Equitable and Sustainable Pensions
Back Matter

Back Matter

Author(s):
Benedict Clements, Frank Eich, and Sanjeev Gupta
Published Date:
March 2014
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    Contributors

    Mukul G. Asher, educated in India and the United States, is a Professorial Fellow in the Lee Kuan Yew School of Public Policy at the National University of Singapore and a Councilor at Takshashila Institution. He specializes in public financial management and social security reforms in Asia. He has published and consulted extensively with multilateral organizations and governments.

    Azad Singh Bali is a doctoral student int the Lee Kuan Yew School of Public Policy at the National University of Singapore. His research interests lie in comparative health policy and social security reforms in Asia, and he has contributed to edited volumes on social protection and pension reforms.

    Nicholas Barr is Professor of Public Economics at the London School of Economics. He spent two periods at the World Bank working on income transfers in central and eastern Europe and has been a Visiting Scholar at the IMF. He has been active in debates about pension reform and higher education finance, advising governments in many countries.

    Ross Clare is Director of Research at the Association of Superannuation Funds of Australia, where he has worked since 1996; he previously held senior positions with the Australian Treasury and an Australian Government research agency. He has written extensively on the structure and operation of the Australian private pension and retirement incomes systems. He has degrees in economics and law from the Australian National University.

    Benedict Clements is Division Chief of the Expenditure Policy Division in the Fiscal Affairs Department of the IMF; he has worked at the IMF since 1991. He was previously a Division Chief in the Western Hemisphere Department, where he led IMF country teams working on Brazil and Colombia. He has published extensively on public finance and macroeconomic issues.

    Anna Cristina D’Addio is an Economist in the Social Policy Division in the Directorate for Employment, Labour and Social Affairs at the Organization for Economic Cooperation and Development (OECD), where she works on pensions. Previously, she worked on the intergenerational transmission of advantages and disadvantages, the persistence of poverty, the life course approach to social policy, and the decline of fertility rates in OECD countries. She holds a doctorate in public economics from the University of Pavia and another in quantitative economics from the Center for Operations Research and Econometrics and the Institut de Recherches Économiques et Sociales at the Université Catholique de Louvain.

    Stefan Domonkos is a doctoral candidate and Researcher at Mannheim University and the Mannheim Centre for European Social Research. A native of Slovakia and graduate of the Central European University, he devotes most of his research to pension policies in the Visegrad 4 nations. His work on this subject has been published in the past by Global Social Policy.

    Jan Drahokoupil is a Senior Researcher at the Mannheim Centre for European Social Research of Mannheim University and at the European Trade Union Institute. He has published a number of books and journal articles on political economy, public policy, and international business and is an associate editor of Competition and Change: The Journal of Global Business and Political Economy.

    Frank Eich is a Senior Economist in the IMF’s Fiscal Affairs Department; he previously worked as an economist both in the private and public sector, including at the Economist Group and HM Treasury (where he led the department’s analysis of long-term socioeconomic developments and public finance sustainability), the German Federal Finance Ministry in Berlin, and in the pension insurance industry. He holds master’s and doctoral degrees in economics from the London School of Economics.

    Gemma Estrada is an Economics Officer in the Macroeconomics and Finance Research Division of the Economics and Research Department at the Asian Development Bank. Her recent research has been on structural change, old-age security, and trade and economic integration.

    Csaba Feher is a Technical Assistance Advisor in the IMF’s Fiscal Affairs Department. He previously worked at the World Bank, covering public and private pension issues, disability insurance, and other social expenditures. He also worked in the Financial Analyses Department of the National Bank of Hungary, where he was responsible for short- and long-term pension modeling, and was a lead economist at the Fiscal Council of Hungary, heading the unit responsible for social expenditure analyses. His private sector experience includes serving as the Managing Director of the Private Pensions Guarantee Fund and working as an Investment Officer at the International Finance Corporation.

    Sanjeev Gupta is Acting Director of the IMF’s Fiscal Affairs Department. He was previously a fellow of the Kiel Institute, Senior Faculty in the Administrative Staff College of India, and Secretary of the Federation of Indian Chambers of Commerce and Industry He joined the IMF’s European Department in 1986 and has also worked in its African Department. He has published extensively on macroeconomic and fiscal policy issues and has coauthored or coedited a number of volumes.

    Charleen Gust is an Assistant to the Director in the IMF’s Institute for Capacity Development. She was previously a Senior Economist in the European Department, where she worked on Russia. She has worked at the IMF since 2002, first for its Executive Board, and then in its Strategy, Policy, and Review Department. Prior to that, she worked as an Economist at the World Bank and the Bank of Canada.

    Richard Jackson is a Senior Fellow at the Center for Strategic and International Studies, where he directs the Global Aging Initiative. He is the author of numerous policy studies.

    Kenichiro Kashiwase is an economist in the IMF’s Asia and Pacific Department. Prior to joining the IMF, he worked in the U.S. Congressional Budget Office. He holds a doctorate from the University of Michigan.

    Seong Sook Kim is currently the Head of the National Pension Research Institute at Korea’s National Pension Service. Her main area of research over the last 18 years has been Korea’s National Pension Scheme, and she has played a leading role in financial review of the National Pension Scheme since its introduction in 2003. She has also participated in several government committees related to pension and income security programs.

    Iene Muliati is a Social Protection Specialist in the World Bank’s Jakarta Office, focusing on assisting the Indonesian government with implementation of its national social security system and civil service pension reform. She is a Fellow of the Society of Actuaries of Indonesia, with extensive experience in public and private pension plans, employee benefit plans, life insurance schemes and management, as well as strategic management issues. She previously worked with various multinational consulting and insurance firms and international development organizations in Canada, Indonesia, Singapore, and the United States.

    Masahiro Nozaki is a Senior Economist in the Expenditure Policy Division of the IMF’s Fiscal Affairs Department. He has worked at the IMF since 2003.

    Donghyun Park is Principal Economist in the Economics and Research Department of the Asian Development Bank, which he joined in April 2007. His research, which has been published extensively, revolves around policy-oriented topics relevant for Asia’s long-term development, including the middle-income trap, population aging, and pension reform.

    Joana Pereira is an Economist in the IMF’s Fiscal Affairs Department. Prior to joining the IMF in 2009, she was a Researcher at Erasmus School of Economics. She holds a doctorate from the European University Institute.

    Pietro Rizza is an Economist in the Public Finance Division of the Bank of Italy, coordinating the division’s forecasting activity. He previously worked as an Economist at the Italian Treasury and at the European Commission, European Central Bank, and World Bank. He holds a master’s degree from Bocconi University and a doctorate in economics from Boston University. His fields of research are public pension systems, intergenerational equity, and optimal taxation.

    Baoping Shang is an Economist in the Expenditure Policy Division of the IMF’s Fiscal Affairs Department. Prior to his current position, he worked at several leading research institutions, including RAND, the National Bureau of Economic Research, and the Urban Institute. His research to date has covered a wide range of policy areas, including health, pensions, employment, subsidies, and social assistance.

    Mauricio Soto is an Economist in the Expenditure Policy Division of the IMF’s Fiscal Affairs Department. He focuses on assessing the fiscal impact of social spending programs and works on a range of other expenditure policy issues. Before joining the IMF, he was a researcher on social security issues, first at the Boston College Center for Retirement Research and the Urban Institute. He has published papers on retirement and labor markets.

    Dhirendra Swarup has more than four decades of experience across finance, public policy, budgeting, and pension reforms. A former Chairman of India’s Pension Funds Regulatory and Development Authority, he has been a career civil servant, retiring as a Permanent Secretary of the Indian Ministry of Finance.

    Noriyuki Takayama is Professor Emeritus at Hitotsubashi University and Distinguished Scholar at the Research Institute for Policies on Pension and Aging. He holds a doctorate from the University of Tokyo. He is Director General and Chief Executive Officer the Project on Intergenerational Equity. He is known as a distinguished key player in the area Japanese pensions.

    Kiichi Tokuoka was an Economist in the IMF’s Asia and Pacific Department while this book was being written. He holds a doctorate from Johns Hopkins University.

