By Richard Johnstone | 8 December 2014

Sluggish economic growth is increasing the pressure on public sector pension provision across developed countries, the Organisation for Economic Co-operation and Development has warned today.

The economic think-tank said stagnation in developed countries as well as increasing numbers of older people meant that countries faced challenges to both ensure an adequate retirement and share the financial burden fairly across generations.

The OECD Pensions Outlook 2014 said the 2008 financial crisis led many countries to speed up reforms to make their pension systems more financially sustainable. Changes included increasing taxes on pension income and pension contributions, reducing or deferring the indexation of pension benefits, and increasing the statutory retirement age.

OECD secretary general Angel Gurría said such changes were encouraging.
‘But the ongoing rapid demographic shift and the slowdown in the global economy highlight the need for continuing reforms. We must communicate better the message that working longer and contributing more is the only way to get a decent income in retirement,’ he added.

Increasing the effective retirement needed to be matched by extra efforts to help older workers find and retain jobs, the report stated. Public policies to reduce age discrimination, improve working conditions and increase training opportunities for older workers were essential.