Editorial
Promdevelop editorial team
Conducted statistical observations and sociological studies indicate a steady trend of increasing life expectancy in civilized countries.
A gradual process of “aging” is taking place - the proportion of the working-age population in comparison with older people is falling, creating the threat of a crisis in pension payments. In this regard, most countries of the world are softly or harshly reforming the social security system, aimed at increasing the share of provision of the funded part of the pension and increasing the retirement age .
What types of pension systems exist in the world and their features
Only in economically developed countries have pension systems been created and are functioning. By type, direction and source of formation, there are several main models of pension provision:
Cumulative-solidarity
It is successfully used in countries with a high level of private capital (USA, Germany). Only a fifth of the future pension is formed from savings in state pension funds. Contributions to government funds amount to slightly more than 10 percent. The remaining share is formed through contributions to non-state funds of employer companies and future retirees themselves. The stable economy and high incomes of these countries allow older people to be confident in the safety of their savings until retirement age, travel the world, and not experience financial difficulties. In fact, ordinary Americans regularly receive a pension from three sources - $1,100 each from the state and employer funds and twice as much from personal savings;
Solidarity-cumulative
Used in the Russian Federation, CIS countries, Poland. It is also formed from three parts, but with a clear predominance of the state’s share. Of the total amount of pension contributions (22% of the employee’s taxable income), the basic 6% forms an impersonal joint part and is sent to the budget, 10% is reflected on the citizen’s personal account as the state’s insurance share, 6% is the funded part, which the future pensioner at his own discretion can be stored in both state and non-state pension funds. The unstable financial situation in the CIS countries and insufficient protection of private savings do not provide confidence in receiving sufficient funds for living upon reaching retirement age, so up to 40 percent of older people are forced to continue working after receiving a pension. The state pension ranges from 10 to 20 thousand rubles monthly, the funded pension adds 1-2 thousand or is not paid;
Savings and insurance
This type of savings is documented, for example, in Ukraine - the solidary state part in it is up to 30 percent, the insurance part is up to 10%, and the funded part is 60%. In fact, mandatory contributions to the state pension fund amount to more than 30% and are the only source of financing. Due to instability and distrust of citizens in government bodies, the funded portion is not formed and not paid.
Kazakhstan, Mexico, and Chile use exclusively the funded pension system, depriving pensioners of state social guarantees.
Many countries have individual pension features. In Denmark, pensioners have the right to receive a basic (provided they have lived in the country for at least 3 years of working age) and an additional pension.
The basic social retirement pension after 40 years of residence is (converted) US$900 per month. For every year less than forty, its size decreases proportionally. The neediest citizens of retirement age are paid a targeted additional pension of $100 per month.
The funded pension part is formed at several levels:
- Mandatory state program of the Asia-Pacific region;
- For corporate pension programs (by types of companies and industries).
Total contributions to pension funds amount to over a third of wages, but they provide the security and safety of a full package of benefits upon retirement.
In African countries
In many African countries, pensions are simply not available. There is no pension system as such, and most citizens can rely only on their own strength, working throughout their lives for the benefit of the economy of agricultural countries.
According to the International Labor Organization, about 20-25% of Africans receive pensions . For example, the pension system in Angola is more or less developed, where there are a large number of state and non-state funds, as well as banks, which make it possible to preserve and increase the pension capital of local residents.
What is the retirement age, pension size and life expectancy in different countries?
The situation with the living conditions and provision of pensioners in the world is presented in comparative table 1 for retirement age in different countries of the world for 2021.
| The name of the country | Retirement age - Men | Retirement age - Women | average life expectancy | Average pension in US dollars |
| Australia | 67 | 67 | 82 | 2000 |
| Argentina | 65 | 60 | 80 | 100 |
| Kazakhstan | 63 | 58,5 | 72 | 200 |
| Canada | 65 | 65 | 81 | 670 |
| New Zealand | 65 | 60 | 82 | 2000 |
| Russia | 60 | 55 | 71 | 170 |
| Singapore | 62 | 62 | 83 | 300 |
| USA | 67 | 67 | 79 | 1100 |
| Japan | 65 | 65 | 83 | 700 |
Information indicates a high level of pension provision and life expectancy in the leading countries of the world economy. The so-called “survival age” (the difference between life expectancy and retirement age) exceeds 15 years in them. But this growth creates a constant requirement for improvement of the social security system. Stability and order in the storage of pension savings (state and corporate) allows us to guarantee payments to people of advanced age. Otherwise, a gradual increase in the retirement age in the world will be required. As can be seen from the table, the retirement age in different countries as of 2021 is quite high - from 65 to 67 years.
