Apologies for cross-posting:
For further information: selection of indicators, media and country specific
media briefings: see www.oecd.org/els/social/ageing/PAG
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From www.oecd.org/els 07/06/2007 >>
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People in OECD countries will have to save more for their retirement as a
result of the major pensions reforms carried out in recent years, according
to a new OECD report. The average pension promise in 16 OECD countries
studied was cut by 22%. For women, the reduction was 25%.
Pensions at a Glance 2007 notes that in only two countries, Hungary and the
United Kingdom, did pension promises increase on average. In France, Germany,
Italy, Japan and Sweden, future benefits will be cut by between 15 and 25%
and in Mexico and Portugal by over 30% from what people would have been
entitled to before the reforms.
The impact on workers varies widely across the OECD. Several countries moved
towards greater targeting of benefits on poorer pensioners, notably Mexico,
Portugal and the United Kingdom. Austria, France, Germany and Sweden also
protected low earners.
Reforms have worked in the opposite direction in other countries. Poland and
the Slovak Republic, for example, have tightened the link between pension
entitlements and earnings when working, without putting in place any new
social safety nets for low earners. This may increase the poverty risk for
retirees who have not been covered by the system over their full career, the
report finds.
The most common feature of the reform packages is a change in pension age.
When reforms are complete, most OECD countries will have a standard
retirement age of 65 years, although in Denmark, Germany, Iceland, Norway,
the United Kingdom and the United States, the pension age is or will be 67.
Only France, Hungary and the Czech and Slovak Republic plan to have pension
ages below 65.
But although pensions reforms in the OECD as a whole were substantial and
necessary to ensure the financial sustainability of pensions systems for
current and future retirees, more remains to be done.
Some countries, for example, are phasing in pension reforms too slowly,
notably Austria, Italy, Mexico and Turkey. In Turkey, for example, the new
retirement age of 65 will only be reached in 2043 for men and even later for
women. This will mean spending on pensions will remain high for many decades
and these financial pressures might require short-term adjustments that may
cause more hardship than faster reforms would have done.
Early retirement is also still a problem in many countries, adding extra
pressure to public finances. Between 1999 and 2004, for example, the average
retirement age for men was below 60 in eight OECD countries, including
Belgium, France, Hungary and Italy.
Pensions at a Glance 2007 provides indicators for comparing pension policies
across OECD countries and includes a chapter on the role of private pensions
in providing future retirement incomes.
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Peter Whiteford
Principal Administrator (Welfare Reform)
Social Policy Division
Directorate of Employment, Labour and Social Affairs
OECD
Phone: 33 (0)1 45 24 90 41
Fax: 33 (0)1 45 24 90 98
OECD Social Policy Division via www.oecd.org/els/social
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