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Funded and private pensions

Financial Incentives and Retirement Savings

Published on December 03, 2018

book
Are tax incentives the best way to encourage people to save for retirement? This publication assesses whether countries can improve the design of financial incentives to promote savings for retirement. After describing how different countries design financial incentives to promote savings for retirement in funded pensions, the study calculates the overall tax advantage that individuals may benefit from as a result of those incentives when saving for retirement. It then examines the fiscal cost of those incentives and their effectiveness in increasing retirement savings, and looks into alternative approaches to designing financial incentives. The study ends with policy guidelines on how to improve the design of financial incentives to promote savings for retirement, highlighting that depending on the policy objective certain designs of tax incentives or non-tax incentives may be more appropriate.

TABLE OF CONTENTS

Foreword
Executive summary
Why countries provide tax and non-tax financial incentives for retirement savings
The tax treatment of retirement savings in funded private pension arrangements
Does the design of financial incentives provide a tax advantage when people save for retirement?
Are financial incentives effective tools to increase participation in and contributions to retirement savings plans?
The long-term fiscal cost of financial incentives to promote savings for retirement
Assessing alternative approaches to designing financial incentives to promote savings for retirement
Policy guidelines to improve the design of financial incentives to promote savings for retirement
Country profiles
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