Retirement age and living conditions in European countries in 2021 are presented in Table 2.
| The name of the country | Retirement age - Men | Retirement age - Women | average life expectancy | Average pension in US dollars |
| Austria | 65 | 60 | 81 | 2000 |
| Azerbaijan | 63,5 | 60,5 | 71 | 110 |
| Armenia | 63 | 63 | 75 | 90 |
| Belarus | 61 | 56 | 71 | 150 |
| Belgium | 65 | 65 | 81 | 1400 |
| Bulgaria | 64 | 61 | 74 | 300 |
| Great Britain | 65 | 65 | 81 | 2000 |
| Hungary | 62 | 62 | 75 | 400 |
| Germany | 65,5 | 65,5 | 81 | 1300 |
| Georgia | 65 | 60 | 75 | 60 |
| Denmark | 67 | 67 | 80 | 2300 |
| Israel | 67 | 62 | 82 | 1500 |
| Iceland | 67 | 67 | 82 | 1500 |
| Spain | 65 | 65 | 82 | 1100 |
| Italy | 66 years 7 months | 66 years 7 months | 83 | 1400 |
| Norway | 67 | 67 | 82 | 2500 |
| Serbia | 63 | 58 | 72 | 240 |
| Romania | 63 | 58 | 75 | 120 |
| Ukraine | 60 | 58,5 | 71 | 80 |
| France | 62,5 | 62,5 | 82 | 1100 |
| Switzerland | 65 | 64 | 83 | 3000 |
A comparative table of retirement ages in other countries shows that the former republics of the Soviet Union are still significantly behind developed European countries in the social security of older people and are trying to improve the situation with pension reforms, often reduced to a simple increase in the retirement age. For example, what are the pros and cons of raising the retirement age in Russia?
The retirement age in European countries is high, but pensions are much larger and living conditions are better.
Which country has the lowest retirement age? Some CIS countries still have the lowest retirement age in the world, set in the USSR - 60 years for men and 55 years for women (Russia, Uzbekistan).
In Canada
In Canada, all residents of the country who have lived there for at least 10 years after reaching adulthood are paid an old age pension (The Old Age Security). It is paid to almost everyone without exception, and its size almost does not depend on accumulated experience and other conventions that are relied on in other countries.
The maximum OAS amount is about $500 per month. At the same time, although it is taxed, its amount is revised four times a year in order to protect the income of pensioners from inflation. It forms the basis for other types of pensions.
For example, non-working pensioners or those receiving low incomes are entitled to receive a federal guaranteed income supplement, the amount of which depends both on the income of the citizens themselves and on the income of their husbands/wives. Usually it is no more than $800.
In Canada, as in Russia, deferring retirement up to five years guarantees a gradual increase of 0.6%. Thus, until you need your pension, it grows without your direct participation.
Canadians can afford to retire later than expected, with an average life expectancy of 82 years and an expected retirement age of 65 years.
What are the current trends in the development of pension systems and raising the retirement age?
In the USA, Canada, Australia, and developed European countries, in addition to mandatory government contributions, future retirees accumulate additional pensions in their large companies and corporations.
Israel also has a successful two-tier pension system. In addition to the state pension, every citizen accumulates funds in the social insurance fund through personal contributions during the working period and employer contributions.
In France, the main share of pensions comes from the pay-as-you-go system. The size of the pension largely depends on the length of service.
Pension in Denmark for 2021
This state is interesting because it is here that they pay the maximum salaries in old age.
The average salary is 2800 euros, which in our currency equals 225 thousand. This amount seems incredible for the average Russian. Denmark is considered the best place for older people, because everything is focused on comfort for this segment of the population. The working Dane often lives in worse conditions.
