Pension Design and Sustainability

Building an efficient and sustainable pension system is predicated on a complex set of factors and relationships including: the state of the economy, cultural differences, the structure of the labor force, population ageing, and the political situation. Over the past twenty years, many different pension systems have been implemented, and in an environment of economic instability, reforms are essential. Recent reforms, such as the new scheme in Sweden, linked with the GDP, show that traditional schemes are no longer sufficient and demonstrate again the impossibility to design a "one size fits all" system.

The current ageing of the world population brings a new dimension for pension design. The Department of Economic and Social Affairs of the United Nations forecasts that the proportion of people aged 60 or older will increase to 21% by 2050, and the growth of the number of pension beneficiaries is faster than the growth of the working population, creating an economic environment where fewer young people are available to support a growing ageing population, and this phenomenon intensifies with slow economic growth. The situation of women also becomes particularly worrying, given that they often live longer than men, but receive a smaller pension due to lower wages or incomplete careers.

To face this new challenge, what appears to be the most common solution is to raise the retirement age if there is one; however this solution alone does not address the fundamental need for system reform and creates hardship for older workers in physically challenging professions. In this new context, defining a new sustainable pension system becomes a priority, especially for countries with a rapidly ageing population.

Of particular interest are abstracts that define the impact of an ageing population and the importance of a well-designed pension system. More importantly, such designs are needed to ensure a society's future through sustainable development. Abstracts that identify the importance of implementing pension systems in developing countries will also be welcomed.