    Edgars Volskis holds a doctoral degree in economics, which he was awarded in 2008 for research the area of pensions in Latvia. He is an author of numerous articles and substantial research on public social insurance topics published in central and eastern Europe. For the last 14 years, he has worked as Public Accountant and Advisor in Big 4 firms’ practices in the Baltics, Belarus, Slovenia, Croatia, and Bosnia, mostly in the banking and insurance industries.

    Mitch Wiener is a Senior Social Protection Specialist in the World Bank’s Indonesia Office, focusing on assisting the Indonesian government with implementation of its national social security system, design and financing of its proposed national social health insurance and pension programs, and reform of its civil service pension schemes. He is a Fellow of the Society of Actuaries and has extensive experience in design, financing, and administration of public and private pension plans and health insurance programs. He previously worked as a consultant with various international development organizations on pension, social sector, and financial sector reform projects.

    Xuejin Zuo is the Director of the Institute of Economics at the Shanghai Academy of Social Sciences, from which he also received his master’s degree in economics in 1982. He received his doctorate in economics from the University of Pittsburgh in 1989. His research focuses on population economics, China’s social security program reforms, and urban and regional studies.

    Index

    [Page numbers followed by b, f, n, or t refer to boxed text, figures, footnotes or tables, respectively.]

    A

    Actuarial fairness, 9, 9n

    Adequacy of pension system

    • in Australia, 23

    • in China, 303

    • in East and Southeast Asian countries, 132–34, 284–85

    • in Europe, 182

    • in India, 319, 321

    • in Indonesia, 25–26, 285, 330–31

    • in Korea, 232–33, 285

    • in Malaysia, 285 old-age dependency ratios, 32

    • in Philippines, 285 sustainability of pension system and, 195, 196, 198, 248

    • in Thailand, 285

    • in Vietnam, 285

    • See also Replacement rate

    Administrative costs

    • in East and Southeast Asian pension systems, 282–83

    • in funded and pay-as-you-go systems, 74–75, 166

    • in multipillar system in Eastern Europe, 166–67

    • significance of, 75

    • strategies for reducing, 78

    • U.S. Thrift Savings Plan, 79

    Advanced economies

    • demographic trends in, 4–5, 37

    • drivers of public pension spending in, 31, 33

    • goals of pension reform in, 3

    • list of, 31n. See also specific country old-age dependency ratios in, 37

    • pension system options in, 83

    • projected public pension spending in, 15, 35, 37f

    • public pensions as source of elderly income in, 87

    • public pension spending data sources, 49–50

    • public pension spending trends in, 31, 32–33, 33f, 34, 36f

    • rationale for raising retirement age in, 11, 44–48

    • recommended pension reforms for, 44–48, 45–46t

    • See also European countries, advanced

    Aging, population

    • in Australia, 263–64

    • in China, 299–300, 300f

    • in East and Southeast Asian countries, 273, 274f

    • economic implications of, 183 in European countries, 183, 188

    • implications for pensions systems of, 183

    • in India, 313 in Japan, 201, 202f

    • in Korea, 227, 227f

    • trends, 4

    • trends in advanced economies, 33

    • trends in emerging market economies, 34

    • See also Elderly, retirement incomes of;

