Over the past two decades, asset-backed pensions have become a key pillar of retirement systems, with assets more than tripling to over USD 56 trillion in 2023. These pensions diversify resources for financing retirement and complement pay-as-you-go systems, enhancing resilience to economic shocks and demographic challenges. Their robust design, regulation, and supervision are important for delivering strong retirement outcomes.
The 2024 OECD Pensions Outlook provides a valuable resource for policymakers, regulators, and stakeholders, providing comprehensive analysis and forward-looking guidance on ensuring pensions continue to serve as a cornerstone of financial security in retirement. Specifically, this edition examines how to extend the coverage of asset-backed pensions, looking at how employers, particularly smaller ones, and the self-employed, can be better integrated in these systems, and how financial incentives can be used to promote enrolment and contributions.
The report also analyses how investment strategies can balance sustainability and risk, deliver long-term value for savers, and ensure that pensions are resilient to market volatility. In particular, it highlights the importance of longevity protection and innovative approaches to providing retirement income, such as options for pooling risks and leveraging home equity. The report elaborates on the importance of financial education and raising awareness, as individuals need clear guidance to plan effectively for retirement. For example, digital tools, such as pension dashboards, are important to empower savers and foster awareness.
These insights and recommendations aim to support policymakers in strengthening pension systems and meeting the evolving needs of society. Enhancing the design and governance of asset-backed pensions can foster more inclusive and resilient systems, secure better outcomes for individuals and contribute to sustainable economic growth and innovation.
Mathias Cormann,
OECD Secretary-General