OECD 2019 Pensions Report: urgent reform of systems needed
Published in November 2019, the OECD’s Pensions at a Glance 2019 report advises governments to urgently reform their pension systems to allow for the one-third of employees who are now in non-standard employment (self-employed, temporary or part-time employment) to have adequate retirement income.
With women being three times more likely to be in part-time work, and the older workforce more likely to be self-employed, it has become a necessity: non-standard workers earning less and contributing less to earnings-related and occupational pensions end up with around 80% of the pension benefit that dependent employees.
“Governments need to quickly put in place more inclusive and harmonized pensions for all,” said OECD Secretary-General Angel Gurría. “Reforming pension policies in OECD countries to reduce gaps between standard and non-standard workers in terms of coverage, contributions and entitlements is essential.”
Harmonizing pensions is becoming a necessity and workers should not be discriminated, especially when it comes to transfer of pension rights and assets when changing employment.
Population Ageing and Pensions
Ageing is expected to increase dramatically in OECD countries, especially in Greece, Korea, Poland, Portugal, the Slovak Republic, Slovenia and Spain, while Japan and Italy where the oldest populations within the OECD are expected to reside by 2050 with 31% being retirement age or older.
Key findings of the report include:
- Those over 65 currently receive approximately 75% of the economy-wide average disposable income in Estonia and Korea against the OECD average of 87%;
- The average relative poverty rate across the OECD is 11.8% against a non-OECD average of 13.5%;
- Elderly poverty rates are highest (above 20%) in Australia, Estonia, Korea, Latvia, Lithuania, Mexico and the United States, while this figure is 4% in Denmark, France, Iceland and the Netherlands;
- Retirement ages also vary Turkey 51 while in Italy, Iceland, and Norway it was 67.
The full report is available here.