Work longer, save more, says OECD pension report
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Dec 08, 2014  |  Vote 0    0

Work longer, save more, says OECD pension report

People will have to save more to ensure a decent retirement, the OECD warns in its 2014 Pension Outlook

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Working longer and contributing more to retirement savings are the only ways to ensure an aging population will have decent retirement incomes amid a slowing economy, the Organisation for Economic Co-Operation and Development warns.

Increasing the effective retirement age can help, but more needs to be done to help older workers find and retain jobs, the OECD also said in its 2014 Pensions Outlook released Monday.

While most countries have taken steps to curb the impact of the global economic slowdown on retirement systems, additional measures are needed, said the policy forum with 34 member countries, including Canada.

“It’s encouraging to see the progress made in recent years to make pension systems more sustainable and adequate,” OECD Secretary-General Angel Gurría said in a statement released Monday.

Some countries have raised taxes on pension income and pension contributions, others have reduced or deferred the indexation of pension benefits, and others have increased the statutory retirement age, the report notes.

“But the ongoing rapid demographic shift and the slowdown in the global economy highlight the need for continuing reforms. We must communicate better the message that working longer and contributing more is the only way to get a decent income in retirement,” Gurría also said.

In countries where private pension coverage is voluntary, auto-enrolment programs, where employees are automatically enrolled in the pension plan but can opt out, generally result in higher participation, the report notes.

Governments need to ensure that pension funds and annuity providers are using up-to-date mortality tables that reflect growing life expectancies, the report also says.

Policy makers also need to restore trust among young people in the long-term stability of the pension system, the report says.

Toronto Star

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