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Financial Incentives and Retirement Savings

image of Financial Incentives and Retirement Savings

Are tax incentives the best way to encourage people to save for retirement? This publication assesses whether countries can improve the design of financial incentives to promote savings for retirement. After describing how different countries design financial incentives to promote savings for retirement in funded pensions, the study calculates the overall tax advantage that individuals may benefit from as a result of those incentives when saving for retirement. It then examines the fiscal cost of those incentives and their effectiveness in increasing retirement savings, and looks into alternative approaches to designing financial incentives. The study ends with policy guidelines on how to improve the design of financial incentives to promote savings for retirement, highlighting that depending on the policy objective certain designs of tax incentives or non-tax incentives may be more appropriate.

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The tax treatment of retirement savings in funded private pension arrangements

This chapter describes and compares the tax treatment of retirement savings in funded private pension arrangements across 42 OECD and selected non-OECD countries. It provides details regarding the tax treatment of contributions, returns on investment, funds accumulated and withdrawals. It also describes other forms of financial incentives offered to individuals saving for retirement, mainly matching contributions and fixed nominal subsidies. The information refers to 2018 and covers all types of funded private pension plan in each country.

English

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