Governments need to make greater use of asset-backed pensions to support adequate retirement incomes, the Organisation for Economic Co-operation and Development (OECD) has argued.
Its Pension Outlook 2026: Are We Saving Enough for Retirement? report noted that while asset-backed pensions had expanded significantly over the past two decades, governments needed to do more to promote the use of pension funds to meet retirement challenges.
The report showed that OECD country pension fund assets reached USD 78trn at the end of 2025, equivalent to 106 per cent of OECD GDP, up from 62 per cent in 2001.
This expansion was driven by higher contributions, positive investment returns, and relatively low pension benefit payments in many nations.
However, the OECD warned that people may not be saving enough to provide for an adequate retirement income, despite the growth in pension assets.
Almost all OECD countries were facing a pension contribution gap, with workers needing to supplement their mandatory pensions with voluntary contributions.
This gap was 10 per cent or higher for male workers on average in 17 of the 41 countries assessed, while women faced a larger gap than men in 17 countries, and the self-employed had a greater gap in 31 countries.
In half of the countries covered, the contribution gap was largest for high earners, while in 12 countries low earners needed to contribute the most.
The report highlighted geographical disparities, as while eight countries had pension assets that exceeded their GDP, 17 had pension assets below 20 per cent of GDP.
The OECD sought to outline a path for governments to tackle the barriers preventing people from making sufficient contributions.
Recommended policies included increasing mandatory contributions, encouraging voluntary employer contributions, nudging individuals towards higher contributions, providing financial incentives, improving financial literacy, and addressing the specific needs of individuals.
Furthermore, governments were urged to ensure financial advice was carefully regulated through measures such as registration and qualification requirements, due diligence standards, and disclosure requirements.
Additionally, the OECD argued that promoting harmonisation in regulatory requirements would help pension and insurance investors integrate risks to the sustainability of their portfolios in investment processes and decisions.
Governments were also encouraged to ensure that the taxation of death-related payments did not undermine the primary role of asset-backed pension systems in financing retirement income.
“Even as public spending on pensions across the OECD keeps rising, many workers are not on track for an adequate retirement income,” said OECD secretary-general, Mathias Cormann.
“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.”








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