OECD Pensions at a Glance

1999-1363 (online)
1995-4026 (print)
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OECD’s biennial report on pension systems across OECD countries. Each edition opens with an overview comparing pension policies of OECD countries and the role of reforms and private pensions. This is followed by a series of country reports analyzing the situation in each OECD country.

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Pensions at a Glance 2015

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Pensions at a Glance 2015

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01 Dec 2015
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The 10-year anniversary edition of Pensions at a Glance highlights the pension reforms undertaken by OECD and G20 countries over the last two years. Two special chapters provide deeper analysis of first-tier pension schemes and of the impact of short or interrupted careers, due to late entry into employment, childcare or unemployment, on pension entitlements. Another chapter analyses the sensitivity of long-term pension replacement rates on various parameters. A range of indicators for comparing pension policies and their outcomes between OECD and G20 countries is also provided.

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  • Foreword

    This sixth edition of Pensions at a Glance provides a range of indicators for comparing pension policies and their outcomes between OECD countries. The indicators are also, where possible, provided for the other major economies that are members of the G20. Four special chapters () provide deeper analysis of recent pension reforms, the role of first-tier pensions, the impact of short and interrupted careers and the sensitivity of future replacement rates to parametric changes.

  • Editorial – The next frontier for pension policy: Focusing more on social sustainability

    This sixth edition of Pensions at a Glance marks the tenth anniversary of the OECD’s flagship series on pension systems and retirement incomes. Ten years of scrutiny of member and G20 countries’ pension systems and policies, ten years of assessing and predicting workers’ pension entitlements, and ten years of recommending reforms that lead to more financially sustainable pay-as-you-go pensions and also respond to citizens’ need for stable and adequate incomes in old age.

  • Executive summary

    This edition of Pensions at a Glance reviews and analyses the pension measures enacted or legislated in OECD countries between September 2013 and September 2015. It provides an in-depth review of the first layer of protection of the elderly, first-tier pensions, across countries and assesses the impact of short careers on pension entitlements. This edition analyses also the sensitivity of future replacement rates to parametric changes. As in past editions, a comprehensive selection of pension policy indicators is included as well as profiles of the pension systems for all OECD and G20 countries.

  • Recent pension reforms

    This chapter sets out the most important elements of pension reform in the 34 OECD countries between September 2013 and September 2015. It updates and extends the analysis from the 2013 edition of OECD Pensions at a Glance which examined pension reforms from January 2009 to September 2013. The time period analysed here has been characterised by sluggish economic growth and increasing government debt. Countries have responded by measures aimed at limiting public pension expenditure while also addressing adequacy concerns in rapidly ageing societies.

  • The role of first-tier pensions

    This chapter examines the role of first-tier benefits within OECD and G20 countries. It concentrates on the three main components of first-tier pensions: basic, minimum and means-tested old-age social assistance payments. The structure of the first-tier pension systems including eligibility rules are first detailed. Then the level of the benefits as a proportion of average earnings is compared across OECD countries and studied in relation to old-age poverty rates. The chapter also highlights the other forms of assistance that are available for retirees including rent or health. This chapter analyses the implications of indexation policies for first-tier benefits levels and for public spending, given population ageing, depending on how age thresholds on first-tier pensions are adjusted.

  • How incomplete careers affect pension entitlements

    This chapter assesses the impact of shorter, more fragmented careers on the pension entitlements from mandatory schemes taking into account all pension components including pension credits and other redistributive mechanisms in pension systems. The analysis focuses on delayed labour market entry and career interruptions related to childcare and unemployment.The analysis shows that with slightly more than a 1% drop in old-age pension for every year without a job on average, pension systems play a key role in offsetting the potential losses in retirement income due to delayed or interrupted employment. In the absence of any redistribution, the pension would fall by 2‑2.5% based on the economic assumptions used in the OECD model. Pension credits and other redistributive components of pension systems while not being able to fully offset the contribution gaps related to delayed or interrupted employment, are therefore effective instrument to boost earnings-related pensions. The effects vary widely across countries and depend on the periods covered, the pensionable earnings used during these periods, and the provision of other redistributive tools in pension systems.The results also highlight that pension systems are not typically designed to offset all kinds of income shocks which affect individual life courses. The increasing diversity of work paths requires a more comprehensive and integrated approach to the challenges faced by individuals through effective labour market, education, family and pension policies.

