The projected increase in the old-age dependency ratio will have negative implications for economic growth, while simultaneously placing a significant burden on public finances and on the sustainability of privately funded occupational and private pensions. Population ageing will place considerable pressure on the public finances by driving up agerelated expenditure.
In the European context, the most acute fiscal pressures are faced by those countries where – unlike in Ireland – occupational pensions are mainly funded on a pay-as-you-go basis within public social insurance systems. A number of European countries have already adopted pension reforms aimed at controlling the projected increase in public pension expenditure.