Sustainable Pensions for European Citizens: How to Close the Gap?

Living considerably longer than ever before is certainly a positive fact, but at the same time, this presents a number of challenges and opens up questions how to reserve for retirement. Projections show that there will be fewer and fewer people paying into the pensions systems to support an ever-increasing number of pensioners. People living longer and low birth rates in developed countries, paired with low interest rates, mean that there is pressure on any pensions system, as funds have to cater for much longer periods. For a number of years, the growing gap between what people perceive as what they will receive as retirement income and what they will actually receive—as well as the basic adequacy of retirement income—has been on the agenda of governments, policy makers and regulators. There have been a number of studies showing that in Europe, yet also in many other developed and developing countries, not just the pensions gap, but also the funding gap of pension funds, is increasing and will be hard to close.