  • Sensitivity of replacement rates to the model parameters

    This chapter examines how changes made to each economic parameter affect the theoretical replacement rate estimations. The analysis also compares the new baseline economic assumptions to those used in previous editions of the publication before finally contrasting these new results with country-specific assumptions based on the level of economic development.

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  • Expand / Collapse Hide / Show all Abstracts Design of pension systems

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    • Architecture of national pension systems

      Retirement-income regimes are diverse and often involve a number of different programmes. Classifying pension systems and different retirement-income schemes is consequently difficult. The taxonomy of pensions used here consists of two mandatory tiers: an adequacy part and an earnings-related part. Voluntary provision, be it individual or employer-provided, makes up a third tier.

    • Basic, targeted and minimum pensions

      Basic and minimum pensions along with social assistance are designed to ensure adequacy of old-age incomes and make up the first tier of the OECD’s taxonomy of pension systems, which was set out in the previous indicator of the Architecture of national pension systems.

    • Earnings-related pensions

      The second tier of the OECD’s taxonomy of retirement-income provision comprises earnings-related pensions. Key parameters and rules of these schemes determine the value of entitlements, including the long-term effect of pension reforms that have already been legislated.

    • Current retirement ages

      The rules for eligibility to retire and withdraw a pension benefit are very complex and often reflect conflicting government objectives. This is all mirrored in the different criteria for pension benefit withdrawal in different schemes. In 2014 the OECD average normal pension age was equal to 64.0 years for men and 63.1 years for women across all schemes for an individual retiring in 2014 and assuming labour market entry at age 20.

    • Future retirement ages

      Future normal and early retirement ages have been increasing. Following the changes presented herein and assuming labour market entry at age 20 in 2014 the normal retirement age will increase to 65.5 for men and 65.4 for women on average across all OECD countries against 64.0 and 63.1 years respectively in 2014.

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  • Expand / Collapse Hide / Show all Abstracts Pension entitlements

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    • Methodology and assumptions

      The indicators of pension entitlements that follow here in use the OECD cohort based pension models. The methodology and assumptions are common to the analysis of all countries, allowing the design of pension systems to be compared directly. This enables the comparison of future entitlements under today’s parameters and rules.

    • Gross pension replacement rates

      The future gross replacement rate shows the level of pension benefits in retirement from mandatory public and private pension schemes relative to earnings when working. For workers with average worker earnings (AW), the future gross replacement rate averages 53% for men and 52% for women in the 34 OECD countries, with substantial cross-country variation. At the bottom of the range, Mexico and the United Kingdom offer future replacement rates of around 25-30% of average earnings to people starting work today. The Netherlands, at the top of the range, offers replacement rates of slightly more than 90%.

    • Gross pension replacement rates: Mandatory and voluntary schemes

      Private pensions play a large and growing role in providing incomes for old age. The OECD average for gross replacement rates of an average earner from public schemes alone is 41%, compared with 53% with mandatory private pensions included. When voluntary private pensions are taken into account the OECD average increases to 58%. For the seven OECD countries where voluntary private pensions are widespread the average replacement rate is 60% for an average earner compared with 37% when only mandatory schemes are considered.

    • Tax treatment of pensions and pensioners

      The personal tax system plays an important role in old-age support. Pensioners often do not pay social security contributions. Personal income taxes are progressive and pension entitlements are usually lower than earnings before retirement, so the average tax rate on pension income is typically less than the tax rate on earned income. In addition, most income tax systems give preferential treatment either to pension incomes or to pensioners, through additional allowances or credits to older people.

    • Net pension replacement rates

      For average earners, the net replacement rate from mandatory pension schemes averages 63% across the OECD, which is 10 percentage points higher than the average gross replacement rate. This reflects the higher effective tax and contribution rates that people pay on their earnings than on their pensions in retirement. Net replacement rates vary across a large range, from less than 30% in Mexico to 105% in Turkey for average-wage workers. For low earners (with half of average worker earnings), the average net replacement rate across OECD countries is 75%. For high earners (150% of average worker earnings) the average net replacement rate is 58%, lower than for low earners. The differences across earnings levels reflect the progressive features of pension systems, such as minimum benefits and ceilings on pensionable earnings, the progressivity of the tax system and various tax measures that favour pension income.

    • Net pension replacement rates: Mandatory and voluntary schemes

      Since gross mandatory and voluntary pension systems are playing an increasing role in providing income for old age it also is equally important to look at the net replacement rate. The OECD average for net replacement rates of an average earner from public and mandatory private schemes alone is 63%. When voluntary private pensions, are added, the average net replacement rate is 68% for an average earner. When voluntary private pensions are taken into account, for the seven OECD countries where voluntary private pensions are widespread the average net replacement rate for these seven countries is 72% compared with 60% in gross terms.

