Pensioners’ rise leaves fewer workers

The world’s working-age population is shrinking faster than expected, leaving fewer people to support a growing number of seniors, according to a Bloomberg study.

Conventional measures of old-age dependency calculate the ratio of people aged 65-plus with those of working age: 15 to 64. But many people stop working well before 65: men in 66 per cent of the 177 countries Bloomberg evaluated, and women in 78 per cent, can begin receiving retirement benefits earlier.

So the Bloomberg Sunset Index calculates dependency based on each country’s statutory pensionable age. Nigeria, with a statutory pensionable age of 50, has only 4.8 workers supporting each senior, compared with 19.4 as indicated by conventional

Seniors in France . . . are the least supported, with about two workers to each retiree

measures. Russia has 2.4 instead of 5.1, and Colombia has 4.5 instead of 9.4.

As seniors increasingly outnumber people still in the workforce, pressures rise on investment pools, medical systems and funds to build economies for future generations.

Asia could be facing the toughest choices in allocating resources. The Asia Pacific Risk Centre estimates the region’s elderly population will rise 71 per cent by 2030, compared with 55 per cent in North America and 31 per cent in Europe.

The retirement age in China is 60 for men and 55 for women. The Bloomberg Sunset Index shows 3.5 workers supporting each senior there; conventional calculations indicate 7.3.

Seniors in France, where the retirement age is 61.6, are the least supported, with about two workers to each retiree, the index shows. In the US, the ratio is 4.4 to one.

Americans can start receiving Social Security at 62, with a sliding scale for full retirement benefits from 65 to 67, depending on the year of birth. In June, the Social Security Administration estimated the programme’s trust fund would run out of money in 2034, though the timeline could be extended by raising the retirement age even more.

Other countries also raised retirement thresholds in the past four years.

In France, it’s now 61.58, up from 60. For Greek men, it’s 67 instead of 65. For Italian women, it’s 65.58, up from 62.

In Japan, where many people work beyond the statutory pensionable age of 65, payments from the government-run pension system account for more than 10 per cent of gross domestic product.

In December, its parliament approved a bill allowing for smaller payments if consumer prices and

wages decline.