In most OECD countries, governments promote private pensions by means of tax incentives, most commonly in the form of a tax exemption on contributions and investment income, with taxation applying instead on pension benefits. This Chapter provides a projection over the next 45 years of the budgetary impact of tax-favoured private pension plans in 17 OECD countries. The findings suggest that aside from leading to a deferral of tax revenues, such tax treatment of private pensions represents a net cost for public finances, largely because the taxes foregone on contributions and asset accumulation exceed taxes collected on pension benefits. Going forward, as larger cohorts reach retirement age and pay taxes on pensions, the net budgetary cost is expected to diminish in the majority of countries, but the impact on public finances will likely remain negative in most cases. The reason is that tax-favoured private pension plans tend to be used mostly by upper-income individuals who would most likely have saved equivalent amounts even without incentives. The Chapter discusses a number of alternative policy options that may help to broaden participation among lowerincome earners so as to raise the impact on private savings and diminish the budgetary cost. Compulsion is one option. Another is to change the design of occupational retirement plans so that enrolment is the default option. The value of the tax incentives to participate could also be re-balanced in favour of lowerincome earners by replacing the tax deduction for contributions by a non-wastable tax credit.