OECD urges wider use of asset-backed pensions to secure retirement incomes | Report

Governments should expand the use of asset-backed pensions to help workers achieve adequate retirement incomes, even as public spending on pensions keeps rising across member countries, according to a press release issued by the Organisation for Economic Co-operation and Development (OECD) on 4 November 2026. The new Pensions Outlook 2026: Are We Saving Enough for Retirement? argues that pension funds are increasingly vital to complement pay-as-you-go systems. Despite rapid growth in pension assets, the report warns that many individuals are not saving enough. The OECD calls on governments to address the barriers that prevent sufficient contributions. The findings set out a clear policy path to strengthen the resilience of retirement systems.

Asset-backed pensions have expanded substantially over the past two decades, complementing traditional pay-as-you-go schemes. According to the report, pension fund assets reached USD 78 trillion at the end of 2025, equivalent to 106% of OECD GDP. This marks a notable increase from just 62% in 2001. The expansion has been driven by higher contributions, positive investment returns and relatively low pension benefit payments in many countries. The growth highlights the rising importance of pension assets in the economy.

Nearly all OECD countries now face a retirement contribution gap, meaning workers must complement their mandatory pensions with voluntary contributions. This gap is 10% or more for male employees on average earnings in 17 of the 41 countries covered. Women face a larger gap than men in 17 countries, and the self-employed face a larger gap than employees in 31 countries. In half of the countries studied, the contribution gap is largest for high earners, while in 12 countries low earners need to contribute the most. Overall growth also masks wide disparities between nations.

While eight OECD countries have pension assets that exceed their GDP, in 17 others pension assets stand below 20% of GDP.

“Even as public spending on pensions across the OECD keeps rising, many workers are not on track for an adequate retirement income,” OECD Secretary-General Mathias Cormann said. “Asset-backed pensions will help fill the gap. But too many people are not in a plan, start too late or save too little. Automatic enrolment, contributions that rise with pay, smarter investment strategies and sound governance can change that.”

The report recommends several measures to close the contribution gap, including:

• Increasing mandatory contributions and encouraging voluntary employer contributions.
• Nudging individuals toward higher contributions and providing financial incentives.
• Improving financial literacy and regulating financial advice carefully.
• Promoting harmonisation of sustainability disclosure requirements for investors.
• Ensuring that taxation of death-related payments does not undermine the role of pensions in financing retirement.