Full residence‑based basic pensions require at least 40 years of residence in the country in six of the nine countries. Most countries with contribution-based basic pensions require at least ten years of contribution to be eligible to any benefit. Minimum contributory pensions on average require 31 years for a full benefit. Partial benefits are available in France and Switzerland when any payment has been made to the pension system. At least 15 years are required in other OECD countries. Price indexation is the most common approach for first-tier benefits.
Pensions at a Glance 2025
OECD and G20 Indicators
Residence‑based basic pensions
The underlying assumption for the modelling is that individuals are residents of the country throughout their working lives. However, in the nine countries with residence‑based basic pensions the future benefit level is often pro-rated when residency periods are shorter. For example, in the Netherlands, the basic benefit accrues at 2% of the full value for each year a worker lives or works in the Netherlands. In Canada, Denmark, Greece, Iceland and Norway, 40 years of residence gives entitlement to the full benefit. Reduced benefits are possible with at least one year of residency in Denmark, three years in Iceland, five years in Norway, ten years in Canada and 15 years in Greece. In both Israel and Mexico nationals are fully covered with minimum residency periods of 5 and 25 years required for non-nationals.
Contribution-based basic pensions
The full rates of contribution-based pensions described in the previous indicator are only applicable after full eligibility. In most countries with such systems, partial eligibility is achieved after much shorter careers. For example, while full entitlement to the contribution-based basic pension is achieved after 40 years in Canada, Japan and Luxembourg, only 10 years of contribution are required for eligibility for a reduced benefit (Figure 3.4). On average across the ten OECD countries that have contribution-based basic pensions 34 years are required for a full pension and 13 years for initial eligibility. In Chile the newly introduced basic benefit requires 25 years of contribution for the full benefit but a partial benefit is paid with one year of contributions. In Lithuania, the period for the full benefit is increasing. In Argentina and Czechia 30 and 35 years respectively are required for eligibility. No other OECD or G20 country requires more than 15 years. Residence‑based basic pensions also have proportionally reduced benefits in many countries.
Minimum contributory pensions
Minimum contributory pensions are much more widespread than contribution-based basic pensions. In 8 of the 19 countries that have minimum contributory pensions there is one single value of benefit payable after reaching the minimum eligibility criteria. In the other nine countries higher rates of minimum pension are paid for longer contribution periods. On average 18 years of contribution are required for eligibility to a minimum contributory pension. On average 31 years are required for the full pension. In France and Switzerland, any period of contribution gives entitlement to a minimum contributory pension, while over 40 years are required for the full benefit. In Latvia and the Slovak Republic, the minimum contributory pension is achieved after 15 and 30 years, respectively, but, in both countries, there is no explicit maximum duration as every year of contribution increases the benefit. Full pensions are achieved with 25 years of contributions or fewer in Chile, Colombia, Costa Rica, Hungary, Italy, Mexico, Poland, Slovenia and Türkiye. For the G20 countries full benefits are paid after only 10 years of contributions in India and 15 years in Indonesia, but the other countries require at least 30 years.
Indexation
On top of eligibility for a basic, targeted or minimum contributory pension and the benefit levels, the way first-tier pensions are indexed during retirement plays a key role for their effectiveness in the fight against old-age poverty. If benefits are indexed to wages, as is the case for the basic and safety-net benefits in Denmark, for example, then they will hold their value relative to average wages throughout the retirement period, decreasing future poverty risks and maintaining the relative standard of living of the retiree. However, indexing first-tier benefits to wage growth is rare across OECD countries (Table 3.3). Price indexation is a much more common approach, which means that during normal times of positive real-wage growth, fuelled by productivity gains, the relative value of the benefit tends to decline over time. Beyond benefits already in payment, price indexation also reduces future eligibility thresholds for targeted benefits relative to wages, which is likely to reduce the number of individuals or households that will be initially eligible.
Further reading
OECD (2023), Pensions at a Glance 2023: OECD and G20 Indicators, OECD Publishing, Paris, https://doi.org/10.1787/678055dd-en.
Number of years required for initial eligibility and for full contribution-based basic pensions
Note: *Subject to transitional rules for current retirees, based on a person’s National Insurance record.
Source: See “Country Profiles” available at http://oe.cd/pag.
Number of years required for initial eligibility and for full minimum contributory pensions
Note: In Latvia and the Slovak Republic there is no explicit maximum duration so the full career length to normal retirement age is shown. Those retiring in 2024 in France only need 41.75 years of contributions for the full benefit.
Source: See “Country Profiles” available at http://oe.cd/pag.
Note: (C) refers to contribution-based basic and (R) refers to residence‑based basic.
Source: See “Country Profiles” available at http://oe.cd/pag.