GLOBAL – The Organisation for Economic Cooperation and Development says the time has come for some “frank debate” about how the how to meet the costs of ageing.
“The time has come to open a frank debate among all members of society and finally address the question of how the cost of ageing should be shared between the different groups of society,” the Paris-based group said.
It said an informed debate requires an understanding of the reform options and their likely consequences. “Reforming pensions is one of the biggest challenges of the 21st century.”
The comments come in an OECD policy brief called ‘Solving the Pensions Puzzle’ that was launched at a recent meeting of the social policy ministers of its 30 member countries.
The follow a warning from the body last month of a potential “asset meltdown” in financial markets as more people retire, having just seen more than €1trn knocked off pension assets in a year.
The brief says national pension systems are difficult to compare and that national debates are often full of “misleading claims” about other countries’ arrangements.
OECD pensions expert Monika Queisser said the new policy brief was “ just an appetiser”. She said: “In May, the OECD will launch a comprehensive report designed to monitor and compare pension systems across countries.”
The first part of the report, ‘Pensions at a Glance’, compares key features of OECD pension systems. It looks at retirement ages, benefit accrual rates, ceilings and indexation.
The second part of the volume shows pension systems and replacement rates for each of the 30 countries in detail.
The OECD uses an indicator of so-called ‘pension wealth”. Under this measure, Luxembourg has the highest wealth, at nearly treble the OECD average. The lowest pension wealth in Europe is in Ireland and the UK.