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Financial Crisis Accelerated Pension Reform

The global financial crisis has led to an acceleration in the reform of public pension plans across developed economies, but further changes are needed if retirees are to receive adequate incomes without placing too much stress on government finances, says the Organization for Economic Cooperation and Development. Its annual report on pensions says future changes to pension systems will have to take into account the high levels of home ownership among retirees, as well as their financial wealth and access to public services, all of which boost their real incomes. As a consequence of changes over the last two decades, which have accelerated in the years since 2008, people starting work now will receive fewer benefits from publicly run pension schemes than current retirees, even if they work longer. However, the OECD says there are still questions about how affordable public pension systems are over the long term and governments will have to make tough choices about how fair it is to ask current workers to pay taxes to support pension payments for a level they themselves won't enjoy.

Courtesy of Benefits and Pensions Monitor website News Alerts

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