Nonfinancial Defined Contribution Pension Schemes in a Changing Pension World : Volume 1. Progress, Lessons, and Implementation
Pensions and social insurance programs are an integral part of any social protection system. Their dual objectives are to prevent a sharp decline in income and protect against poverty resulting from old age, disability, or death. The critical role...
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| Language: | English |
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Washington, DC: World Bank
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2012/06/16439040/nonfinancial-defined-contribution-pension-schemes-changing-pension-world-progress-lessons-implementation http://hdl.handle.net/10986/9378 |
| Summary: | Pensions and social insurance programs
are an integral part of any social protection system. Their
dual objectives are to prevent a sharp decline in income and
protect against poverty resulting from old age, disability,
or death. The critical role of pensions for protection,
prevention, and promotion was reiterated and expanded in the
new World Bank 2012-2022 social protection strategy. This
new strategy reviews the success and challenges of the past
decade or more, during which time the World Bank became a
main player in the area of pensions. But more importantly,
the strategy takes the three key objectives for pensions
under the World Bank's conceptual framework coverage,
adequacy, and sustainability and asks how these objectives
and the inevitable difficult balance between them can best
be achieved. The ongoing focus on closing the coverage gap
with social pensions and the new outreach to explore the
role of matching contributions to address coverage and/or
adequacy is part of this strategy. This comprehensive
anthology on nonfinancial defined contribution (NDC) pension
schemes is part and parcel of the effort to explore and
document the working of this new system or reform option and
its ability to balance these three key objectives. This
innovative, unfunded individual accounts scheme provides a
promising option at a time when the world seems locked into
a stalemate between piecemeal reform of ailing traditional
defined benefit plans or their replacement with prefunded
financial account schemes. The current financial crisis,
with its focus on sovereign debt, has enhanced the
attraction of NDC as a pension scheme that aims for intra
and intergenerational fairness, offers a transparent
framework to distribute economic and demographic risks, and,
if well designed, promises long-term financial stability.
Supplemented with a basic minimum pension guarantee,
explicit noncontributory rights, and a funded pillar, the
NDC approach provides an efficient framework for addressing
poverty and risk diversification concerns. |
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