By Allianz

Even before the Covid-19 outbreak, societies were becoming more and more fragmented over several social fault lines: culture, education, wealth, place of residence. Many of these overlap: The cosmopolitan, well-educated, wealthy people live in (big) cities, whereas more conservative, low-skilled workers tend to live in the periphery. There is, however, one important social fault line that cuts through all these identities: the generation gap. With demographic and climate change (and now the coronavirus pandemic), the generational conflict has staged a political return after half a century. It’s easy to see why. With climate change, we have to take decisive (and costly) action now to preserve the livelihoods of the younger (and future) generations. And with demographic change, a policy skewed to today’s pensioners is not in the best interest of the younger generations who will eventually have to foot the bill. Climate as well as demographic change pitch the generations directly against each other. That’s what makes responsible climate and pension policies a political minefield. Our global pension report is aimed at shedding some light on the issue of pension policy. Is a fair bargain possible? To answer that question we have developed the comprehensive Allianz Pension Index (API), building on our previous research in the field. In fact, it has been four years since we published our last pension report. So it’s time again to take the pulse of pension systems around the world. Though some countries – notably France and Brazil – have embarked on ambitious reforms in the meantime, as a whole, in recent years, the pension topic has been eclipsed by other policies, first and foremost climate-related. That’s a pity, in our view: Preserving generational justness and equality is as important as mitigating climate change. Social resilience has more than one dimension. This is a topic that is very close to our hearts. Protecting people and securing life-long financial well-being is the purpose of Allianz’s business. Therefore we hope that our analyses and rankings of pension systems around the world help revive the public debate about the right policy mix and the roles of public and private pension providers. Although everyone seems to be transfixed with Covid-19 right now, pension policy is a topic too important to be lost in the battle against the virus. In fact, it should form an integral part of every recovery strategy: It’s key to unlocking precautionary savings and addressing growing inequalities. The stakes are high: If the looming pension crisis cannot be defused, the social fabric might become even more frayed and a further rise in populism, with all its negative consequences for economic and individual freedom, seems inevitable. Given the deteriorating demographic outlook, the window of opportunity for decisive action is closing fast. Pension reform fatigue is the last thing many countries can afford.

Get the book here