    • Gross pension wealth

      Pension wealth relative to individual earnings measures the total discounted value of the lifetime flow of all retirement incomes in mandatory pension schemes at the point of retirement age. For average earners, pension wealth for men is 9.5 times and for women 10.8 times annual individual earnings on average in OECD countries. Gross pension wealth relative to annual individual earnings is higher for women because of their longer life expectancy.

    • Net pension wealth

      Net pension wealth, like the equivalent indicator in gross terms, shows the present value of the lifetime flow of pension benefits in mandatory pension schemes. But it also takes account of taxes and contribution paid on retirement incomes. Both figures for pension wealth are expressed as a multiple of individual gross earnings.

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  • Expand / Collapse Hide / Show all Abstracts Demographic and economic context

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    • Fertility

      The total fertility rate is below the replacement level of about 2.1 – the number of children needed to keep the total population constant – in 32 out of 34 OECD countries in 2013. The exceptions to this are Israel with a total fertility rate of 3.0 and Mexico at 2.2. In two-thirds of OECD countries fertility rates have slightly increased since the early 2000s. Fertility rates have a profound implication for pension systems because they, along with life expectancy, are the drivers of population ageing.

    • Life expectancy

      The remarkable increase in life expectancy is one of the greatest achievements of the last century. Lives continue to get longer, and this trend is predicted to continue. In 2010-15, life expectancy at birth averaged 77.2 years for men and 82.7 years for women. Among women, the figure was highest in Japan (86.9 years), followed by Spain, France, Italy and Switzerland. For men, life expectancy at birth was highest in Iceland (80.2 years) followed by Australia, Switzerland, Japan and Israel.

    • Old-age dependency ratio

      The demographic old-age dependency ratio will double by 2075 compared to today keeping age thresholds constant. Population ageing has been one of the main driving forces behind the wave of pension reforms in recent years. At the moment, there are 28 individuals aged 65 and over for every 100 persons of working age (ages 20 to 64) on average across all OECD countries. In 1950 the demographic dependency ratio was equal to 14, and has increased to 28 in 2015. The demographic dependency ratio is expected to continue to increase and to reach 35 in 2025, 51 in 2050 and 55 by 2075.

    • Employment rates of older workers

      The employment rate falls with age in all OECD countries. For individuals of age 55 to 59 the average employment rate across all OECD countries was equal to 67% in 2014 against 44% for the 60-64 age group and 20% for the 65-69s. In 14 OECD countries the employment rates were above the OECD average for all age groups, by contrast it was below average for all age groups in 13 OECD countries. Employment rates of people aged 55-64 have improved over the past decade in most OECD countries, from 48% in 2004 to 56% in 2014.

    • Effective age of labour market exit

      The average effective age of labour market exit was 64.6 for men and 63.1 for women across OECD countries in 2014. Across all OECD countries, the average effective age of labour market exit is six months higher than the average normal retirement age for men and equal to the average normal retirement age for women. The lowest effective exit age is found in France for men and in the Slovak Republic for women at 59.4 and 58.2 years, respectively. On the other range of the scale, Korea displayed the highest figures, at 72.9 years for men and 70.6 years for women, respectively.

    • Expected years in retirement

      The expected years in retirement indicator measures the length of expected remaining life expectancy from the time of average labour market exit by gender. In 2014 the OECD average for the number of expected years in retirement was 17.6 years for men and 22.3 years for women. France had the highest expected time in retirement, where it was equal to 23.0 years for men 27.2 years for women. Korea had the lowest expected years in retirement and here it was 11.4 years for men and 16.6 years for women. The average duration of expected years in retirement across OECD countries has increased over time. In 1970 men in the OECD countries spent on average 11 years in retirement, and women 15. By 2014 this had increased to 18 and 22 years respectively.

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  • Expand / Collapse Hide / Show all Abstracts Incomes and poverty of older people

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    • Incomes of older people

      Incomes of older people are on average lower than those of the population, even when differences in household size are taken into account. The incomes of the over 65s had incomes of 87% of the total population’s in 2012-13. The incomes of the people aged between 66 and 75 equalled 92% of the total population’s while the over 75s had income equal to 80% of the total population’s. In most OECD countries, public transfers provide the bulk of income in old age.

