Demographic developments are unfavourable for the financing of pension schemes in most OECD
countries, implying continued growth in pension expenditure in virtually all OECD countries. This paper
examines the vulnerability of pension systems, with an emphasis on financial sustainability and adequacy.
Policy trade-offs and complementarities are reviewed and flanking policies which could underpin
successful pension reforms are examined. Automatic adjustment mechanisms are highlighted, as are the
roles of prudential regulation and buffer or reserve funds in the case of shocks. Pension system
vulnerability indicators are presented for all OECD countries, and the challenges and vulnerabilities of
pensions systems in the BRIICS countries are reviewed.
