Population ageing in Portugal and pension measurements

The Portuguese population ageing is one of the highest in the European Union. The welfare state and its development are affected by the historical development, political instability of the 20th century, and the high level of Christianity. The public pension schemes reflect it in contributory and non-contributory schemes. This study aims to describe the Portuguese public pension scheme with sustainability measurement. The aim is fulfilment based on the literature review. The measurements are focused on early retirement pensions, the indexation mechanism, and retirement age. The most important is the retirement age mechanism which leads to financial sustainability when the unemployment rate of pre-retirements is not high. The indexation mechanism includes two parameters when the economic situation is reflected as income distribution. It has a positive effect on intergenerational solidarity. However, meritocracy is weakened. Thus, this is a choice between these parameters.