This paper investigates the pension policies and outcomes of two countries, Austria and Ireland, representing two different welfare models. How do these different systems perform in terms of income adequacy, labour supply incentives for older workers, and actuarial fairness? Although there is no ‘optimal’ design for a pension system, there seems to be a convergence in systems between countries. Countries with established welfare models that have evolved over time need to rethink the basic paradigms of their pension policies for the future. This paper contains specific policy recommendations about pension reform. We highlight the importance of behavioural incentives with respect to raising average retirement ages, and the need for government engagement in providing an adequate retirement income.
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