    • Old-age income poverty

      On average in the OECD, 12.6% of individuals aged over 65 live in relative income poverty, defined as an income below half the national median equivalised household income. There is large variation between countries. Poverty rates are higher for older people than for the population as a whole, which averages 11.4%. However, this result is driven by a handful of countries. In 18 out of 34 OECD countries, old-age income poverty is lower than for the population as a whole.

    • Average worker earnings

      Average worker earnings (AW) is an important metric as all pension modelling results are presented as multiples of this measure. The average worker earnings for all OECD countries averaged USD 40 007 in 2014.

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  • Expand / Collapse Hide / Show all Abstracts Finances of retirement-income systems

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    • Mandatory pension contributions

      Mandatory social insurance contributions and mandatory private pension contribution rates for employees and employers for a private sector worker at average earnings average equals 24% for 13 OECD countries. The average mandatory employers and employees pension contributions for the other 21 OECD countries where this is applicable averaged 18% in 2014.

    • Public expenditure on pensions

      Public spending on cash old-age pensions and survivors’ benefits in the OECD increased 28% faster than domestic output between 1990 and 2011, from an average of 6.2% of gross domestic product (GDP) to 7.9%. Public pensions are often the largest single item of social expenditure, accounting for 18% of total government spending on average.

    • Pension-benefit expenditures: Public and private

      Payments from private pension schemes were worth 1.6% of gross domestic product (GDP) on average in 2011 in the 26 OECD countries for which data are available. This is equivalent to one-fifth of average public spending on retirement benefits. Private-pension payments increased 38% faster than GDP between 1990 and 2011 on average, which is faster than public pension spending.

    • Long-term projections of public pension expenditure

      Public spending on pensions has been on the rise in most OECD countries for the past decades, as shown by the previous two indicators. Long-term projections show that pension spending is expected to go on growing in 20 OECD countries and fall in 13 OECD countries where data are available. On average pension expenditure is forecast to grow from around 9.0% of gross domestic product (GDP) in 2010-15 to 10.1% of GDP in 2050.

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  • Expand / Collapse Hide / Show all Abstracts Private pensions and public pension reserve funds

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    • Coverage of private pensions

      Private pension arrangements have been growing in importance in recent years as pension reforms have reduced public pension entitlements. In 17 OECD countries, private pensions were mandatory or quasi-mandatory in 2013 (that is, they achieve near-universal coverage of employees through collective bargaining agreements). In eight OECD countries, voluntary private pensions (occupational and personal) cover more than 40% of the working-age population.

    • Institutional structure of private pension plans

      Private pension plans can be funded through various financing vehicles. In 2013, for OECD countries for which data are available, on average, 75% of OECD private pension assets was held by pension funds, 20% was held in pension insurance contracts run by life and pension insurance companies, 4% was held in retirement products provided by banks or investment management companies, and 1% were book reserves.

    • Assets in pension funds and public pension reserve funds

      Substantial assets have been accumulated in most OECD countries to help meet future pension liabilities. The weighted average of OECD pension funds’ assets was equal to 83% of gross domestic product (GDP) in 2013. Sixteen OECD countries have also built up public pension reserves to help pay for state pensions. For these countries, public pension reserves were worth nearly 20% of GDP on average.

    • Asset allocation of pension funds and public pension reserve funds

      At the end of 2013, traditional asset classes (primarily bonds and equities) were still the most common kind of investment in pension fund and public pension reserve fund portfolios. Proportions of equities and bonds vary considerably across countries but there is, generally, a greater preference for bonds.

    • Investment performance of pension funds and public pension reserve funds

      Despite uncertainties in the world economy and volatility in financial markets, pension funds experienced positive rates of return in most OECD countries in 2012 and 2013. During 2013, pension funds recorded high real investment rates of return, with an OECD weighted average at 9.7%. Public pension reserve funds experienced the same trend, with strong returns both in 2012 and 2013 on average.

    • Pension fund operating costs and fees

      Private pension systems efficiency, as measured by the total operating costs in relation to assets managed, varies considerably between countries, ranking from 0.1% of assets under management annually to 1.5%. Fees charged to plan members to cover these costs also vary considerably in structure and level across countries.

    • DB funding ratios

      Average funding ratios of defined benefit pension plans varied greatly across countries at the end of 2013. For the countries that report such data to the OECD, funding levels improved in 2013 relative to 2012, with the exception of Germany where pension funds’ overfunding position slightly declined. Funding levels are calculated using national (regulatory) valuation methodologies and hence cannot be compared across countries.

