The role of redistributive pension systems

ARZA, CAMILA; KNOX, CHARLES

Investing in an ageing world: Shifting debates from costs to investments

Helpage

Año: 2017; p. 46 - 56

Much of the debate on the future of pension systems in an ageing world has been dominated by an emphasis on the fiscal costs of population ageing. While population ageing poses real challenges to the sustainability of many pension systems, any analysis of the present and future fiscal costs of a pension system needs to be weighed against the "costs" of inadequate old-age protection. This is particularly important for assessing pensions in countries in the global South. For many of these, old-age protection systems remain underdeveloped and coverage is low and unevenly distributed. In these countries one of the key policy challenges now is how to expand old-age protection with a pension structure that is equitable and affordable to guarantee economic security in an ageing context. This can benefit older adults but can also provide a mechanism to share the costs of old age more equitably between older persons, their families and wider societies. This chapter begins by outlining the core function that pensions play in providing economic security in old age. It then moves on to explore how old age-related risks not only affect older persons themselves but also have impacts on other family members. It also highlights the relevance of old-age security for every generation and emphasises how later life outcomes are linked to experiences earlier in life.