This paper discusses the building of pension reform in the light of economic theory, and their application to different types of economy. The opening section sets out the simple economics of pensions. The second section discussed a series of myths which have proved remarkably persistent. Building on this analysis, the latter part of the paper sets out the foundations of effective pensions policy. The third section discusses the prerequisites which any pension reform must respect, i.e. those things which policy advisers can - and should - assert authoritatively. The fourth turns to the range of choices facing policymakers, drawing of the very different arrangements in different countries. The main conclusions are threefold: (1) The key variable is effective government. (2) From an economic perspective, the difference between pay-as-you-go and funding is second order. (3) The range of potential choice over pension design is wide. One size does not fit all. only subscribers can see the full article