Journal of social protection research
Volume 6, Numéro 2, Pages 05-40
2025-12-31
Is The Development Of Retirement Savings A Future-proof Solution To Population Ageing ? A Fact-based Answer
Authors : Filhon Guillaume .
Abstract
The development of funded pension schemes is often presented as a solution to demographic ageing, as it would enable people to save for the future without costing future generations, ensure that long-term savings are directed towards a growth economy, reinforce the contributory – and therefore deserved – nature of retirement pensions, and guarantee better management of social funds through competition between players in the savings market. After reviewing the various advantages presented by proponents of pension capitalisation, this article seeks to assess the effects of this discourse on the reforms underway in several countries facing ageing populations, particularly in Europe, before conducting a detailed review of the observed consequences of the privatisation of pension schemes in the countries concerned and comparing these consequences with the promises presented in the first part. This comparative study concludes that, with rare exceptions due to exceptional macroeconomic situations, capitalisation is no more a solution to demographic ageing than pay-as-you-go schemes, in the sense that it always involves a present or future levy on the real economy, i.e. on wealth, mainly derived from present or future work. It also reveals the various economic, social and political biases that are likely to add to the difficulties of operating the pension system in the event of massive capitalisation in the management of the fourth social security risk.
Keywords
demographic ageing, pensions, funded schemes, privatization, reforms, social protection models
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