The full-time employment model does not adequately address the profound changes in employment patterns, which economies are now experiencing, such as the increasing number of women in the workforce. Then again, most pension schemes are also designed for workers with full and uninterrupted careers. This does not reflect the experience of women, as we see more and more today, who may leave their jobs to become full time housewives or homemaker. Breakdown of marriage institutions, which is now not uncommon, and the fact that women typically outlive their husbands, place women at greater risk of being in poverty in old age unless pension schemes are adapted to meet their needs. Pension schemes must also take into account the changing work patterns in economies, which in the recent decade had seen an increase in part-time workers, the self-employed and temporary workers. 2  BIS Review 137/2007  The third challenge is in instilling public awareness on planning for retirement, particularly on having an appropriate level of retirement income to support retirees' healthcare and longterm care. A recent survey conducted in Malaysia revealed that more than 80% of Malaysians are either indifferent or not worried whether or not they have enough money for retirement. Only 34% are consciously saving regularly for retirement and an alarming 60% do not know exactly how much they need during retirement.
Amidst such challenges, there have been substantial reforms to pension systems in recent years to avoid systemic risks implications to financial stability and fiscal sustainability. Allow me to briefly outline the reforms undertaken by various jurisdictions. One of the most common features of reforms involves raising the age at which eligibility of benefits can occur. For some, especially in European countries, large tax increases were introduced as an alternative to address serious problems of financing pension benefits. In countries with severe demographic challenges, pension benefits were reduced by way of indexing benefits to wages and consumer price indices. Essentially, much of the pension reforms were focussed on reducing fiscal deficits. However, the impact of such reforms has achieved varying degrees of success and in some cases has been noted to have regressive effects. While it is not expected that all countries may make similar choices, striking a balance between maximising returns on pension fund investments and ensuring stable retirement incomes may result in trade-offs that could compromise other developmental needs. For example, poor investment returns on asset classes arising from funded pension schemes may require the Government to secure alternative funds to provide sufficient returns for the workers making such contributions. This could potentially stifle the development of other sectors in the economy. Moving forward, the challenge is to provide sufficient, affordable, sustainable and robust pension schemes.