국가전략정보포털

Title page

Contents

Foreword 4

Editorial 5

Executive summary 11

1. Recent pension reforms 14

Introduction 15

Population ageing: COVID-19 and life expectancy 18

Still increasing employment of older ages throughout COVID-19 25

Pensioners' income security and inflation 28

Recent pension reforms 40

References 57

Annex 1.A. Recent pension reform overview 62

Notes 87

2. Pension provisions for workers in hazardous or arduous jobs 93

Introduction 94

Key findings and policy implications 94

Why special pension rules for hazardous or arduous jobs? 97

Scope and causes of occupational differences in health and mortality 100

Pension provisions for workers in hazardous or arduous jobs in OECD countries 103

Reform trends 112

How labour market and other social policies address work-related risks 115

Policy implications 118

References 123

Notes 129

3. Design of pension systems 131

Architecture of national pension systems 132

Basic, targeted and minimum contributory pensions 134

Eligibility and indexation for first-tier benefits 136

Mandatory earnings-related pensions 138

Current retirement ages 140

Future retirement ages 142

4. Pension entitlements for the base case 145

Methodology and assumptions 146

Gross pension replacement rates 148

Gross replacement rates: Public vs. Private, Mandatory vs. Voluntary schemes 150

Tax treatment of pensions and pensioners 152

Net pension replacement rates 154

Net pension replacement rates: Mandatory and voluntary schemes 156

Gross pension wealth 158

Net pension wealth 160

5. Pension entitlements for alternative scenarios 162

Gross pension entitlements for couples 163

Impact of unemployment breaks on pension entitlements 165

Impact of childcare breaks on pension entitlements 167

Impact of different earnings profile on pension entitlements 169

Sensitivity of replacement rates to changes in the economic assumptions 171

Theoretical relative pensions of the self-employed 173

6. Demographic and economic context 175

Fertility 176

Life expectancy 178

Demographic old-age to working-age ratio 180

Employment rates of older workers and gender gaps 182

Changes in employment rates of older workers 184

Effective age of labour market exit 186

Expected life years after labour market exit 188

7. Incomes and poverty of older people 190

Incomes of older people 191

Old-age income poverty 193

Old-age income inequality 197

Average wage 199

8. Finances of retirement-income systems 201

Mandatory pension contributions 202

Public expenditure on pensions 204

Private expenditure on pensions 206

Long-term projections of public pension expenditure 208

9. Asset-backed pension systems 210

Participation in pension plans 211

Contributions paid into pension plans 213

Assets earmarked for retirement 215

Allocation of assets 217

Investment performance 219

Landscape of pension plans 221

Fees charged to members of defined contribution plans 223

Funding ratios of defined benefit plans 225

Table 1.1. Overview of OECD countries by way of indexing pensions in payment 31

Table 1.2. Several countries have deviated from their pension indexation rules 37

Table 2.1. Occupational scope of pension provisions for hazardous or arduous jobs in OECD countries 106

Table 3.1. Structure of retirement-income provision through mandatory schemes 133

Table 3.2. Current level and recipients of first-tier benefits 135

Table 3.3. Indexation of first-tier benefits 137

Table 3.4. Future parameters and rules of mandatory earnings-related pensions, latest legislation 139

Table 3.5. Current early and normal retirement ages by type of pension scheme 141

Table 3.6. Future ages, penalties and bonuses for early, normal and late retirement by type of pension scheme 144

Table 4.1. Gross pension replacement rates by earnings, in percentage, mandatory schemes 149

Table 4.2. Gross pension replacement rates from mandatory public, mandatory private and voluntary private pension schemes, in percentage 151

Table 4.3. Treatment of pensions and pensioners under personal income tax and mandatory public and private contributions 153

Table 4.4. Net pension replacement rates by earnings, in percentage 155

Table 4.5. Gross and net pension replacement rates from mandatory (public and private) and voluntary pension schemes, in percentage 157

Table 4.6. Gross pension wealth by earnings, multiple of annual earnings 159

Table 4.7. Net pension wealth by earnings 161

Table 5.1. Gross pension entitlements by earnings: singles versus couples, percentage of average earnings 164

