Governments need to make greater use of asset-backed pensions to support retirement incomes, OECD says - Pension Policy International
By Google News Personal Finance ·
Asset-backed pensions have expanded substantially over the past two decades, complementing traditional pay-as-you-go schemes and strengthening the resilience of retirement systems, but governments should do more to promote the use of pension funds to meet the significant challenges of financing retirement, according to a new OECD report.
Pensions Outlook 2026: Are We Saving Enough for Retirement? shows that pension fund assets reached USD 78 trillion at the end of 2025, equivalent to 106% of OECD GDP. This represents a notable increase from just 62% in 2001, highlighting the growing importance of pension assets in the economy over a relatively short period. The expansion has been driven by higher contributions, positive investment returns and relatively low pension benefit payments in many countries.
Despite this significant growth in pension assets, the report highlights that individuals may not be saving enough to secure adequate retirement income. Nearly all OECD countries now face a retirement contribution gap, meaning that workers will need to complement their mandatory pensions with voluntary contributions to reach their retirement income objective. This contribution gap is 10% or more for male employees on average earnings in 17 of the 41 countries covered. Women face a larger gap than men in 17 countries, and the self-employed face a larger gap than employees in 31 countries. In half of countries studied, the contribution gap is largest for high earners, while in 12 countries low earners need to contribute the most.
Overall asset growth also masks large differences across countries. While eight OECD countries have pension assets that exceed their GDP, in 17 other countries pension assets are below 20% of GDP. The result is that most individuals’ savings in…
Originally published by Google News Personal Finance
