Based on the conceptual framework of risks to which pension systems are exposed, this study updates the review of the six reference models that were then analyzed (Chile, the United States, Spain, the United Kingdom, Sweden and the Netherlands), and adds five new models (Brazil, Germany, France, South Korea and Japan).

The report also includes the “Pressure on retirement pension systems indicator” (IPSPJ), developed by MAPFRE Economics for 45 countries, which helps to assess the degree of pressure to which these systems are exposed when implementing their reforms.

Based on this international comparative analysis, the report proposes a set of public policy elements to provide stability and sustainability to pension systems in the mid and long term.

From the international comparative analysis of the reference models included in this report, it can be concluded that, faced with the pressure of demographic, economic and financial risks that all pension systems in the world are subject to, to varying degrees, the reform option that offers the best possibilities of providing stability and sustainability in the mid and long term, involves creating a better balance between the different pillars, as a means for redistributing the risks that such systems are exposed to and, ultimately, to be able to better absorb the effects derived from their potential materialization.

The aim of creating a better balance between pillars, and consequently between risks, can only be achieved in a mid and long-term implementation scenario, and can be summarized in the following general principles:

• Maintenance and strengthening of a basic social support system (Pillar 0), i.e., minimum solidarity and non-contributory support aimed at the strata of workers who do not manage to complete their work career, which would have allowed them to access a contributory pension.
• Rationalization of a first contributory pillar that combines intergenerational solidarity with individual savings efforts, thus creating a closer nexus between the benefits of the system and individual contributions to it. In this process, measures such as the adjustment of the retirement age (the one that has shown the greatest sensitivity for achieving this purpose), together with the adjustment of contribution rates, constitute the two essential tools.
• Generation of incentives for companies to create and manage (directly, or indirectly, through professional managers) complementary contributory pension plans (especially defined contribution) that constitute a supplement to the first pillar contributory pensions.
• Introduction of incentives for individual and voluntary savings in the mid and long term, which workers engage in through professional managers of financial products aimed at generating retirement income to complement first and second pillar pensions.

To review the complete report, download it here.