The total fertility rate is below the replacement level – the number of children needed to keep the total population constant – in 32 out of 34 OECD countries for 2010-15. The exceptions to this are Israel with a replacement rate of 2.9 and Mexico at 2.2. However in two-thirds of OECD countries there has been a moderate increase in fertility rates over the last decade. Fertility rates have a profound implication for pension systems because they, along with life expectancy, are the drivers of population ageing.

The remarkable increase in life expectancy is one of the greatest achievements of the last century. Lives continue to get longer, and this trend is predicted to continue. In 2010-15, life expectancy at birth averaged 77.2 years for men and 82.7 years for women. Among women, the figure was highest in Japan (86.9 years), followed by Spain, France, Italy and Switzerland. For men, life expectancy at birth was highest in Iceland (80.2 years) followed by Australia, Switzerland, Japan and Israel.

Population ageing is one of the main driving forces behind the wave of pension reforms in recent years. The old-age support ratio is an important indicator of the pressures that demographics pose for pension systems. It measures how many people there are of working age (20-64) relative to the number of retirement age (65+). At the moment, there are just under four people of working age for every one of pension age on average.

Average earnings are an important metric underlying the presentation of system parameters and the results of pension modelling. The distribution of earnings is used to calculate composite indicators, such as the progressivity of pension systems, the structure of the retirement-income package and weighted averages.