THE IMPACT OF THE AGEING TO THE PENSION SCHEMES IN EUROPE
THE IMPACT OF THE AGEING TO THE PENSION SCHEMES IN EUROPE

Summary/Abstract: An ageing society is characterised by a growing proportion of the retired to the active working population. Societies age either when fertility rates decline so that fewer children are born, or when longevity increases, or both. Ageing affects virtually all societies today, but more so the industrial countries, which have generally experienced it over a longer period and for which further pronounced ageing is projected over the next four decades, at the end of which a peak in the proportion of the elderly is likely to be attained. Concerns about the challenges posed by ageing populations have moved to the forefront of the public policy debate in many countries. In the industrial countries, public schemes for providing for the retired are predominantly of pay-as-you-go (PAYG) types, whose coverage is typically comprehensive, but which are frequently supplemented by funded schemes, mostly operated by the private sector. A standard PAYG system levies payroll taxes on the working population, while paying benefits to the retired, but usually without the close person-based relationship between individual contributions and benefits that characterises fully funded schemes.

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