The future of multi-pillar pension systems

This paper takes stock of the evolution in pension systems and the challenges that remain for the future. It derives a typology of pension systems and uses this to discuss the strengths and weaknesses of alternative systems. After describing how pension systems in the industrial world have been facing similar challenges, this paper argues that pension contracts in various countries have developed in similar directions. In observing that the way that pensions are organized still differs substantially between countries, the paper discusses that this international heterogeneity is likely to remain in the future. A unique answer to what is the optimal pension system apparently does not exist; several alternative solutions exist alongside each other, depending on the specific historical, political and institutional context of each country.