      • Intergenerational equity; Old-age

      • dependency ratios; Poverty, elderly

    Annuities, 59

    Assessment of pension system performance

    • long-term modeling, 7–8

    • sustainability indicators, 7

    Australia’s pension system

    • Age Pension pillar, 255–56, 258–59, 264–66

    • assistance for low-income earners in,

      268, 269t benefit design, 250–51, 256, 258–59, 264

    • contributions, 261, 268

    • coverage, 259, 259f, 260–61

    • demographic trends and, 4, 263–64

    • employer contributions to, 23, 257–58

    • equity issues in, 22, 269–71

    • evolution of, 258–61

    • future challenges for, 22–23, 263–67

    • immigration policy and, 263

    • income streams in retirement under, 261–63

    • indigenous Australian participation in, 270–71, 271t

    • minimum income for required contributions, 270

    • parental leave pay and, 270

    • pension eligibility age, 256, 259

    • private pension pillar, 256–58, 260–61, 266–67

    • projected public pension spending, 264–66, 265f

    • recent reforms, 267–68

    • self-employed persons in, 22, 23, 257, 270

    • strategies for widening coverage of, 23

    • strengths and weaknesses of, 271–72

    • structural characteristics of, 22, 255–58, 257t

    • superannuation scheme in, 22, 23

    • sustainability of, 22, 266–67

    • tax policy and, 256, 258, 261, 266–68, 269

    • transparency of, 264

    Austria’s pension system

    • elderly incomes and, 184, 186

    • public spending in, 35, 41

    • recent reforms in, 41

    Automatic adjustment

    • in Denmark, 103b

    • in Germany, 103b

    • in Japan, 205, 214–15

    • in Korea, 235

    • in Netherlands, 103b

    • in pay-as-you-go defined-benefit system, 103, 103b

    • rationale, 103, 103b, 110, 193

    • types of, 194b

    Automatic enrollment, 78, 96

    Averting the Old-Age Crisis, 156–57, 160

    B

    Belgium

    • public pension spending in, 35

    Benefit designs

    • adjustments for women, 18, 107–8, 109b, 270

    • in Australia’s public pension, 256, 258–59, 264

    • better targeting of, to support neediest citizens, 195

    • in China’s pension system, 295, 302–3

    • cost-of-living adjustments in U.S., 140

    • in Indonesia, 329t

    • inflation adjustment, 192–93

    • Japan’s, 203–4

    • monthly payment versus lump-sum payment, 134, 135f

    • reforms in European countries, 192–93

    • reform trends, 6b

    • in Russia’s pension system, 373

    • See also Replacement rates

    Brazil’s pension system

    • alternative reform options for, 28, 381, 391–95

    • challenges for, 27, 381, 397

    • contributions, 382

    • coverage, 381–82, 383

    • distributional effects of, 383–84

    • equity issues in, 395–97

    • labor force participation rates and, 40

    • macroeconomic implications of recent reforms in, 386–91

    • management of, 385n

    • poverty reduction and, 383

    • Previdência Complementar, 384–85

    • public debt financing of, 387–90, 388f, 389f

    • public spending on, 41

    • recent reforms to, 27, 41, 384–86

    • Regime Geral de Previdência Social, 381–82, 384–85

    • Regimes Próprios de Previdência Social, 381–82, 384–85, 386

    • replacement rates, 393–95, 394f 397

    • retirement age, 384n, 393, 396f

    • spending, 27, 382–83, 383f

    • structural characteristics of, 27, 381–83, 382t

    • survivor benefits, 397

    Bulgaria’s pension system, 157n

    • projected elderly poverty in, 95

    • projected public spending on, 35

    C

    Canada’s pension system

    • Old Age Security program in, 76n

    • public spending, 41

    • recent reform program, 41

    Center for Strategic and International Studies, 117, 118

    Central and Eastern European countries

    • cost of transition to funded system in, 162–70

    • fiscal outcomes of structural pension reforms in, 19

    • pension reforms following financial crisis in, 159

    • See also specific country

    Chile’s pension system

    • administrative costs, 166, 167

    • benefit design, 278, 279b

    • lessons from, 77b

    • public spending in, 35, 41

    • recent reform program, 41, 77b

    • structural characteristics of, 74, 76

    China’s pension system

    • adequacy of benefits in, 303

    • Basic Pension System, 133, 134

    • beliefs about responsibility for retirement security and, 121, 122, 123–24, 125, 129

