Launch of the OECD Pensions Outlook 2020

Opening remarks by Greg Medcraft

Director for Financial and Enterprise Affairs, OECD

I'm going first taking a step back to look at the wider context that’s produced the 2020 edition of the OECD Pensions Outlook, and then second, look at the specific goals of this year’s edition.

This Outlook is the result of close collaboration between pension and insurance regulators and supervisors from OECD and non-OECD countries, through the OECD Working Party on Private Pensions, many of whose delegates have joined us today, and with International Organisation of Pensions Supervisors – and we’re lucky to have Helen joining us in this discussion bringing the IOPS perspective. 

The Working Party on Private Pensions is a forum where countries come together to share knowledge, intelligence and experience in retirement savings arrangements – and what we’re seeing today and in recent history is that many countries are facing similar challenges.

Many countries inside and outside the OECD are dealing with secular demographic trends, like aging populations that have more people entering retirement and less people entering the workforce; and improved longevity which is of course a good thing, but also means we need to fund longer retirements.

They are also facing structural economic trends, such as: low productivity growth; stagnant wage growth; the rise of non-standard forms of work; low interest rates, and related low returns in traditional asset classes.

Then, over the past year, retirement savings and old-age pension systems – and their regulators and supervisors – have also contended with the impacts of COVID-19, which has exacerbated and extended some of these trends and brought rise to new challenges.

The OECD brings these countries together to examine and analyse these experiences and draw from them advice and guidance to policymakers on how best to help make retirement savings arrangements more sustainable and more resilient.

As the OECD's Secretary General highlighted earlier in the launch event, the kinds of policy options and guidance we develop are always about making trade-offs between time horizons and competing policy objectives. They also need to take into consideration the institutional setup and goals in each country.

This brings me to the goal of this edition of the OECD Pensions Outlook – and more than anything else, that goal is to help policymakers strike the right balance as they navigate the immediate crisis before us, while ensuring the needs of retirement savers are met many years into the future.

Pensions supervisors and policymakers must of course act to ensure the integrity, sustainability and adequacy of pensions systems and arrangements through the pandemic, but we cannot let this distract us from meeting long-term goals and addressing the long term challenges I have just mentioned.

We cannot let this divert us from the fact that retirement savings arrangements around the world need to be improved if they are to fulfil their essential role of providing retirement income – either as the main source of retirement income or to complement to Pay As You Go public pensions, depending on the country.

This Outlook offers advice on how policymakers can appropriately leverage retirement assets to support the economic recovery and resilience, to encourage retirement saving through difficult economic conditions, and meet short term market challenges arising from the crisis.

At the same time, it puts forward options and analysis to adapt and strengthen retirement savings arrangements in the face of those long-term shifts, like sharing longevity risk and supporting individuals in non-standard work.

All of this is put forward to help pension regulators and supervisors to stay the course in rough seas, and to keep their eye on the destination: sustainable, resilient and fit-for-purpose pensions and savings systems that provide for our citizens in retirement.

Download the report here.

Watch the virtual launch event: