Asset managers warn Europe’s pensions are its ‘next sovereign debt crisis
The United Nations Population Fund announced yesterday 11% of the world’s population is over 60 years old, and within a decade there will be one billion in these ranks, and two billion by 2050.
For those who have helped improved living standards and developed healthcare advances, this is of course heartening.
For those wondering about the future finances of their communities and families, it is concerning, if not vaguely terrifying.
The UN noted life expectancy at birth is over 80 now in 33 countries, while just five years ago only 19 countries had reached this. “Many of those reading this report will live into their 80s, 90s, and even 100s.”
At present, only Japan has an older population of more than 30%. By 2050, 64 countries are expected to join Japan.
The UN put economic security for such people at the top of its suggested priorities for governments and societies “because this, together with health, is most frequently mentioned by older persons themselves.
“These issues are also among the greatest challenges for governments faced with ageing populations. The global economic crisis has exacerbated the financial pressure to ensure both economic security and access to healthcare in old age.”
The UN said the “”Sustainability of [pension] systems is of particular concern, particularly in developed countries, while social protection and old-age pension coverage remain a challenge for developing countries, where a large proportion of the labour force is found in the informal sector.”
Only one third of countries have comprehensive social protection schemes,
it noted, adding most only cover those formally employed, “or less
than half of the economically active population worldwide”.
Such concerns, and how to address them, were the topic of a discussion by asset management CEOs, at Fund Forum held in Monte Carlo in June.