European public pensions struggle with the weight of demographics
Europe is aging, and some national pension funds are better prepared to manage its changing demographics than others. Many European countries use a 鈥榩ay as you go鈥� model in which current workers fund the retirement of current pensioners. An aging population strains this type of pension model, but changing the model would be a hard sell, according to research by 海角社区 Desautels Associate Professors and .
Countries like Australia and Canada have capitalized public pension systems in which the pension contributions of current workers are invested and grow over time. This makes these systems more sustainable, but the models were phased in over a period of several decades. 鈥淚f you move to a capitalised system, workers face a 鈥榙ouble burden,鈥欌�� says Betermier. 鈥淭hey effectively pay twice: once to finance current retirees and again to build their own retirement savings. That is a very difficult political sell.鈥�
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