According to this article, pension funds in the UK, the Netherlands and Germany face an “existential threat” because of their precarious financial positions:
Sven Giegold, a member of the European parliament from Germany’s Green party, called on lawmakers to abandon what he refers to as their short-sighted “ostrich-policy” approach to pension scheme funding.
His comments come in response to the results of the first stress tests of pension funds in 17 European countries by Europe’s top pension regulator.
The results show that pension schemes across these countries could face a combined funding shortfall of €773bn if confronted with a significant financial shock that triggered a further fall in interest rates and a rise in inflation.
On the other hand, Scandinavian countries seem to be in a better situation:
All four countries have also been carrying out reforms of their pension systems years in advance of many other developed economies. In addition to policies aimed at increasing the age at which workerscan retire and encouraging private pensions (central planks of pension reforms in many other countries), the Nordic countries have for several years been focusing on adjustments to the way their pension systems are funded. As mentioned above, Norway is using its oil and gas revenues to build up funds in the GPF-G. In the 1990s, Sweden reformed its pension system away from an expensive defined-benefit system to a defined-contribution system in order to contain costs amid concerns that the former system would be unsustainable as the population aged. Finland and Denmark have also accumulated large pension assets; according to the OECD these represented 75% and 49.7% of GDP in 2011, respectively. In the case of Denmark the current basic state pension is gradually being reduced in importance relative to a savings-based pension. Finland also has a combination of a basic state pension and a more dominant statutory earnings-related pension, and will be pursuing additional pension reforms in the next two years. These systems compare with the largely pay-as-you-go systems – viewed as unsustainable amid ageing populations – still in place in most other advanced economies.
Question: Are UK, the Netherlands and Germany considering pension fund reformation? Maybe using some of the methods that seem successful in the Northern countries?