With more people living longer and fewer people being born, societies are now faced with the challenge of supporting more people for longer with smaller working age populations to help support them.
When pensions were first introduced, most people would not live to reach pensionable age. Of those who were lucky enough to reach retirement, few were still alive 5 years later. Over the course of the last century, average life expectancy increased dramatically – by between 25 and 30 years in many developed countries. While this is certainly very good news, the number of children being born in the same countries has decreased – and this creates a problem. The pension systems of today were designed in very different times. With more people living longer and fewer people being born, societies are now faced with the challenge of supporting more people for longer with smaller working age populations to help support them.
In this article, we take a look at the issues involved and discuss ways in which companies can act now to start addressing the issue.
Conclusion
All stakeholders (government, companies and individuals) need to address the issue of people living for longer. Action needs to be taken now to mitigate risk but also to ensure that burdens and benefits are divided equitably across generations. Pensions are presently receiving an unprecedented amount of attention. We need to take the opportunity to design a pension system that is fit for the future.
Please read more in the full article (4 pages).
