Pension entitlements are calculated using the OECD pension models. The theoretical calculations are based on national parameters and rules that apply in 2018. They relate to workers entering the labour market in 2018 at the age of 22 and include the full impact of pension reforms that have been legislated and are being phased in. A note on the methodology used and assumptions made precedes the pension indicators.
The indicators begin with the gross pension replacement rate in mandatory pension schemes: the ratio of pensions to individual earnings. Thereafter follows an analysis of the impact of changing the entry age from 20 to 22. The second shows the replacement rates for mandatory and voluntary pension schemes where these schemes have broad coverage. Thereafter follows an analysis of the tax treatment of pensions and pensioners. The fourth and fifth indicators show the net replacement rates, taking account of taxes and contributions. After this follows two indicators of pension wealth: the lifetime discounted value of the flow of retirement benefits. This indicator also takes into account the retirement age, indexation of benefits, and life expectancy. The pension wealth indicator is presented in gross and net terms. There then follows an indicator showing pension entitlements for couples compared to a single worker. Finally there are two indicators showing the impact of career breaks for childcare and unemployment on total pension entitlements.