We’ll live to 100. Can we afford it? This is how stakeholders worldwide are working to save for the future.
16 Dec 2019
The size and scope of the global pension problem is overwhelming communities around the world. Increases in longevity have put retirement systems under significant strain. The global gap between retirement savings and retirement income needs is projected to reach $400 trillion in three decades – more than five times the size of the global economy.
Through a combination of research and original analysis, working with global stakeholders and collecting best practices from around the world, the World Economic Forum is helping to tackle the pension crisis.
Over several years, the issue of pension plan sustainability has remained at the forefront of government considerations, with an increasing number of countries looking to address the issues.
In addition to releasing reports, the Forum has conducted workshops to support pension reform in the United States and Chile. By bringing together policy-makers, financial investors and experts from across the globe, the Forum has helped countries share knowledge and best practices on how to solve the crisis.
What's the challenge?
The growing global gap between retirement savings and income is being primarily driven by three factors: 1) rapidly ageing populations due to demographic trends; 2) increasing percentages of informal sector workers as industries are disrupted; and 3) a growing middle class throughout the world, with a corresponding increase in expectations for retirement income.
To close this gap, the problem will need to be addressed collaboratively by three major stakeholders: governments, employers and individuals.
The World Economic Forum, in collaboration with Mercer, has created a global community to address the pension crisis from both a policy and an investment perspective.
Together with experts, the community has conducted a series of interviews and analyses, culminating in a series of insightful reports that have drawn global attention to the issue.
The Forum's first report in the series, titled We’ll Live to 100 – How Can We Afford it?, was published in May 2017 and examined the world’s six largest pension systems (Australia, Canada, Japan, the Netherlands, the United Kingdom and the United States) as well as the two largest countries by population (India and China). The report calculated that the global pension gap is projected to grow to $400 trillion in the next 30 years.
A follow-up report in June 2018 outlined actionable solutions for addressing this gap and shared best practices from countries with the most robust pension systems.
In addition to these three reports, the Forum has facilitated workshops bringing together a variety of stakeholders to share best practices for rolling out pension reforms in the US and to provide feedback and insights on the Government of Chile’s pension reform proposals, for example.
How can you get involved?
Led by the Forum’s Platform for Shaping the Future of Investing, this initiative brings together decision-makers from the public and private sectors to build a more secure retirement future for everyone. Through Forum-facilitated workshops, meetings and webinars, partner companies involved in the initiative are given the opportunity to gain insights into the global pension crisis, shape solutions for addressing it and apply lessons and best practices to their own employee retirement plans.
Current partners of the initiative include BlackRock, Bridgewater Associates, Department of Finance of Canada, JPMorgan Chase Bank, Mercer, Ministry of Finance of Chile, Office of the Prime Minister of Singapore, PensionDanmark and the Washington State Investment Board.
Is your organization interested in joining our global community of experts and government and business leaders to collaborate on finding solutions to the pension crisis? Reach out to us via one of the options below.
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