People beginning their careers today in Belgium will go on retirement with a share of their last salary that is 14% lower than those who retire today, the OECD notes in a report issued on Tuesday.
The OECD (Organisation for Economic Cooperation and Development) report focuses on pension reform. It notes that workers born in 1956 who go on retirement in Belgium keep 53% of their last gross salary. Should pension policies remain unchanged, pensions as a percentage of a worker’s last salary will drop to 45.7% for persons starting out today, the study noted.
This downward trend is expected in 21 OECD member countries, while gross replacement rates at the normal retirement age is expected to increase in 10 member countries. In general, the rates will drop by six points, which implies that the pension of a worker born in 1996, after an unbroken career, will be 10% lower than that of her counterpart born in 1940, according to the study.
The OECD also highlighted the fact that the portion of adult life spent on retirement should increase by 10% in the OECD countries. It said that, to stabilise this proportion, retirement age should be increased to 67.2 years for the 1996 cohort. It is currently 65.8 years.
Austria, Belgium, Chile, Germany, Luxembourg, Poland and Slovenia are the countries where time spent on retirement has been increasing the most, according to the OECD report.