Comparing Public Pension Systems in Portugal, Áustria and Germany

Abstract

According to intemational reports from the European Commission, the World Bank and the OECD, most ofthe European Countries face major challenges in relation to population ageing and the employment ofolder workers. Over the coming decades, theEuropean Union will face a significant acceleration ofdemographic ageing due to the baby-boom generation reaching retirement age, continuing increases in life expectancy, and decreased fertility since the 1970s. However, all three factors combine to produce a major financial challenge for pensions Systems over the coming decades when the number ofpensioners will rapidly increase, and the size ofthe working-age population will diminish. There is a risk that the resulting increased old-age dependency ratio places an unsustainable financial burden on the active population in the future, while at the same time adversely affecting Europe’s economic growth potential.