Workplace-Linked Pensions for an Aging Demographic

Pensions and population aging intersect in two ways. First, demographic change threatens the sustainability of traditional pay-as-you-go social security pensions, leaving workplace-linked pensions with a greater role in retirement provision. Second, as the Baby Boom generation enters retirement, new challenges arise around its retirement support. This chapter reviews some of the implications of population aging for workplace pensions in this new environment, outlines market considerations important for workplace-related pension design for the future, and discusses how governments can create an environment supportive of workplace-related pensions, should they wish to do so. We conclude that workplace-linked retirement saving systems will be asked to do even more than in the past, given the financial stress that pay-as-you-go governmentrun Social Security plans are confronting in the face of an aging demographic. This will require further product innovation and additional research.