Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Retirement Income Conference
    • 2022 Managing Pension Risk & Liabilities
    • 2022 WorldPensionSummit
Breadcrumb
  1. Home
  2. Online
January 28, 2009 12:00 AM

Populations and pensions

Demographics key for retirement reforms

Isabelle Clary
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    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 firm’s 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.

    Older Western economies in tougher shape

    The report is less optimistic about the pension outlook for the second group, which mostly include older Western economies with less supportive demographics and less well-funded pension systems. “The old-age dependency ratio, which is driven by decreasing fertility and increasing life expectancy, will worsen significantly over the next decades,” in those countries it said.

    The U.S. has a more favorable ratio of older to younger workers. Nevertheless, that ratio is on an upward trend that shows a deterioration of pension funding as baby boomers prepare to retire, the report noted.

    The old-age dependency ratio in the U.S. now is 18 people older than age 65 for every 100 working-age adults. That will climb to 34 by 2050, “which is less than half of what other industrialized countries are expected to face,” the report said. In Japan, for example, the old-age dependency ratio is projected to be 74 by 2050, while in Western Europe it is forecast at 52.

    Based on United Nations data, the Allianz report projected that the potential U.S. work force will peak in 2010 and decline thereafter, and the U.S. old-age dependency ratio is expected to outnumber child dependency for the first time ever in 2030. As the U.S. population grows to an estimated 402 million in 2050 from 300 million now, the median age for the population will rise to 41.1 from 36.

    Australia, Sweden and the United Kingdom have the best pension outlook, while the U.S. ranks No. 4. At the other end of the scale are Italy, Japan and China, according to the pension reform pressure gauge developed by Allianz Dresdner Economic Research.

    “Australia is under the least pressure to reform its pension system, as the system is comprehensive in nature and based on a strong funded and mandatory occupational pension pillar, the superannuation scheme. China, on the other hand, is in the most need of reform as the overall pension coverage is still poor, and Japan has one of the fastest aging populations in the world,” analysts wrote to underscore the disparity among the pension systems.

    Recommended for You
    Happy Fourth of July greeting
    No P&I Daily for Independence Day holiday
    Juneteenth_1550_i.jpg
    No P&I Daily on Juneteenth
    No P&I Daily on Memorial Day
    No P&I Daily on Memorial Day
    Emerging Markets: A Selective Approach
    Sponsored Content: Emerging Markets: A Selective Approach

    Reader Poll

    June 6, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Nearing the finish line: Ideas on end-state investing for corporate DB plans
    The Meaning of "Portfolio Intelligence"
    Credit Indices: Closing the Fixed Income Evolutionary Gap
    Forever in Style: Benchmarking with the Morningstar® Broad Style Indexes℠
    Crossroads: Politics, Inflation, & Bonds
    Is there a mid-cap gap in your DC plan?
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    June 20, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Retirement Income Conference
      • 2022 Managing Pension Risk & Liabilities
      • 2022 WorldPensionSummit