EUROPE - A study of European retirement systems shows a wide range of pension provisions throughout the continent, says Allianz Global Investors.
In terms of sustainability, the study showed Greece, Portugal, Spain, Luxembourg and Italy were under the greatest pressure to reform their systems, while the UK, Netherlands, Sweden, Denmark and Switzerland were judged to have the most sustainable systems.
Allianz Global Investors head of international pensions Brigitte Miksa, said the countries with the least pressure to reform benefited from two clear trends: "First, ageing is less pronounced as it is the case elsewhere in Western Europe. Second, and more important, these countries have pension systems with a well-developed funded pillar and a lower level of state pension."
The report underlined the importance of the pension reserve systems set up by nine of the countries, with total 2007 assets of €515bn, but also highlighted the wide range of investment practices between them.
Senior pension analyst Alexander Boersch said some funds invested only in domestic bonds or existed solely as assets on government balance sheets, while others pursued sophisticated investment strategies with a strong focus on diversification.
He added: "The French, Irish, and Norwegian reserve funds are prime examples. The adoption of socially responsible investing (SRI) principles by these large reserve funds is to be highlighted as this will help to establish SRI as a mainstream rather than a niche strategy. The French and Norwegian funds are especially active in this area."
Overall pension assets were predicted to almost double between 2007 and 2020, rising from €8.6trn to an estimated €16.9trn, despite the effects of the global downturn.
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