Table 5.2. Gross and net pension benefit level by earnings profile 170

Table 5.3. Annual economic assumptions 171

Table 5.4. Gross pension replacement rates by different economic assumptions 172

Table 5.5. Contributions requirements to mandatory and quasi-mandatory pensions for the self-employed 174

Table 6.1. Total fertility rates, 1962-2062 177

Table 6.2. Demographic old-age to working-age ratio: Historical and projected values, 1952-2082 181

Table 7.1. Incomes of older people, 2020 or latest available year 192

Table 7.2. Income poverty rates by age and gender, 2020 or latest available year 194

Table 7.3. Change in relative income poverty rates between 2000 and 2020 by age 196

Table 7.4. Income inequality by age: older vs. total population, 2020 or latest available year 198

Table 7.5. Gross average wage (AW), 2022 200

Table 8.1. Contribution rates for an average worker in 2022 203

Table 8.2. Public expenditure on old-age and survivor benefits 205

Table 8.3. Private pension-benefit expenditures 207

Table 8.4. Projections of public expenditure on pensions, 2020-60, percentage of GDP 209

Table 9.1. Participation rate in pension plans in the OECD and selected other jurisdictions, latest year available 212

Table 9.2. Assets earmarked for retirement in OECD countries and selected other major economies, at the end of 2022 or latest year available 216

Table 9.3. Nominal and real geometric average annual investment rates of return of pension plans in 2022 and over the last 5, 10, 15 and 20 years, in percent 220

Table 9.4. Nominal and real geometric average annual investment rates of return of selected public pension reserve funds in 2022 and over the last 5, 10, 15... 220

Table 9.5. Types of pension plans available in the OECD area and selected other major economies according to the OECD taxonomy, 2022 222

Table 9.6. Fee structure in selected OECD and other major economies 224

Table 9.7. Annual fees charged to members of defined contribution plans by type of fees, 2022 224

Figure 1.1. Projected remaining life expectancy at 65 for the period 2050-55 19

Figure 1.2. Life expectancy gains have been smaller over the last decade 19

Figure 1.3. No international trend in the evolution of the educational gap in life expectancy 21

Figure 1.4. WHO estimates higher healthy life expectancy than Eurostat 23

Figure 1.5. WHO show more stable growth in healthy life expectancy over time than Eurostat 24

Figure 1.6. Employment rates for older adults lag behind those of prime-age individuals 26

Figure 1.7. Most OECD countries have resumed the pre-COVID trend of growing employment at older ages 27

Figure 1.8. Average time in retirement from the labour market increased substantially since 1975 28

Figure 1.9. Different types of pension indexation and their impact 35

Figure 1.10. Pensions were lower in real terms in many countries in January 2023 compared to January 2022 39

Figure 1.11. The normal retirement age will be rising in more than half of OECD countries 42

Figure 1.12. Only six OECD countries maintain gender gaps in future normal retirement ages 43

Figure 1.13. Only a few countries do not take the whole career into account for the reference wage 47

Figure 1.14. Older people on average have lower incomes than other age groups 49

Figure 1.15. Older people are more likely to be in relative income poverty than other age groups 50

Figure 1.16. Net pension replacement rates for average and low earners 53

Figure 2.1. Coverage of pension provisions for hazardous or arduous jobs among workers, new retirees and retirees 107

Figure 2.2. Pension provisions of hazardous or arduous jobs effectively cover mainly men 108

Figure 2.3. Pension provisions for hazardous or arduous work reduce the minimum pensionable age by more than 5 years in some countries 109

Figure 2.4. Workers in hazardous or arduous jobs effectively claim pensions earlier 110

Figure 3.1. Taxonomy: Different types of retirement-income provision 133

Figure 3.2. Non-contributory first-tier benefits 135

Figure 3.3. Contributory first-tier benefits 135

Figure 3.4. Number of years required for partial and full contribution-based basic pensions 137

Figure 3.5. Number of years required for partial and full minimum contributory pensions 137

Figure 3.6. Difference in the normal retirement age by gender and for earlier career start 141

Figure 3.7. Gender gap in current and future normal retirement ages 142

Figure 3.8. Current and future normal retirement ages for a man with a full career from age 22 143

Figure 3.9. Current and future early retirement ages for a man with a full career from age 22 143

