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Pensions at a Glance 2015

OECD and G20 indicators

image of Pensions at a Glance 2015

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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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.

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