This was only government support, but many people also accumulate savings in non-state pension funds during their working lives, which increases income in old age. Even nursing homes are paid for by the state, and not by relatives or the pensioner himself.
What countries promise their citizens regarding raising the retirement age
A gradual “soft” increase in the retirement age in connection with the constant increase in life expectancy of citizens is planned in many countries:
- in France up to 67 years of age (project until 2023);
- in the UK - 66 years, starting from 2021, 67 - from 2026;
- in Germany – 67 years – until 2029;
- in Holland, from the beginning of 2021, the retirement age has been increased to 68 years;
- The Swedish government is pushing to raise the retirement age to 75, the highest retirement age in the world.
Brazil recently had the lowest retirement age in the world at 54, but in 2021 it has been raised to 65 for men and 62 for women.
Pension in Germany for 2021
One of the most worthy pension systems is the German one. Of course, the standard of living in Germany and Russia is strikingly different, but still it is impossible not to compare.
Retirement age varies significantly. The threshold for men and women is the same, so Germans and Germans go on holiday at 67 years old. There is a significant difference with the existing threshold in the Russian Federation, but the situation in Germany is not overshadowed by the same. Citizens can receive security earlier if they pay the state the missing interest from their own savings, which equates to approximately 0.3% of income for each month.
Groups of citizens who are entitled to a salary:
- Persons who have reached the required age;
- People with disabilities;
- People who have lost their breadwinner.
The pension in Germany is calculated using a certain formula: Amount = EP*ZF*AR*RF. Explanation of values:
- EP - Points that the insured citizen has accumulated (approximately 1 point per year if deductions fall under the category of average contributions for the country);
- ZF - This parameter depends on the age at which the person retired (if within the period established by the country, then 1 point, if earlier, then the value decreases, if more, then increases);
- AR - Price per point, but this indicator is not stable, because directly depends on the economic situation;
- RF - Type of pension (if monthly maintenance is assigned due to old age or disability, it is equal to 1, and for those who have lost a breadwinner and persons with partial legal capacity - 0.6 and 0.5).
An interesting fact worth noting is that old age benefits are significantly different for women and men. Men get more. The average benefit in the country is:
- For men - 1040 euros, which when converted into Russian currency today is 83,771.79 rubles.
- For women - 580 euros, which is equivalent to 46,718.88 rubles.
The size of pensioners' salaries speaks volumes about the level of the German economy. The state can allocate a good amount of funds that can provide its citizens with a dignified old age.
Interesting facts about pensions
- Slovakia applies a “floating” retirement age from 62 years. Moreover, the size of the pension depends on the length of service (minimum - 15 years and the amount of insurance contributions).
- China is having great difficulty providing for the elderly. Pensions are received only by former civil servants and factory workers with at least 15 years of work experience and mandatory contributions of 11% of their salary. The rural population is deprived of this opportunity.
- In Finland, the share of pensioners is almost a fifth. The pension amount exceeds $1,700, but they are eager to work longer, since the state provides for quarterly increases in pensions starting in 2021.
IN THE USA
The US pension system has long been overgrown with a large number of myths. Some believe that pensions in the west of the country are prohibitively high, others believe that even a huge (relative to ours) pension barely exceeds the subsistence level. Its average value for specialists is ~$1500.
Americans retire at age 67, regardless of gender , and their average life expectancy is 78.6 years. At the same time, the survival rate is constantly decreasing.
In the USA, as in many other countries, pensions are formed through contributions to the Pension Fund - both the working citizens themselves and the state are required to make them for them in a 50/50 ratio.
Along with this, voluntary pension insurance funds are also popular - public and private, created so that every American has the opportunity to accumulate a sometimes very impressive increase to their basic pension.
This is a kind of analogue of a Russian savings account - pensions are indexed annually and allow you to receive even more in the future than you actually saved.
Will the authorities be able to change the ratio?
Raising the retirement age in 2021 was called perhaps the only way to preserve the pension system (however, literally six months before this, everything was in order with this system). Now the numbers show it has had some effect
, and for every person of retirement age there are approximately 2.3 people of working age.
