Foreword

Financial Incentives and Retirement Savings reviews how countries design financial incentives to promote savings for retirement and examines whether there is room for improvement. Given the cost financial incentives represent for governments, it is important to verify whether they are still effective tools for encouraging citizens to save for retirement. The publication first describes how countries currently design financial incentives. It then assesses the overall tax advantages that these incentives provide to individuals, how these incentives affect the way individuals save for retirement and the fiscal cost these incentives represent to governments. The publication also compares different approaches to designing financial incentives based on their inherent characteristics and within a common framework to assess the different implications for individuals and governments. Finally, it provides policy guidelines to help countries improve the design of their financial incentives with a view to promoting savings for retirement.

This publication is part of the research and policy programme of work of the OECD Working Party on Private Pensions (WPPP). This international body brings together policy makers, regulators and private sector representatives from close to 40 countries to discuss issues related to the operation and regulation of funded retirement income systems.

This publication was prepared by Pablo Antolín and Stéphanie Payet of the Insurance, Private Pensions and Financial Markets Division of the OECD Directorate for Financial and Enterprise Affairs. It has greatly benefitted from the comments of national government delegates of the WPPP. Delegates assisted in verifying the accuracy of the information corresponding to their respective countries. Any remaining errors are solely the responsibility of the authors. We would like to thank Ambrogio Rinaldi, Chair of the WPPP, for his useful advice, support and valuable inputs to this project. Comments and inputs from Diana Hourani are gratefully acknowledged. Editorial and communication support was provided by Pamela Duffin, Kate Lancaster and Edward Smiley.

The OECD gratefully acknowledges the financial support from the European Union. The opinions expressed and arguments employed herein in no way reflect the official views of the European Union or its member countries.