How should pensions be managed in light of population ageing?

Population ageing affects all OECD countries (we compare Germany, France, Spain and Italy). How pension systems are managed is therefore going to become a crucial issue. Broadly speaking, p ublic pension systems face a choice between only three options: Not modify ing the retirement age and increas ing the pension share of GDP and the tax burden; Not modify ing the retirement age and reduc ing the level of pensions to stabilise the pension share of GDP; Rais ing the retirement age (via legislation or incentive-based measures) to prevent the pension share from rising and the level of pensions from declining. The third option, which avoids an increase in the tax burden and the impoverishment of pensioners, looks the most reasonable.