Ageing and pension system reform: implications for financial markets and economic policies -- A report prepared at the request of the Deputies of the Group of Ten

Group of 10

Communiqué of the Ministers and Governors of the Group of Ten, 2005 Annual Meetings

Ageing and pension system reform: implications for financial markets and economic policies
A report prepared at the request of the Deputies of the Group of Ten¹

September 2005

This report is being posted simultaneously on the websites of the BIS, IMF, and OECD, which are the three organizations that provide the secretariat for the Group of 10.

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The demographic transition to older societies, in the most advanced economies but also beyond, is ushering in economic and financial changes. These were reviewed by the G10 in a 1998 report, The Macroeconomic and Financial Implications of Ageing Populations, which analysed the impact of population ageing on growth and living standards, public finances, financial markets and international capital flows. In line with some of the main recommendations of that report, pension system reforms have been undertaken since then in most G10 countries, and experience with private saving for retirement has continued to build up, with substantial and instructive differences across countries. This report examines the financial market and policy implications of the increasing importance of funded retirement saving.

¹The Group of Ten (G-10) refers to the group of countries that have agreed to participate in the General Arrangements to Borrow (GAB), a supplementary borrowing arrangement that can be invoked if the IMF's resources are judged to be below members' needs. The GAB was established in 1962, when Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, the United Kingdom, and the United States agreed to make resources available to the IMF for drawings by participants, and, under certain circumstances, by nonparticipants. The GAB was strengthened in 1964 by the association of Switzerland, then a nonmember of the Fund, but the name of the G-10 remained the same. The IMF is an official observer of the activities of the G-10, and supports those activities through, inter alia, the provision of resources to the G-10 Secretariat.