What’s happening with pensions? Inside global reforms to retirement plans

Employers often use their culture and benefits in job adverts in an attempt to attract new workers. They talk about perks like vacation policies, flexible working arrangements, wellbeing days and socials.

Less talked about are those benefits linked with retirement – whether that’s pensions and 401(k) plans. However, these employer schemes are hugely important – they allow us to save our earnings now so we can stop working and retire comfortably later in life.

Of course, pensions often do make the headlines, particularly when governments are making legislative changes – but it can be hard to stay abreast of all the details. This is even harder for employers with workers across different geographies.

This year there’s been a lot pension and 401k reform going on all across the world – here’s everything HR teams need to aware of from legislative changes from the US to Europe to Asia in 2025. Let’s dig in.

US

Since returning to office in January, US President Donald Trump has been busy with Executive Orders on a whole range of topics.

In early August, he signed one about 401(k) employer-sponsored personal pension accounts.

The Executive Order ordered the Secretary of Labor to re-examine guidance on alternative asset investments through 401(k) plans. This could be cryptocurrency, private equity or real estate.

“The federal government should not be making retirement investment decisions for hardworking Americans, including decisions regarding alternative assets,” Secretary Lori Chavez-DeRemer said.

“The Department of Labor already took action to rescind the Biden Administration’s guidance that disadvantaged crypto investments.

This Executive Order further supports our efforts to improve flexibility and eliminate unfair one-size-fits-all approaches.”

The reason why organizations and HR leaders need to be aware of these changes is their workers may ask about alternative ways of investing, and be looking for that, now that it is US government policy.

Europe

The US is not alone in rethinking retirement pots in 2025, countries across Europe also implementing changes to their pension systems.

Read on to find out what’s going on in some of Europe’s biggest economies like the UK, Germany and the Netherlands.

Germany

Last year, the German government announced reforms to its pensions system – known  as Pensions Package II (Rentenpaket II).

The aim is to stabilize the German pension system over the long-term, and centers around establishing a long-term sovereign wealth fund called Generations Capital (Generationenkapital).

The government wants to accumulate €200 billion in the sovereign wealth fund by 2036. As noted by thinktank Bruegel, the German Government has endowed the fund with an initial €12 billion in 2024, which is financed by government debt.

From 2036, the fund will disburse an average of €10 billion annually to finance pension expenditure and soften the rising employer and employee contribution rates.

As part of the wider Rentenpaket II reforms, employee and employer contributions are increasing in two stages, however, the aim is for the Generationenkapital to soften these rising contribution rates.

It seems that more pension reforms may be on the horizon, so employers need to be aware. Insurance giant Willis Towers Watson (WTW)’s advice is for HR teams to monitor the situation closely.

UK

In June 2025, the UK government introduced the Pension Schemes Bill.

Talking about the bill, Work & Pensions Secretary Liz Kendall said: “The Bill is about securing better value for savers’ pensions and driving long-term investment in British businesses to boost economic growth in our country.

“As part of our Plan for Change we’re helping people find work, stay in work, and ensuring that work pays them back to give them the secure income in retirement they deserve.”

The Bill is set to become law in 2026, so employers, and particularly HR & Finance teams, need to keep a close eye on any amendments as the legislation goes through the House of Commons and House of Lords.

Another change that HR teams need to be aware of is that the UK Government has revived the 2006 Pensions Commission to consider the future of the UK pensions system.

Minister for Pensions Torsten Bell stated: “The original Pensions Commission helped get pension saving up and pensioner poverty down.

“But if we carry on as we are, tomorrow’s retirees risk being poorer than today’s.

So we are reviving the Pensions Commission to finish the job and give today’s workers secure retirements to look forward to.”

HR, keep that dialogue open with Finance, pension scheme partners and employees as these reforms come into effect.

The Netherlands

In the Netherlands, as part of the Future of Pensions Act, pensions are changing from a defined benefit to a defined contribution system.

This means moving from collective schemes to more individual schemes, and also aims to be more transparent and personal, according to the Dutch government.

While this change primarily affects how pension funds invest and mange their assets, there’s lots for HR leaders and employers to be aware of.

Employers and employees alike need to adjust their pension schemes by January 2027 to ensure they’re compliant. This is a time consuming process, so the advice from Deloitte is to get ahead of the game.

Asia

Pensions and retirement are also high on the political agenda across Asia. There’s lots of discussion and incoming reforms in Asia’s largest economies; think China, Japan and South Korea.

Here’s an overview of what HR leaders need to know.

China

After a successful 2022 pilot program in select cities and regions, the Chinese government has implemented tax incentives for retirement saving nationwide in December 2024.

This approach is more focused on individuals than employers, but, as WTW advises, “the nationwide availability of the program to employees could affect employers’ future thinking on providing retirement benefits”.

This change also comes as China increased the retirement age. For women, it rose from 50 to 55 for blue collar jobs, and 55 to 58 for white-collar work. For men, it increased from 60 to 63.

There’s also potential for further reforms to the way that China thinks about pensions, especially given its aging population and low interest rates.

HSBC argues that China needs to be bolder with its pensions system to address gaps in coverage, and channeling the country’s household wealth into pension savings.

Japan

As part of wider tax reforms, the Japanese Government has amended Defined Contribution pensions plans.

As a result, insurance giant AON’s whitepaper stated that the limit for corporate Defined Contribution plans will increase by 7,000 yen (48 US dollars) a month (from 55,000 yen to 62,000 yen).

There will also be an abolition of matching contribution requirements – this aims to encourage employees to contribute more, as well as to simplify administration for employees, according to WTW.

These changes are expected to take effect in the 2026 fiscal year, but they are still under legislative consideration.

HR teams need to watch carefully how these reforms are implemented and enforced – and if the government introduces any additional measures. Could these higher limits be the time for companies to offer more competitive retirement benefits?

Global benefits experts Asinta also recommended that organizations get their payroll and HR systems ready for the new rules.

South Korea

The South Korean Government announced the biggest overhaul of corporate pensions in the country in 18 years, according to reporting by Reuters.

Revisions to the National Pension Act raise the contribution rate from 9% to 13% – this will happen gradually over the next eight years, starting in 2026. The contribution remains equally divided between employers and employees.

The contribution rate in South Korea has not increased in almost three decades, so this is a big change for employees and employers alike.

There also changes to the mandatory employer provision of South Korea’s Employee Retirement Benefit Security Act, as well as extended pension credits for childbirth and military service.

As The Korea Times reported, political parties in South Korea remain divided about whether additional reforms will be needed to keep the country’s public pension fund in the black in the long-term.

HR leaders need to be prepared for the current changes, but also get prepared for what might be coming down the pipeline.