The Coverage of Occupational and Personal Pension Plans

Abstract

Expanding private pension plans coverage is seen as an alternative to address the growing pension gap. Indeed, due to recent reforms, lower public pension system replacement rates are expected for future generations of retirees. However, in most countries, private provision remains voluntary and the coverage rates observed are still very low. Several factors might explain this evidence and several policy options have been suggested to increase coverage in private pension plans. Yet, the issues concerning both the decision of the occupational pension plan type, defined benefit or defined contribution, and the characteristics of the personal pension plans, are most important and complex, as the implications for attaining the expected retirement income adequacy are diverse. This paper reviews these issues and the coverage of these pension plans.