance.