Figure 4.1. Gross pension replacement rates in percentage: Average earners at retirement age and age 80 149

Figure 4.2. Gross pension replacement rates in percentage: Low and high earners 149

Figure 4.3. Personal income taxes and social security contributions paid by pensioners and workers, percentage of income 153

Figure 4.4. Net and gross pension replacement rates: Average earners, in percentage 155

Figure 4.5. Net pension replacement rates: Low and high earners, in percentage 155

Figure 4.6. Gross pension wealth for lower earners by gender, multiple of annual earnings 159

Figure 4.7. Gross pension wealth for average earners by gender, multiple of annual earnings 159

Figure 4.8. Net pension wealth for lower earners by gender, multiple of annual earnings 161

Figure 4.9. Net pension wealth for average earners by gender, multiple of annual earnings 161

Figure 5.1. Gross pension entitlements of low and average earners with a 5-year unemployment break versus worker with a full career 166

Figure 5.2. Gross pension entitlements of low and average earners with a 10-year unemployment break after entering the labour market 5 years later 166

Figure 5.3. Gross pension entitlements of low and average earners with a 5-year childcare break versus women with two children with an uninterrupted career 168

Figure 5.4. Gross pension entitlements of low and average earners with a 10-year childcare break versus women with two children with an uninterrupted career 168

Figure 5.5. Earnings profile compared to base case, retirement at age 66 170

Figure 5.6. Theoretical relative pensions of the self-employed as a percentage of those of employees 174

Figure 6.1. Uncertainty about total fertility-rate projections 177

Figure 6.2. Current life expectancy at age 65 for men and women, in years, 2022 179

Figure 6.3. Projected remaining life expectancy at age 65, 2065, in years 179

Figure 6.4. Structural breaks in life-expectancy gains 179

Figure 6.5. The working-age population will decline in a large number of OECD countries 181

Figure 6.6. Future demographic old-age to working-age ratio projections differ based on data sources 181

Figure 6.7. Employment rates of workers aged 55-59, 60-64 and 65-69 in 2022 183

Figure 6.8. Gender gap in employment rates by age group, 2022 183

Figure 6.9. Gender gap in pensions in selected OECD countries, latest year available 183

Figure 6.10. Employment rate at ages 60-64 vs. normal retirement age in 2022 185

Figure 6.11. Change in employment rates of older workers and prime-age workers, 2002-22 185

Figure 6.12. Growth of employment rates of older workers by education level 185

Figure 6.13. Average effective age of labour market exit and normal retirement age in 2022 187

Figure 6.14. Average effective age of labour market exit in OECD countries, 1972-2022 187

Figure 6.15. Remaining life expectancy at average labour market exit age, by gender in 2022 189

Figure 6.16. Expected life years after labour market exit, OECD average 1972-2022 189

Figure 7.1. Income sources of older people, 2020 or latest available year 192

Figure 7.2. Income poverty rates by age: older vs. total population, 2020 or latest available year 194

Figure 7.3. Income poverty depth by age: older vs. total population, 2020 or latest available year 196

Figure 7.4. Change in income inequality over time among the older and the total population 198

Figure 7.5. Change in average wage, national currency 200

Figure 8.1. Private expenditure as a percentage of public and private 207

Figure 8.2. Percentage point change in pension expenditure between 2020-22 and 2050 209

Figure 9.1. Minimum or mandatory contribution rates (for an average earner) in mandatory and auto-enrolment plans (unless specified otherwise), 2022... 214

Figure 9.2. Average annual contribution per active account or member in selected OECD countries, latest year available 214

Figure 9.3. Allocation of assets in pension plans in selected asset classes and investment vehicles, at the end of 2022 or latest year available 218

Figure 9.4. Allocation of assets in selected public pension reserve funds in selected asset classes and investment vehicles, at the end of 2022 218

Figure 9.5. Split of pension assets by type of plan, at the end of 2022 or latest year available 222

Figure 9.6. Assets and liabilities of defined benefit plans (in billions of national currency) and their ratio (in percent) in selected jurisdictions, 2012-22 226

Infographics

Infographic 1. Key facts and figures 13

Annex Tables

Annex Table 1.A.1. Pension reform decided between September 2021 and September 2023 63