The Organization for Economic Cooperation and Development (OECD) has warned that global pension systems will have to choose between increasing workers’ contributions, raising the retirement age or reducing pensions for its maintenance, according to the biennial report ‘Pensions at a glance’, published this Wednesday.
“Putting pensions on a solid course for the future will require painful political decisions: or ask for more to be paid with quotes, work more [años] or receive lower pensions. But these decisions will also be painful because pension reforms are among the most contentious, least popular and potentially dangerous ”, has indicated the OECD in the document. These recommendations are at a general level for all the members that make up the OECD, but do not refer to any specific country.
The agency recalled that, although all political efforts have been focused on the pandemic in the last two years, “The long-term challenge for pensions remains to provide financially and socially sustainable pensions in the future.”
In the context of the pandemic, the Paris-based institution has highlighted that pensioners have not felt the economic impact of the pandemic on their income, although it has warned that the pension systems themselves have encountered new “Financial pressures” as a result of lower contributions. In any case, the OECD also considers that this impact may be short-lived if the economic recovery observed in most countries in recent months is sustained over time.
Similarly, The main recipe considered by the OECD is for countries to incorporate solutions to the “most urgently structural” challenges for pension systems as part of their national recovery plans. In this sense, automatic stabilizers should be an “essential tool”.