Pensio

Pensio is a term used to refer to retirement income arrangements in many countries. It denotes payments made to individuals after they reach a specified retirement age or become disabled, and can describe government pensions, employer-sponsored schemes, or private plans. The concept is closely related to the standard pension system found in many economies, and varies in scope, generosity, and eligibility rules from one country to another.

Pension systems are typically funded through a mix of contributions, payroll taxes, and investment returns. They commonly follow one of two funding models: pay-as-you-go, where current workers fund retirees’ benefits, and funded schemes, where contributions are saved and invested to pay future benefits. Most systems operate on multiple pillars, including a public (state) pension, occupational or workplace pensions, and private savings or personal pensions, with definitions varying by jurisdiction.

Key features of pensio arrangements include eligibility criteria such as age and years of contribution, benefit formulas that translate accrued rights into monthly payments, indexing to prices or wages, and rules on vesting and portability. Policy discussions around pensio often focus on sustainability in the face of aging populations, economic cycles, demographic shifts, and the balance between public obligations and individual savings.