(OECD) This edition of Pensions at a Glance discusses the challenges of high inflation for pensions and reviews the pension measures legislated in OECD countries between September 2021 and September 2023. As in past editions, a comprehensive selection of pension policy indicators is included for OECD and G20 countries. Moreover, this edition provides an in-depth analysis of pension provisions for hazardous or arduous work.
Life expectancy developments and main recent pension policy measures in OECD countries
- Life expectancy at older ages bounced back from 2021 after a drop of about half a year in 2020 on average. However, since about 2012, the trend in life expectancy gains at age 65 has slowed down.
- The Netherlands passed a systemic reform of private pensions from defined benefit to defined contribution. Spain formally removed the automatic adjustment mechanisms previously legislated to address financial sustainability, including low indexation of pensions in payment, and reintroduced price indexation. Instead, contributions were raised especially for high earners. Costa Rica extended the reference period for past wages used to calculate pensions from 20 last years to 25 best years.
- The Slovak Republic reintroduced a one-to-one link between the retirement age and life expectancy. Sweden raised the retirement age and will link it to two-thirds of life-expectancy gains. Costa Rica, the Czech Republic (hereafter “Czechia”) and France have tightened early or minimum retirement ages. Switzerland will close the gender gap in normal retirement ages, and Israel will reduce it.
- Normal retirement ages are set to increase in three-fifths of OECD countries. Only Colombia, Costa Rica, Hungary, Israel, Poland and Turkiye will still maintain a gender gap in normal retirement ages. The average normal retirement age will increase from 64.4 years for men retiring now to 66.3 years for those starting their career now. Future levels range from 62 years in in Colombia, Luxembourg and Slovenia to 70 years or more in Denmark, Estonia, Italy, the Netherlands and Sweden.
- Canada, Chile, Estonia, France, Italy, Lithuania, Spain, Sweden and Türkiye substantially increased first-tier pensions, which will particularly benefit retirees with low pensions.
- On average, full-career average-wage workers will receive a net pension at 61% of net wages. Future net replacement rates are at 40% or below in Australia, Estonia, Ireland, Japan, Korea, Lithuania and Poland; they exceed 90% in Greece, the Netherlands, Portugal and Türkiye. The future net replacement rate of workers earning half the average wage is higher at 73% on average.