There is considerable variation in eligibility ages for social security and private sector retirement benefits around the world, as well as different approaches to provide incentives (or disincentives) for early or late retirement. Factors that underlie decisions regarding these ages and alternative approaches include sustainability and affordability of these programs, adequacy and equity of benefits, and economic and political policy.

Increases in longevity and decreases in fertility have led to the aging of populations and increases in the old-age dependency ratio in many countries. At the same time, many investment markets have achieved disappointing returns in the current low interest rate environments. These factors are putting financial pressure on social security programs, government budgets and employer sponsored pension plans. One way to reduce this financial pressure is to increase the eligibility age for retirement.

The paper examines the actuarial, social and economic impacts of raising the eligibility age for retirement benefits and describes the experience of several countries in doing so. It discusses the resulting effects on individuals (both healthy and unhealthy), socio-economic subgroups, employer sponsored plans, social security programs, and the labour market.

Assia Billig, chair of the Population Issues Working Group, who led the development of the paper said “Actuaries are involved in the financial analysis required for pension programs to adapt to our dynamic world, both as technical experts and as policy advisors who provide sound and objective advice. We hope that our paper assists national policymakers as well as supranational organizations to develop and formulate effective eligibility age policies in all types of retirement income systems.”

The paper is available on the IAA website under PUBLICATIONS/PAPERS.

To learn more about the work of the IAA on this topic, contact the Director of Technical Activities at the IAA Secretariat. Click on this link to access other papers and presentations related to this topic, along with presentations made at the Retirement Age Seminar hosted by the IAA in Vancouver in October 2015.

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