OECD Pensions Outlook 2018
Published in December 2018, the OECD Pensions Outlook 2018 report examines how national pension systems are adapting to improve retirement outcomes. This has direct implications for the design and implementation of occupational pension plans.
The report focuses on funded pensions and discusses how different pension tools can be combined to meet certain goals. It also considers how countries can improve financial, i.e. tax, incentives.
This edition draws lessons from initiatives on strengthening the governance, investment policies and risk management of pension funds. It suggests guidelines on improving retirement incomes considering behavioral biases and limited levels of financial knowledge, and discusses the implications of mortality differences across different socioeconomic groups. Lastly, it examines whether survivor pensions are still needed.
And at only 256 pages, it makes for a good, quick read for the upcoming holidays; the digital versions are both cheaper and easier to carry around than the $60 paperback. The OECD Pensions Outlook 2018 webpage is accessible here.
According to the introduction to the report, people’s trust in the sustainability of pension systems is low. They also doubt that those institutions managing their funded pension arrangements always act in their best interests.
This is in spite of pension policy reforms across OECD countries in recent decades that have made pension systems more robust today.
More Changes Required
Moving forward, to ensure higher retirement income, people need to increase savings, contributions, and/or the length of the contribution period, all the more as improvements in mortality and life expectancy inevitably lead to ever-longer periods in retirement.
Governments also must find ways to integrate workers in non-standard forms of work; pension reforms need to be better communicated and people need a better understanding of what they can do to secure their retirement incomes. These key steps are required to restore trust in pension systems.
Ref. OECD (2018), OECD Pensions Outlook 2018, OECD Publishing, Paris, https://doi.org/10.1787/pens_outlook-2018-en.