The Global Retirement Crisis

Over the next few decades, the rapid aging of populations in Europe, Japan, and North America threatens the stability of the world’s major economies. A determined push for reform can still avert fiscal and economic crisis. But the time for corrective action is running out. And the problem is worse than is generally assumed.These are the conclusions of “The Global Retirement Crisis: The Threat to World Stability and What to Do About It”, a new report jointly sponsored by Citigroup’s Global Investment Management and Private Banking Group and the Center for Strategic and International Studies (CSIS), a Washington–based think tank. The report finds that overly optimistic projections by the European Commission and the Organization for Economic Cooperation and Development may greatly underestimate future growth in government retirement spending. It stresses the importance of boosting productivity, extending work lives, and developing funded alternatives to pay–as–you–go pension systems. Along the way, it takes the reader on a “world tour” that describes what individual countries have already accomplished, and what remains to be done.Excerpts from the report are reproduced below. The end report is available at www.csis.com/gai/. The Geneva Papers on Risk and Insurance (2002) 27, 486–511. doi:10.1111/1468-0440.00187