The Unavoidable Role of Private Pensions in Retirement Income Systems

This work describes the growing need that governments face to reform their pension systems into more financially sustainable structures, especially in light of the recent financial crisis and the rapidly ageing population. The study identifies two main types of structural reforms: those that automatically link the public pension system’s parameters to the demography or actuaries, and those that lead to a partial replacement of the PAYG-financed public pension systems by private pension arrangements and the transfer of a part of social security contributions to fully-funded, DC accounts.