The World Economic Forum has just published the report, “Developing Future Social Protection Systems Retirement Income”.
Developed countries and emerging markets alike are facing substantial challenges as a result of changing demographics, fiscal constraints, economic instability and volatile financial markets. It is apparent that there is a need not only to address the long-term problems associated with these challenges but also to take short-term action.
The study assesses on the basis of economic indicators, the fiscal sustainability of various retirement income pillars of 36 countries. Moreover, it evaluates the inherent risks, challenges and opportunities of current retirement income schemes in general and for each individual pillar.
This report indicates that demographic challenges and fiscal sustainability issues are most visible in the typically government-funded, pay-as-you-go schemes. In contrast, employer-sponsored pension funds and individually funded saving schemes make individual retirees more vulnerable to longevity and investment risks. Increasingly, these risks will be shifted to individual retirees. However, most retirees are ill-prepared to absorb and manage them.
Read the full-text here.