SHAPING THE FUTURE HOW CHANGING DEMOGRAPHICS CAN POWER HUMAN DEVELOPMENT

FIGURE 4.12:
Pension replacement rates provide a measure of adequacy
Source: OECD 2014.
Notes: The pension coverage rate is that of individuals who are actively working and contributing to a pension. It does not include
individuals covered by non-contributory pension schemes.
with available data, 17 spent less than 1 percent
of GDP on pensions in 2010 to 2011. Australia
and New Zealand spent around 5 percent, while
Japan spent almost 12 percent (Figure 4.14).
Current low spending on pensions in most
Asia-Pacific countries is expected to rise. In
emerging economies, there was a 2 percentage
point jump in public pension spending as the
share of GDP between 1990 and 2010, with
predicted climbs in advanced and emerging
economies by an average of 1 and 3 percentage
points over the next two and four decades, respectively.
72 The proportion of the government
budget spent on social pensions ranges from
0.05 percent in India and Viet Nam to 0.35
percent in Nepal. However, research indicates
that the cost should range from 1 percent to
1.5 percent of GDP in the medium term, and
2 to 2.5 percent in the long run. 73 The Japanese
have had some experience in taking measures to
FIGURE 4.13:
Non-health public expenditure on pensions
is very low in Asia-Pacific compared to other
regions
Source: ILO 2014a.
Pensions in many
cases do not provide
enough income
for self-sufficiency
135