is one of the OECD countries where the decline in the working-age population
will be the most drastic in relation to the number of pensioners. This is the
key message from the latest OECD
country review of Portugal’s pension system. To
put it in simple terms, there will be seven people aged over 65 for every ten
people of working age (up to 65) in 2050.
recent pension reforms – including linking the retirement age to life
expectancy – this should be reason enough to implement further reforms. The
OECD recommends that the existing sustainability factor, which currently only penalises
early retirement, should be used to adjust pension benefits across the board.
The three existing mechanisms for generating an adequate basic pension should
be merged. At the same time, means testing to children’s income should be
removed. The other recommendations found in the review are ‘standard’ and are
familiar from the EU’s policy recommendations, including promoting occupational
pension plans, the so-called second pillar.