PENSIONS AT A GLANCE 2019.

224 Pages·2020·7.19 MB·English

by  OECD

Pensions at a Glance 2019
OECD AND G20 INDICATORS
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OECD Pensions at a Glance
Pensions at a Glance
2019
OECD AND G20 INDICATORS
This work is published under the responsibility of the Secretary-General of the OECD. The
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Please cite this publication as:
OECD (2019), Pensions at a Glance 2019: OECD and G20 Indicators, OECD Publishing, Paris,
https://doi.org/10.1787/b6d3dcfc-en.
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OECD Pensions at a Glance
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FOREWORD
Foreword
This eighth edition of Pensions at a Glance provides a range of indicators for comparing
pension policies and their outcomes between OECD countries. The indicators are also,
where possible, provided for the other major economies that are members of the G20. Three
special chapters provide a deeper analysis of recent pension reforms (Chapter 1) and
pension systems within OECD countries for individuals in non-standard forms of work
(Chapters 2 and 3).
This report was prepared under the general supervision of Gabriela Ramos, OECD Chief
of Staff and Sherpa to the G20. It is the joint work of staff in both the Pensions Team of the
Social Policy Division of the OECD Directorate for Employment, Labour and Social Affairs
and of the Insurance, Private Pensions and Financial Markets Division of the OECD
Directorate for Financial and Enterprise Affairs. National officials – particularly delegates to
the OECD Working Party on Social Policy and members of the OECD pension expert group –
provided invaluable input to the report.
Chapter 1 on “Recent pension reforms” was written by Boele Bonthuis and Tomoko
Onoda. Chapter 2 entitled “Non-standard forms of work and pensions” was written by
Maciej Lis, Marius Lüske and Tomoko Onoda. Chapter 3 entitled “Are funded pensions well
designed to adapt to non-standard forms of work?” was written by Stéphanie Payet and
Pablo Antolin thanks to the financial support of the European Commission and Principal
International Group. Chapters 4 to 8 were written and the indicators therein computed by
Christian Geppert and Andrew Reilly, while Chapter 9 was written by Romain Despalins,
Stéphanie Payet and Pablo Antolin, who also computed the related indicators. Hervé
Boulhol led the team and was responsible for revising and enhancing these chapters.
Maxime Ladaique provided extensive support for tables and figures. Lauren Thwaites
prepared the manuscript for publication. Fatima Perez provided technical assistance.
We are grateful to many national officials including ELSAC Delegates and to colleagues
in the OECD Secretariat for their useful comments, notably Andrea Garnero, Herwig
Immervoll, Marguerita Lane, Horacio Levy, Mark Pearson, Monika Queisser and Stefano
Scarpetta (ELS), Anna Milanez (CTP) and Stéphanie Payet (DAF). The OECD gratefully
acknowledges the financial support from the European Union, which co-financed this
project with the OECD.
PENSIONS AT A GLANCE 2019 © OECD 2019 3

TABLE OF CONTENTS
Table of contents
Editorial – Pensions for non-standard workers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Executive summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Chapter 1. Recent pension reforms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Population ageing: demographic trends, income and employment. . . . . . . . . . . . . . . . 18
Pension reforms over the last two years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Long-term trends in pension reforms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Annex 1.A. Pension reforms decided between September 2017 and September 2019. 48
Chapter 2. Non-standard forms of work and pensions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Trends and characteristics of non-standard work. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Why does non-standard work raise pension issues?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Pension rules for non-standard forms of work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Improving pension provision for non-standard workers . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Chapter 3. Are funded pensions well designed to adapt to non-standard forms of
work?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Formal and effective access to funded pensions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Contribution levels. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
Pension income outcomes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Chapter 4. Design of Pension Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Architecture of national pension systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Basic, targeted and minimum pensions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Mandatory earnings-related pensions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Current retirement ages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
Future retirement ages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
Chapter 5. Pension Entitlements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Methodology and assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
Gross pension replacement rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
Gross pension replacement rates for different entry age. . . . . . . . . . . . . . . . . . . . . . . . . . . 148
Gross replacement rates: Public vs Private, Mandatory vs Voluntary schemes. . . . . . 150
Tax treatment of pensions and pensioners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
Net pension replacement rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
PENSIONS AT A GLANCE 2019 © OECD 2019 5
TABLE OF CONTENTS
Net pension replacement rates: Mandatory and Voluntary schemes. . . . . . . . . . . . . . . 156
Gross pension wealth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
Net pension wealth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
Gross pension entitlements for couples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
Impact of childcare breaks on pension entitlements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
Impact of unemployment breaks on pension entitlements. . . . . . . . . . . . . . . . . . . . . . . . 166
Chapter 6. Demographic and Economic Context. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
Fertility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
Life expectancy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
Demographic Old-Age to Working-Age Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
Employment rates of older workers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
Effective age of labour market exit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
Expected life years after labour market exit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
Chapter 7. Incomes and poverty of older people. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183
Incomes of older People. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
Old-age income poverty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Old-age income inequality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
Average wage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
Chapter 8. Finances of retirement-income systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
Mandatory pension contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
Public expenditure on pensions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198
Private expenditure on pensions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
Long-term projections of public pension expenditure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202
Chapter 9. Funded pensions and public pension reserve funds. . . . . . . . . . . . . . . . . . . . . . . . 205
Coverage of funded and private pension plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
Contributions paid into funded and private pension plans. . . . . . . . . . . . . . . . . . . . . . . . 208
Assets in funded and private pension plans, and public pension reserve funds. . . . 210
Allocation of assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212
Investment performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
Structure of funded and private pension systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216
Fees charged to members of defined contribution plans. . . . . . . . . . . . . . . . . . . . . . . . . . . 218
Funding ratios of defined benefit plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220
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