Whoever starts working today will go retired at age 71. Word of OECD (Organization for Economic Cooperation and Development) which, taking stock of European pension systems, compared the current situations and the future development of social security systems.
And while in Italy pension reforms are always on the agenda, with the farewell to Quota percent and the shift beyond the retirement pension starting from 2022 (and then gradually returning to the 67 of the Fornero reform) to the new generations the goal will be even further away.
For the generation that is now entering the world of work, retirement will reach 71 years, an age among the highest in all OECD countries, second only to Danish workers and in the company of Estonians and the Netherlands. To photograph the situation and illustrate the future scenario, it is the new OECD report on the pension system that starts from the consideration of how in the last two years the dramatic impact of the pandemic has been absorbed in the OECD countries that have protected pensioners and the right to future pensions.
Currently, however, the retirement age in Italy is below the average, 61.8 years against 63 as a result of a series of measures, which – starting from Quota 100 – have allowed an early exit from the labor market in recent years. A system that still provides various possibilities for early retirement: from the female option to the expansion contract.
Early exits pay “dearly”, given that in 2019 Italy’s public pension expenditure ranked second among the highest in OECD countries, equal to 15.4% of GDP. Quota 100 in fact made it possible to retire at 62, that is to say five years earlier than the retirement age provided for by law, having paid 38 years of contributions. An exception foreseen in addition to Italy, only in Spain with less than 40 years of contributions, with Belgium requiring 42 years, France 41.5 years and Germany 45 years.
In 2020 the average retirement age among the most others is a 67 years in countries like Norway and Iceland and the lowest in Turkey (52 years).
But beyond the Italian case, the pension challenge of the coming decades will be for everyone to maintain a sustainable system in the face of an aging population. The working-age population is projected to decline by more than a quarter by 2060 in most countries in Southern, Central and Eastern Europe, as well as in Japan and Korea and “putting pension systems on solid foundations – underlines the OECD – in the future will require painful political decisions”.
Suffice it to say that on average in the OECD, people over the age of 65 receive 88% of the income of the total population. People over the age of 65 currently receive around 70% or less of the median disposable income in Estonia, Korea, Latvia and Lithuania and around 100% or more in Costa Rica, France, Israel, Italy, Luxembourg and Portugal. Generally, based on the various interventions of different countries, the normal retirement age will increase by about two years on average across the OECD by the mid-2060s: the average future retirement age will be 66 years with women remaining a lower normal retirement age than men in some countries: Colombia, Hungary, Israel, Poland and Switzerland.
In Italy retirement will be reached at 71 as a result of the regime introduced in 1995 which adjusts pension benefits to life expectancy and growth and will only be fully effective around 2040. And in our country the need for a balance between the aging of the population employment growth will be crucial: in fact, in 2050 there will be 74 people aged 65 or over for every 100 people between the ages of 20 and 64, one of the highest OECD ratios. Over the past 20 years, employment growth, including through longer careers, has offset more than half of the pressure of demographic aging on pension spending, which however increased by 2.2% of GDP between 2000 and 2017. That employment grows for future retirement will therefore be particularly important. In any case, the system will not be able to remedy the profound disparities between the different treatments: for self-employed workers, a future is expected with pensions lower than 30% compared to those of an employee with the same contribution seniority, against an OECD average of 25%.
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