Second and third pillar plans, income from financial assets and employment – as well as the rise of the elderly in the workforce – are gaining importance The changes in the retirement landscape are challenging for all parties involved – solutions providers, governments and employees.
To achieve at an adequate retirement income for future retirees all parties have to work together to set up a modern pension system with strong different pillars. “It’s time to Rethink Retirement”, says Jay Ralph, Chairman of Allianz Asset Management and member of the Board of Management of Allianz SE.
The process of pension reform
Societal aging and the accompanying rise in the old-age dependency ratio has increased the pressure on public finances; particularly on the sustainability of pay-as-you-go (PAYG) pension systems. In 2001, when the European Commission began to make projections on the cost of aging for the 15 member states of Western Europe1, the cost of pension systems was expected to increase by 2.9% of the GDP until 2050. In addition, they factored in the expected costs of healthcare and long-term care systems. In an effort to ease the pressure, most countries began introducing pension reforms at the turn of the century. Though the latest report shows there has been some relief on average budgets (2.1% for the Eurozone until 2050), there are still large differences between countries.
