The Organisation for Economic Co-operation and Development is urging governments around the world to urgently reform their pension systems to ensure employees in temporary or part-time employment can contribute enough during their working years to receive adequate retirement income.

A new report said non-standard employment, including self-employment, temporary or part-time work accounts for more than a third of employment across OECD countries. Women are three times more likely to work part time than men, while self-employment is common among older workers.

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Over the last 40 years, the number of people aged 65 years and older per 100 people of working age (those 20-64 years of age) increased from 20 to 31. By 2060, the report noted, the number is expected to almost double to 58.

“Governments need to quickly put in place more inclusive and harmonized pensions for all,” saidAngel Gurría, secretary-general at the OECD. “Reforming pension policies in OECD countries to reduce gaps between standard and non-standard workers in terms of coverage, contributions and entitlements is essential.”

Non-standard workers typically earn less, contribute less to earnings-related pensions and can’t contribute to workplace plans, noted the report. “Even assuming a self-employed worker contributed during a full career, they would end up with around 80 per cent of the pension benefit that dependent employees with similar income would receive from mandatory schemes, on average, across the OECD.”

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The report is recommending that OECD countries focus on creating more inclusive and harmonized pensions for all, rather than a shift in designing and financing pensions. It also suggested that access to personal pension plans shouldn’t discriminate between different types of employees. “People should more easily be able to transfer their pension rights and assets when they change jobs.”

Countries that are backtracking on reforms that address long-term needs could leave pension systems “less resilient to economic shocks in the future and unprepared to face population aging.”

Also, the share of adult life spent in retirement is still increasing in most OECD countries, according to the report. “The cohort entering the labour market today is expected to spend 33.6 per cent of adult life in retirement compared with 32 per cent for the cohort retiring on average today.”

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