The challenges we face to provide our ageing societies with a financially secure retirement are well-known. Advances in healthcare, diet and nutrition have increased life expectancy around the world. According to the World Health Organization, global life expectancy rose by five years between 2000 and 2015, the fastest increase since the 1960s. This should be celebrated, but we should also consider the implications for the financial systems that have been designed to meet our retirement needs, which in many countries are already under severe strain.
Besides increasing life expectancies and lower birth rates, additional factors are increasing the strain on global retirement systems, such as lack of easy access to pensions, inadequate savings rates, long-term low growth environment and low levels of financial literacy.
This paper addresses the challenges facing retirement systems, including the impact of ageing societies, and quantifies the size of the savings shortfall. It provides recommendations for system design and actions for policy-makers to ensure we can adjust to societies in which living to 100 is commonplace and affordable for all. The paper is accompanied by the Case Studies in Retirement System Reform which presents 12 examples of pension reform from governments, pension funds and companies around the world.
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Life expectancy is going up around the world. While this should be celebrated, it also places enormous strain on our pension systems. What's the solution?