Pensions

Abstract

Over the past century, pension systems have grown to be the biggest element of modern welfare states’ social security institutions both in terms of the number of persons drawing pension benefits and the financial volume. With demographic ageing, the importance of pension provision for the economic well-being of elderly populations and their macroeconomic weight grows further. The key aims of pension systems are poverty relief and consumption smoothing over the life course. Different pension systems pursue these policy goals in different ways and at varying levels. This chapter provides an overview of the different ways pension provision is organized in affluent OECD countries. It furthermore develops empirical insights into the outcomes of pension policies in terms of old-age poverty and income replacement levels and discusses gender and socio-economic inequalities related to pension provision. The authors close the chapter by reflecting on contemporary challenges arising from recent pension reforms and population ageing for pension adequacy.