This article addresses the role of pillars and their interaction in the overall system in the countries studied and how this interaction contributes to overall risk sharing. This is analysed through a detailed modelling of theoretical net replacement rates and a comparative analysis of the multi-pillar pension systems in Canada, Denmark, the Netherlands and Sweden.

The experience and choices represented by these well-functioning systems can be relevant to policy considerations in other countries – even though the case studies represent systems in high-income countries only. Despite their apparent similarities, the approaches adopted in the four countries are indeed very different as regards such aspects as public versus private pensions, the design and role of the public system, the approach to poverty alleviation and the design of occupational schemes. Such differences translate into very different policy settings and challenges.

The study is not intended as a ranking exercise, and it does not seek to recommend a particular approach. Pension systems are different and they relate to particular political and cultural contexts. The objective is to analyse policies from a holistic policy-based starting point, and communicate the result with the view to inform policy discussion. The analysis shows how options and choices as regards relatively detailed regulations and practices are linked to overall design choices, and how each model has its strengths and weaknesses.