OECD Pensions Outlook 2024
Improving Asset-backed Pensions for Better Retirement Outcomes and More Resilient Pension Systems
The OECD Pensions Outlook aims to enhance retirement outcomes by providing insights and recommendations for improving the design of asset-backed pensions. This edition focuses on promoting inclusiveness, strengthening incentives, ensuring access to adequate investment options, protecting against longevity risk and enhancing communication. In particular, it explores how to improve outcomes through pension plans that pool multiple employers, financial incentives, equity investments, better design of the payout phase to meet financial needs, home equity release products and well-designed individual pension dashboards.
The last two decades have seen significant growth in pension assets. In advanced economies, pension assets have nearly doubled as a share of GDP to an average of 55%, exceeding 100% of GDP in eight countries. This global trend is not limited to advanced economies. Many of today’s emerging and developing economies also have pension funds with hundreds of billions of US dollars in assets. The growth in pension assets has been supported by policy initiatives aimed at diversifying retirement financing sources to create more resilient pension systems and improving retirement outcomes for individuals. Over half of the working-age population participates in asset-backed pension systems in most OECD countries.
With total assets over USD 56 trillion, pension funds are also the largest investors in global capital markets, including public equity and debt markets as well as emerging private capital markets. At the end of 2023, they owned nearly one-fifth of global public equity market capitalisation.
