On Monday 3 December 2018, the OECD presented its 2018 Pensions Outlook. The overall message of the outlook is that pension reforms in the OECD over the last decade have left pension systems more financially sustainable. Yet, that has come at a cost for workers and working families, as the OECD report also points to a rising number of pension schemes struggling to provide affordable and adequate pension for all workers, in particular for women and people in non-standard forms of work. On a longer term, the report raises concerns about the lack of public trust in pension systems.
The findings are another dire reminder that pension reforms should do a far better job at balancing financial sustainability objectives with the prime objective of fulling people’s right to adequate, decent and secure pension. They also point to the threats created by unstable employment relations and rising job precarity.
The Pensions Outlook 2018 presents the positive news that pension systems on average have been improved and have become more “sustainable”. The Outlook, however, is not all good news. The Outlook also paints a rather grim picture of the challenges faced by governments. As such, the OECD notes that governments face a number of challenges including population ageing, low returns on retirement savings, low growth, less stable employment careers and insufficient pension coverage among some groups of workers.
Perhaps just as concerning, the OECD finds that these issues have eroded public belief that pension systems will deliver on their promises once workers reach retirement age. Rightfully so. While the financial sustainability has improved, pension systems across the OECD are struggling to provide affordable and adequate pension for all workers. This applies especially for women and people in non-standard forms of work who more often find themselves left with an inadequate pension scheme due to lower contribution accumulations or left out of pension schemes all together.
Certainty that you can retire after a long work-life and still maintain a decent income is pivotal for workers and should be so for governments as well. TUAC therefore calls on governments to ensure robust pension systems with a fair risk-sharing between workers, employers, and government. Now is the time to ensure adequate pensions for all.
Read the OECD Pensions Outlook here.