However, it is worth considering the fact that statistics do not show everything:
- Of people of working age, not all of them work, and of those who work, they do not do so officially (that is, they pay taxes and insurance premiums);
- Almost all people of retirement age have the right to a pension. Now this requires 12 years of experience and 21 pension points, but thanks to the ability to include non-insurance periods, almost everyone who has lived to retirement age can retire;
- approximately 9 million retirees continue to work and pay insurance premiums.
If we take all this into account, then in Russia there are about 1.9 working citizens for every pensioner. And taking into account the average monthly salary of 49,500 rubles, it turns out that for each pensioner there are about 20.7 thousand rubles in insurance premiums
. Alas, average pensions are much smaller - those officially employed include individual entrepreneurs who make fixed contributions (about 30 thousand rubles per year), the self-employed (who may not pay them at all), as well as security forces (who have a completely independent pension system).
On the other hand, it is necessary to take into account the ILO recommendations - according to them, a pension should replace 40 percent of a person’s average income
. 40% of the average salary is almost 20 thousand rubles. Of course, such pensions exist, but the average payment is about 15 thousand rubles, while a huge number of pensioners live on the subsistence level (about 10-11 thousand rubles).
And in order to fulfill this requirement, it will be necessary to rebuild the entire pension system, because the current system with points allows at best to replace 30% (according to official estimates - 29.8%). Accordingly, when a person retires, he immediately begins to receive 3 times less - which is very noticeable.
When raising the retirement age by 5 years was discussed in Russia, the forecasts were optimistic - it turned out that for every pensioner there would be more than 5 working Russians
. Now, after the start of the reform, the forecasts are much more modest - in 2030 there will be 3 workers per pensioner in the country. Of course, this is better than the current 2.3, but it is also unlikely to bring pensions to a decent level.
And the main problem here is not the aging population (which is happening all over the world), but an insufficiently efficient economy
. If the current level of labor productivity allows you to pay a pension in the amount of only 30% of your salary, reforming the pension system alone is definitely not enough.
Great Britain
The population is more than 64 million 700 thousand people; the country is characterized by zero natural growth. There are 15.8% pensioners here, or more than 10 million people. British men live on average 79.5 years, women - 83 years. Both retire at age 65, but women can become pensioners as early as 60 if they were born before 1950. Thus, British pensioners live 20-23 years.
Pension payments in the UK are multi-stage: the first level is the state pension, which is paid to everyone without exception who has reached retirement age, the second level is the funded part, which is paid by the state or a private fund. State pension - over 600 pounds, the funded part can vary greatly. The final average pension is more than £1,500.
Pension in Japan for 2021
Residents of the Land of the Rising Sun receive an average of 166,022 Japanese yen, which in our currency equates to approximately 103 thousand. A good payment that allows you to provide a comfortable standard of living, including funds for entertainment.
In Japan, the threshold is the same for both genders. He is 65 years old. However, there is a nuance that allows you to leave earlier. The system of the United States comes to mind because the same principle applies here. The salary is reduced by 25%, but, unlike the United States, there is a chance to return 100% of the salary if you continue to work and receive funds from the state.
For comparison, a table with data from some other countries for the current year is provided.
A country | Local currency | How much in rubles |
| Austria | 2,260 euros | 181 899,27 |
| Greece | 850 euros | 68 405,57 |
| Israel | 6,800 shekels | 131 277,78 |
| Spain | 908 euros | 72 415,90 |
| Italy | 1000 euros | 80462,90 |
| Iran | 4410000 Ir. rials | 7 249,31 |
| Korea | 204950 cor. over there | 12643, 45 |
| Poland | 380 euros | 30572,89 |
| Turkish Republic | 500 tour. lire | 5257,44 |
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Health level of older people
Health Rating
Includes a person's life expectancy after age 60. Unfortunately, according to this indicator, Russians are significantly inferior to pensioners from our sample of countries. The life expectancy of a person after 60 years in Russia is only 17 years, and in France - 25 years. The highest healthy life expectancy was again recorded in France - 18.8 years.
