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Allianz, one of the world's leading insurance companies, has published the third edition of its Global Retirement Report. The report highlights the growing global retirement savings gap but emphasizes that this gap can be closed with the necessary regulations and implementations. It analyzes the retirement systems of 71 countries. The report also evaluates the Turkish retirement system, recognizing Turkey’s relatively young population compared to Europe as a significant asset and potential.
As one of the world's largest insurance companies, Allianz has released the third edition of the Global Retirement Report, in which it assesses 71 retirement systems based on 40 parameters, including demographics, economics, sustainability, and the need for reform. Presenting the retirement systems of various countries in an indexed format, the report is prepared according to the Allianz Retirement Index criteria.
High Need for Reform in Europe
The report ranks the retirement systems of 71 countries based on their need for reform. According to the findings, a small group of countries, including Denmark, the Netherlands, and Sweden, are cited as examples, as they have identified the path to sustainability at an earlier stage. Japan, known for its long life expectancy and the fact that one-third of individuals over the age of 65 are still working, stands out from other countries due to these characteristics. Meanwhile, developing countries such as Malaysia, Colombia, and Nigeria are among those urgently needing reforms to protect their retirement systems from the impacts of demographic changes. Several European countries, including Germany, France, and Italy, are classified as having a high need for reform due to their rapidly aging populations.
Expansion of Retirement Funds Needed in Turkey
Turkey ranks in the mid-range of the Allianz Retirement Index, which assesses countries based on their demographic and financial conditions, the long-term sustainability of their systems, and the adequacy of retirement pensions. However, the report indicates that Turkey’s retirement system requires reform. Although Turkey holds a more advantageous position compared to European countries, the report highlights that it still faces the global challenge of an aging population. The proportion of elderly individuals requiring care is expected to rise from 15% to 35% over the next 25 years. Additionally, due to low private savings rates, the report emphasizes the need for a sustainable expansion of retirement funds within Turkey’s retirement system. For most retirees in Turkey, retirement pensions are significantly lower than their final earnings during their working years, making it difficult for them to maintain their current standard of living. The report suggests that gradual improvements and the development of fund-supported models would enhance the long-term security and adequacy of the retirement system. Another major issue highlighted is the lack of job opportunities for elderly workers. In Turkey, there are 61 retirees for every 100 workers, and 20% of men over 65 are still employed. The report compares this with Japan, a global model for aging societies, where 35% of men over 65 remain in the workforce. Additionally, the report points out that Turkey’s relatively early retirement age contributes to a pension gap, setting it apart from other countries.
Migration: Losing Its Impact
Life expectancy continues to rise, while birth rates keep declining. The report highlights that migration has significantly mitigated the expected impact on labor markets and social systems in Europe. Germany serves as the best example, where nearly 90% of the 1.6 million new jobs subject to social security in the past five years have been filled by migrants. However, the report suggests that this trend will not continue indefinitely, and Europe may lose its appeal as a migration hub in the future. It emphasizes the critical importance of utilizing part-time female workers and elderly employees facing age discrimination as an alternative workforce. While migration has supported labor markets in some European countries, Turkey, which is among the top 30 countries globally in terms of migrant intake, requires solutions tailored to its own demographic and economic dynamics for its retirement system.
Retirement Savings Gap Can Be Closed
According to Allianz calculations, the retirement savings gap for younger generations in the Eurozone alone** amounts to approximately €350 billion per year. The report suggests that if the savings rate increases by 25%, this gap could be closed. Allianz Chief Economist Ludovic Subran emphasizes: “Generation X needs to save more to maintain their desired standard of living in old age. However, we must not focus only on one side of the equation—namely, household savings efforts. It is crucial to consider both retirement security and capital market development together. Retirement savings should also contribute to future growth and innovation. This could be the key to overcoming demographic change and climate change.” He also notes that Europe still has significant gaps in this area. |
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