• The fiscal and demographic pressure faced by PAYGO systems worldwide have driven systematic modifications to their parameters, providing only temporary relief, thus reflecting their deeply ingrained lack of sustainability.
• In the countries analyzed, the fiscal expenditure of the public PAYGO systems is 12% of GDP, on average, their deficit is 2.7% of GDP and demographic trends show that there are ever less active workers who can finance the pension of a retiree, dropping from almost 11 in 1950, to 2.4 by 2060. Given this scenario, these countries have implemented numerous profound reforms, with considerable social and political cost, negatively affecting the well-being of the adult population. For example, contribution rates have risen to levels above 30% of workers’ salaries (Nicaragua and Russia), and in order to be able to access a full pension, workers must now contribute up to 53 years (Nicaragua).
• The unsustainability of the PAYGO systems has led a number of countries to successfully implement individually funded mechanisms to improve pensions. These mechanisms have been incorporated in different ways worldwide, with significant levels of capitalization, with funds equivalent to a weighted average of 82% of GDP in OECD countries.

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