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  • Expand / Collapse Hide / Show all Abstracts Pensions at a Glance 2015: Country profiles

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    • Guide to the country profiles

      The Country profiles use a common framework. First, there is a brief summary of the national retirement-income system and a table of key indicators. This background table comprises average worker earnings, public pension expenditures, life expectancy and the dependency ratio (the number of pensioners for every 100 workers). Data both for the country in question and the average for the OECD as a whole are presented.

    • Argentina

      The pension system has two main components: a basic component and an additional social insurance component. For those aged 70 and above there is also an additional age-related social insurance component, as well as a social assistance component.

    • Australia

      Australia’s retirement income system has three components: a means-tested Age Pension funded through general taxation revenue; the superannuation guarantee, a compulsory employer contribution to private superannuation savings; and voluntary superannuation contributions and other private savings. Superannuation savings are encouraged through taxation concessions.

    • Austria

      The pension system consists of a defined-benefit public scheme with an income-tested top-up for low-income pensioners.

    • Belgium

      The pension system has two components: an earnings-related public scheme with a minimum pension and a means-tested safety net.

    • Brazil

      The Regime Geral de Previdência Social (RGPS) covers the private sector workforce. It is financed through payroll taxes, shared by the employer and the employee, revenues from sales taxes and federal transfers that cover shortfalls of the system. It is a mandatory, pay-as-you-go financed single-pillar scheme, which is operated by the National Social Security Institute.

    • Canada

      The pension system offers a flat‑rate benefit, which can be topped up with an income-tested benefit, earnings-related public schemes and voluntary private pensions.

    • Chile

      The pension system has three components: a redistributive first tier, a second tier of mandatory individual accounts and a voluntary third tier. The individual accounts system was introduced in 1981 and is defined contribution.

    • China

      China has a two-tier pension system, consisting of a basic pension and a mandatory employee contribution to a second-tier plan. This system, which was introduced in 1998, was significantly revised in 2006. It covers urban workers and many of the parameters depend on province-wide (rather than national) average earnings.

    • Czech Republic

      The Czech pension system consists of a public pension scheme and a mandatory funded private scheme with voluntary entry.

    • Denmark

      There is a public basic scheme. A means-tested supplementary pension benefit is paid to the financially most disadvantaged pensioners. There is also a mandatory occupation pension scheme based on lump-sum contributions (ATP). In addition, compulsory occupational pension schemes negotiated as part of collective agreements or similar cover about 90% of the employed workforce.

    • Estonia

      The system combines an earnings-related public scheme with mandatory contributions to funded pensions. There is also a flat rate, basic element and a safety net, national pension.

    • Finland

      There is a targeted basic state pension (national pension and guarantee pension) which is pension income-tested, and a range of statutory earnings-related schemes, with very similar rules for different groups. Some of the schemes for private-sector employees are partially pre-funded while the public-sector schemes are pay-as-you-go financed (with buffer funds to even out future increases in pension contributions). Pre-funding has no direct impact on the benefit level. In 2014 an agreement was reached on a substantial pension reform for 2017.

    • France

      In the private sector, the pension system has two public mandatory tiers: a defined benefit pension and occupational schemes based on a points system. The defined-benefit scheme also has a means-tested minimum contributory pension (minimum contributif). In addition there is a targeted minimum income for the elderly (APSA).

    • Germany

      The statutory public pension system has a single tier and is an earnings related PAYG system. Calculation of pensions is based on pension points. If individual old-age provision from all income sources is not sufficient, additional means-tested benefits can be claimed from social assistance.

    • Greece

      Pensions are provided through an earnings-related public scheme and a basic pension.

    • Hungary

      The Hungarian pension system is a mandatory, uniform, defined benefit pay‑as‑you-go system with an earnings-related public pension combined with a minimum pension.

    • Iceland

      There is a basic state pension (national pension), which is income-tested. There are also mandatory occupational pensions.

    • India

      Workers are covered under the earnings-related employee pension scheme and defined contribution employee provident fund administered by the Employees Provident Fund Organization (EPFO) and other employer managed funds. Civil Employees of Central Government who have joined services on or after 1 January 2004 are covered under the Defined Contribution based New Pension System (NPS).

    • Indonesia

      Employees in private sectors are covered by a defined contribution plan.

