Overview:

The theme of this edition of Business and Finance Outlook is fragmentation: inconsistent structures, policies, rules, laws and industry practices that seem to be blocking business efficiency and the growth of productivity. The above bearing in mind that seven years have passed since the global financial crisis, and despite the regulatory reforms, the global economy does not show much progress.

In relation to pension matters, this report has a chapter (Chapter 6) that deals with the topic “Fragmentation of pension markets due to differences in life expectancy,” which provides evidence of differences in life expectancy at retirement age between different socio-economic groups in selected OECD countries, based on education, income and occupation measurements. The evidence shows that the highest socio-economic groups live longer than lower socio-economic groups, and that the differences may increase over time. The fragmentation of mortality rates has implications for pensions, life annuity markets and public policies. It creates major challenges for pension funds and life insurance companies to manage the longevity risk. Nonetheless, it also presents an opportunity for offering retirement solutions more suited to the needs of the different segments of society. Policymakers must be aware of these differences to ensure that the rules governing access to pensions and retirement savings do not put those in lower socio-economic groups at a disadvantage.

To review the report in detail, please go to the following link.