The next few decades will be a period of rapid demographic change that will present significant challenges to both public and private pension systems. In the next five decades, reasonably conservative estimates are that the proportion of the population aged over 65 in the developed world will roughly double. This shift in the age structure of the population will naturally create wide-ranging economic and political strains, particularly where pension provision relies extensively on pay-as-you-go systems that are inherently sensitive to demographic change.

In addition to stress caused by a shift in the age structure of the population, low fertility experience of many countries, particularly in continental Europe, will lead to substantial declines in the working age population in the next couple of decades. A decline in the availability of workers will pose challenges for firms who are likely to be under increasing pressure to attract and retain key workers. These pressures could lead to a growth in employer-provided pensions.