PARIS—Asian nations need to act now to reform their pension systems to deal with demands from a rapidly ageing population over the next two decades, the OECD said here on Wednesday.

"Many Asian nations will need to reform their pension systems in order to deliver sustainable and adequate retirement incomes for today's workers," the Organization for Economic Cooperation and Development stressed in a joint report with the World Bank.

It cited "rapid population ageing" that predicted for the next 20 years and said it was important for Asian nations "to act now."

The study, covering 18 Asian countries, found that in South Asia only 7.5 percent of the working-age population were eligible for a pension, while in East Asia the comparable figure was 18 percent. In the OECD, which groups the world's leading industrialized nations, 70 percent of the working population are eligible for pension benefits.

It also noted that the withdrawal of savings before retirement is common while savings are often taken as lump sums and therefore fail to provide adequate income over a lifetime.

In addition, according to the OECD, pension payments are not automatically adjusted to reflect cost of living changes while few countries provide "safety-net" retirement incomes for workers outside formal pension schemes.

The report put forward three recommendations:

• The calculation of pension entitlements according to average lifetime earnings rather than final salary levels.

• Measures to ensure workers take out their savings only on retirement through regular payments.

• Linking pension payments to cost of living changes, a practice currently prevailing only in China and the Philippines.