2014 Pension Sustainability Index

Driven by unfavorable demographic developments and unsustainable, outdated or fragmented systems, pension reform has been at the top of political agendas across the globe for many years now. The reform process in the wide range of countries addressed by this survey differs considerably from country to country. This is why Allianz first introduced the Pension Sustainability Index (PSI)1, which combines the various characteristics of pension systems with the factors that influence them to help track and evaluate policy changes made in different countries around the world. In addressing the sustainability of a country’s public pension system, the PSI can give an indication of a country’s need for reforms to maintain longterm financial sustainability. This can be difficult to assess given the many country-specific institutional, technical and legal parameters. There are, however, key variables that impact on the sustainability of national pension systems regardless of a country’s distinct parameters. By taking a methodical approach to studying these dynamic variables, the PSI is able to evaluate the long-term sustainability of national pension systems and thus the pressure on governments to reform these.