    • Ireland

      The public pension is a basic scheme paying a flat rate to all who meet the contribution conditions. There is also a means-tested pension to provide a safety net for the low-income elderly. Voluntary occupational pension schemes have broad coverage: over half of employees.

    • Israel

      The state pension comprises a universal insurance pension combined with means-tested income support. Until 2008 voluntary contributions were common but as of 1 January 2008 mandatory contributions to defined contribution pension funds have been introduced.

    • Italy

      The pension system is based on notional accounts. Contributions earn a rate of return related to real GDP growth. At retirement, the accumulated notional capital is converted into an annuity taking into account average life expectancy at retirement.

    • Japan

      The public pension system has two tiers: a basic, flat-rate scheme and an earnings-related plan (employees’ pension scheme).

    • Korea

      The Korean public pension scheme was introduced relatively recently. It is an earnings-related scheme with a progressive formula, since benefits are based on both individual earnings and the average earnings of the insured as a whole.

    • Luxembourg

      The public pension scheme has a basic and an earnings-related part. There is also a minimum pension.

    • Mexico

      Mexico’s retirement income system has three components: a means-tested age pension called 65+; two mandatory defined contribution systems one for private workers and other for public servants with a minimum pension; and other individual and occupational private plans. In addition States, local authorities and public universities have their own independent pension systems.

    • Netherlands

      The pension system has three main pillars: a flat-rate state pension (AOW) related to minimum wages and financed via payroll taxes, funded occupational pension schemes, and individual saving schemes. Although there is no statutory obligation for employers to offer a pension scheme to their employees, industrial-relation agreements mean that 91% of employees are covered. These schemes are therefore best thought of as quasi-mandatory.

    • New Zealand

      The public pension is flat-rate based on a residency test. Coverage of occupational pension plans continues to diminish. Coverage of the KiwiSaver voluntary workplace savings scheme continues to grow.

    • Norway

      The new public pension system, beginning in 2011, consists of an income pension, and a guarantee pension for people with no or only a small income pension. The guarantee pension is income-tested against the income pension. In 2006, a mandatory occupational pension was introduced in the private sector as a supplement to the public pension.

    • Poland

      The system is based on two notional accounts schemes. Since 2014 participation in the funded scheme is voluntary, as workers can opt in to allocate their contributions to the NDC sub-account to the private DC scheme.

    • Portugal

      Portugal has an earnings-related public pension scheme with a means-tested safety net.

    • Russian Federation

      The mandatory old-age pension consists of a notional accounts system including a basic flat-rate benefit and a funded defined contribution scheme. There are also statutory social pensions and voluntary private pensions managed by non-state (private) pension funds.

    • Saudi Arabia

      The mandatory public pension consists of an earnings-related old-age pension and an old-age settlement.

    • Slovak Republic

      The earnings-related, public scheme is similar to a points system, with benefits that depend on individual earnings relative to the average. Low-income workers are protected by a minimum amount of earnings on which the pension benefit is calculated. All pensioners are eligible for social assistance benefits. Voluntary defined contribution plans were introduced in 2005.

    • Slovenia

      The system combines an earnings-related public pension with minimum and targeted schemes.

    • South Africa

      The public pension is flat rate based on a residency test. There is also a large number of occupational schemes, though coverage is not high at lower-income levels.

    • Spain

      The Spanish public pension system consists of a single, earnings-related benefit in the contribution level, with a means-tested minimum pension. There is also a non-contribution means-tested level, which replaces the previous special social assistance scheme.

    • Sweden

      The national retirement pension consists of a pay-as-you-go notional accounts system and a mandatory funded defined contribution pension and a defined benefit pension-income-tested top-up. Occupational pension plans with defined benefit and defined contribution elements have broad coverage.

    • Switzerland

      The Swiss retirement pension system has three parts. The public scheme is earnings-related and has a progressive formula in addition there is an income-tested supplementary benefit. A mandatory occupational person regime was introduced in 1985. The occupational pension can be supplemented on a voluntary basis.

    • Turkey

      An earnings-related public scheme with an income-tested safety net and a flat-rate supplementary pension.

    • United Kingdom

      The public scheme has two tiers, (a flat-rate basic pension and an earnings-related additional pension), which are complemented by a large voluntary private pension sector. The public scheme is currently being reformed into a flat-rate basic pension. An income-related non-taxable benefit (pension credit) targets extra spending on the poorest pensioners.

    • United States

      The publicly provided pension benefit, known as social security, has a progressive benefit formula. There is also a means-tested top-up payment available for low-income pensioners.

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