The Role of Complementary Pensions

  • Mercedes AyusoEmail author
  • Montserrat Guillen
  • Diego Valero


Recent reforms of public pension systems implemented in various countries, including Spain, have sought to ensure the sustainability of benefits. However, achieving a structural budget balance (i.e. long-run equality between income and expenditure) may result in a decrease in the replacement rate or in the percentage that the pension represents of the last salary. The development of complementary pension schemes, both occupational and personal, is presented as a feasible alternative for increasing the adequacy of benefits. However, both systems face significant challenges in their further implementation, with business structures, on occasions, being highly concentrated in small and medium enterprises and under the significant influence of longevity, inflation and interest rate risks. This chapter presents a comprehensive analysis of the possibilities offered by the second and the third pillars to complement public pension systems and their possible innovations for increasing their level of penetration in different countries.


Sufficiency Notional defined contribution Occupational pension schemes Individual pension schemes Defined contribution schemes Defined benefit schemes Defined ambition schemes Behavioural economics 



The study was supported by ICREA Academia, the Spanish Ministry of Economy and Competitiveness and the ERDF under grants ECO2015-66314-R and ECO2016-76203-C2-2-P.


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Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  • Mercedes Ayuso
    • 1
    Email author
  • Montserrat Guillen
    • 1
  • Diego Valero
    • 2
  1. 1.Riskcenter, Department of Econometrics, University of BarcelonaBarcelonaSpain
  2. 2.University of BarcelonaBarcelonaSpain

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