The Analysis of International Experience of Pension Funds and Main Development Trends
The Analysis of International Experience of Pension Funds and Main Development Trends
Bekchyan Ani
Summary
Key words: pension fund, pension, accumulation, funded system, pay-as-you-go system, private savings, system participant
This paper analyzes the international experience of pension funds and the main trends in their development, considering global challenges such as population aging, increased pressure on social security systems, and limited state financial capacities. The study examines three primary models: pay-as-you-go (PAYG), defined contribution (DC), and defined benefit (DB) with comparative analysis from countries including Australia, Canada, Japan, the Netherlands, the United Kingdom, and the United States. The findings highlight a global shift from DB to DC systems, driven by economic sustainability concerns, demographic trends, and the need for investment flexibility. The case of Armenia is examined as a country aligning with global practices through the implementation of a mandatory funded pension system since 2014. A more detailed examination shows that long-term pension system sustainability depends on effective regulation, diversified investment strategies, and public trust in financial institutions. Transparency, risk mitigation, and independent oversight are crucial, while countries adapting their systems to macroeconomic shifts achieve greater stability and stronger protection of future pension rights.