Report claims employment of over-55s ‘crucial’ to easing pension crisis

Aon Consulting finds that the most sustainable pension systems have a high percentage of private pensions, affordable state payouts and high employment rates among 55-64-year- olds.

The firm’s 2006 European Pensions Barometer Report is based on factors such as demographic trends, the affordability of company pensions, the cost of the state pension and the degree to which workers save in private pensions.

It found that countries in which most people between 55 and 64 are still working tend to be in the best shape, and that efforts to increase employment rates in this age bracket must be intensified.

At the bottom of the survey for healthy pension systems was Belgium. As a country with little private savings and generous state benefits, the report believes that its system may be unsustainable, especially when taking into account its low birth rate and ageing population. On the other hand Denmark, at the top of the table, was found to have a state pension at an acceptable level in addition to the highest proportion of workers, 95%, on a private pension. 

According to the report, “the poorer the state pension, the more affordable it becomes”.

The lowest-risk countries (after Denmark) were Estonia, Ireland, Latvia, Netherlands, and the United Kingdom, while at the other end of the table, the highest pension risk countries were Belgium, Slovenia, Greece, France, Malta, Austria.

Aon Consulting chief actuary Donald Duval noted the issue’s importance to business: “If you have a fairly finely balanced decision about whether to go to country A or B, this might be a reason to go for one country rather than another.” 

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