Global pension systems face rising retirement risks

Global pension systems face significant challenges due to aging populations and increased life expectancy. According to the World Economic Forum, the responsibility for financing retirement has shifted from institutions to individuals under defined contribution schemes. This shift creates a ‘decumulation’ challenge, where 44% of people globally fear outliving their savings.

The International Labour Organization (ILO) reports that 90% of the global workforce lacks a pension. In many regions, such as Africa and parts of Asia, mismanagement or high levels of informal labor—which accounts for 80% of jobs in some areas—hinder coverage. In Latin America, much of the workforce operates in the informal or rural sectors without benefits.

In Mexico, despite pension reforms in 1992 and 1997, replacement rates remain a concern. BBVA Research indicates that while low-income workers might achieve a replacement rate of up to 73% (including housing subaccounts), high-income earners may only see between 20% and 30% of their final salary. This disparity highlights the critical importance of voluntary savings to ensure economic stability during retirement.