Which OECD countries spend the most on public pensions?

For many, pensions are an essential source of income during retirement. In most countries, pension plans are divided into private plans, either self-funded where individuals put money into plans like Registered Retirement Plans in Canada, or funded by employers, and public plans that are either fully or partially funded by the government, such as the Canada Pension Plan. In 2021, the latest year for which data is available, spending on public pension programs across OECD countries averaged 8.3% of their gross domestic product (GDP). Spending on public pensions ranges greatly across the 38 OECD members, from a high of 16.2% of GDP in Greece to a low of 2.9% of GDP in Iceland and Ireland. Almost two-thirds of members spent less than the OECD average on public pensions. There are notable regional trends. Countries in Western Europe typically spent more on public pensions as a share of GDP compared to their OECD peers. The top 10 countries — Greece, Italy, Austria, France, Portugal, Spain, Finland, Poland, Germany, and Belgium — all spent more than the OECD average by at least 2.7 percentage points. At the other end of the spectrum, the bottom ten — Canada, Colombia, Mexico, Costa Rica, New Zealand, Israel, South Korea, Chile, Australia, Iceland, and Ireland spent at least 2.2 percentage points below the OECD average.

The future of public pensions

The OECD’s long-term projections show that public pension spending is expected to increase across 24 member countries, for which data is available. Increases are driven primarily by an aging population, leading to a greater share of total government spending allocated to meeting pension obligations.