Adequacy of Retirement Income after Pension Reforms in Central, Eastern, and Southern Europe : Eight Country Studies
All of the former transition economies in Central, Eastern, and Southern Europe (CESE) inherited from the era of central planning traditional defined-benefit pension systems financed on a pay-as-you-go basis. Like many pay-as-you-go public pension...
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| Language: | English |
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World Bank
2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000333038_20090319032815 http://hdl.handle.net/10986/2610 |
| Summary: | All of the former transition economies
in Central, Eastern, and Southern Europe (CESE) inherited
from the era of central planning traditional defined-benefit
pension systems financed on a pay-as-you-go basis. Like many
pay-as-you-go public pension systems elsewhere in the world,
CESE pension systems were in need of reforms to address
short-term fiscal imbalances and longer-term issues relating
to population aging. Reforms were also needed to adjust
benefit and contribution structures to meet the challenges
of-as well as to take advantage of opportunities relating to
the transition to a market economy, including the widespread
adoption of multiplier designs with improved risk-sharing
across funded and unfunded pillars. By 2006, most countries
in Europe and Central Asia had introduced a voluntary
private pension scheme. By 2008, 14 countries roughly half
of all countries in the region had legislated mandatory
private pension schemes, and all but one of those schemes
(the one in Ukraine) had been introduced. These reforms
shared a number of common objectives, in particular putting
the systems on a sounder financial footing and better
aligning them with the (very different) incentives of a
market economy. This report is organized as follows. The
first section discusses the motivation for reform across the
eight countries included in the study against the backdrop
of the regional (and global) trend toward multiplier pension
arrangements. The second section summarizes the key
provisions of the reformed systems in the eight countries
within the World Bank's five-pillar framework for
pension system design. The third section summarizes pension
system performance against the two crucially important
dimensions of adequacy and sustainability. The last section
provides some policy recommendations for addressing gaps in
reforms and taking advantage of further opportunities. |
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