Slovenia should reform its pension system to address rapidly ageing population, says OECD
Slovenia should encourage people to work longer and reform its pensions system in order to make it financially sustainable while preserving pensioners’ living standards, according to a new OECD report.
OECD Reviews of Pension Systems: Slovenia says that population ageing has started to accelerate and is projected to increase rapidly until the mid-2050s, driven by health improvements at older ages and low fertility rates over the past several decades.
Under current rules, public pension expenditure is projected to increase sharply from 10.0% to 15.7% of GDP between 2019 and 2050. As a result, only Italy would then have a higher expenditure ratio in 2050, at 16.2%, while in the European Union it would increase from 11.6% to 12.6% on average. Such high pension expenditure would lead to steep increases in tax or contribution rates, or public savings in other areas, which could be avoided by a significant and timely pension reform.
Today, old-age income inequality is much lower in Slovenia than in most OECD countries, while relative income poverty rates among older people are similar to the OECD average. However, employment after age 60 is very low, with only 25% of Slovenians aged 60 to 64 in employment in 2019, half the OECD average.
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