Regional demographic trends are the single most important factor to pension reform around the globe, according to a research paper by analysts at Munich-based Allianz Global Investors AG.
Pension reform in different parts of the world faces distinctly different challenges, with demography being a primary driver, the Allianz experts wrote in Retirement at Risk: The U.S. Pension System in Transition.
The asset management firms parent, Allianz SE, is a management holding company for a group of money managers that include Pacific Investment Management Co. LLC, Oppenheimer Capital LLC, NFJ Investment Group LP and Nicholas-Applegate Capital Management LLC.
Allianz analysts identified three different groups worldwide: emerging and developing countries either setting up pension systems or with systems created only recently; industrialized Western countries with mature pension systems; and other industrialized economies that are comparatively better funded.
Australia, Canada and the U.S. are part of the third group, which is the best situated, the report said. Not only do their pension systems feature strong, funded pension pillars, but as traditional immigration countries, they will be less affected by the coming demographic challenges. Positive net immigration to the U.S. will keep the population growing, if at a decreasing rate, which will help ensure that young workers keep on funding pension systems.