    • benefit design, 295, 297, 298, 302–3

    • coverage, 23, 295, 296t, 297, 298, 304

    • demographic trends and, 17, 120, 298–300, 299f, 300f

    • equity issues in, 17, 23, 286–87, 302–4

    • evolution of, 293–94

    • future challenges for, 17, 301–2, 310

    • Government Insurance for public employees, 293–94, 298

    • government subsidization of, 300–301

    • implicit pension debt and, 285–86, 301–2

    • institutional capacity in, 24

    • intergenerational financial transfers and, 118–19

    • local schemes for migrant workers, 295, 303

    • National Social Security Fund, 281

    • New Rural Pension, 293, 295–97, 302, 303

    • noncontributory pension for elderly, 305–7

    • old-age dependency ratios in, 300

    • Pension for Urban Residents, 293, 295–96, 297–98, 302, 303

    • Pension for Urban Workers and Staff, 293, 294–95, 296t, 302, 304, 305, 310

    • portability of benefits for migrant workers, 302, 303–4

    • proposal for National Basic Pension, 307

    • prospects for transitions to funded pension system in, 133

    • recent reforms in, 304–5

    • recommendations for reforms in, 24–25, 76, 80–81, 305–8, 310

    • replacement rate, 284, 308

    • retirement age, 135

    • risk allocation in, 295, 302

    • Social Insurance Law, 303, 304

    • structural characteristics of, 23, 122, 278, 281, 293, 301t, 309–10

    • transition to five-pillar system, 308–9b

    • See also East and Southeast Asia

    Citizen’s pension. See Social pensions

    Colombia’s pension system

    • projected public spending in, 35

    • recent reforms of, 41

    Compliance costs, 283

    Contributions to pension

    • in Australia, 261, 268

    • automatic adjustment, 194b

    • in Brazil, 382

    • in East and Southeast Asian countries, 278, 280f

    • future challenges for European pension plans, 197

    • gender differences in, 9, 23, 105–6, 107, 184

    • growth impact of, 216–17

    • in Indonesia, 325, 329t, 330f, 343

    • intergenerational equity and rates of, 212

    • international comparison, 212f

    • in Japan, 203, 205f, 206–7, 211–12, 216–17, 220

    • in Korea, 226, 229, 231t, 234, 235t

    • labor market trends and, 6

    • in Latvia, 348–51, 350t, 353–54, 355, 356

    • in Russia, 368f 369

    • in Singapore, 240

    • in social pension systems, 76

    Cost-of-living adjustments, 140

    Coverage

    • in Australia, 23, 259, 259f, 260–61

    • in Brazil, 381–82, 383

    • in China, 23, 295, 296t, 297, 298, 304

    • in East and Southeast Asia, 23, 24, 283–84, 284f, 289

    • in India, 25, 313, 314t, 318

    • in Indonesia, 25, 328, 332, 333t

    • in Korea, 224, 225f, 225t, 231–32

    • in Latvia, 355

    • in Russia, 27

    • in Singapore, 240

    Croatia’s pension system, 157n

    Cyprus, 94, 95

    Czech Republic’s pension system, 19

    • administrative costs of, 167n

    • elderly poverty and, 95, 184, 185

    • evolution of, 157

    • labor force participation rates and, 40

    • public spending on, 35, 41

    • reforms after 2008 financial crisis, 41, 155–56, 159

    • retirement age, 190

    • transition to multipillar system, 170

    D

    Defined-benefit systems

    • definition of, 13

    • equity goals of pension reform and, 13

    • government liability risk in, 41–43

    • in India, 318–19

    • reform trends in, 6b

    • survivor benefits in, 109

    • See also Funded defined-benefit occupational systems

    Defined-contribution systems

    • definition of, 13

    • equity goals of pension reform and, 13

    • gender equity issues in, 108n

    • in India, 314

    • reform trends in, 6b

    • replacement rate adequacy in, 43–44

    • See also Funded defined-contribution systems

    Demographic trends

    • beliefs about responsibility for retirement security and, 119–21

    • challenges for Australia’s pension system in, 263–64

    • challenges in projecting, 38–40

    • in China, 17, 298–300, 299f

    • in East and Southeast Asia, 18, 23, 273, 274f, 275t

    • in elderly poverty, 17

    • in Europe, 181, 183–84

    • implications for pension systems, 4–5

    • in India, 313

    • in Indonesia, 336, 341, 341f

    • in Japan, 4, 144, 201

    • in Korea, 227–28, 227f

    • in Latvia, 348, 348f

    • pension system reform rationale, 3

    • public pension spending trends and, 32

    • retirement expectations of young workers, 18

    • in Russia, 369, 370f

    • in Singapore, 22, 244–45, 250

    • See also Aging, population; Fertility; Life expectancy; Old-age dependency ratios

    Denmark’s pension system

    • automatic adjustment mechanism in, 103b

    • elderly incomes, 186

    • retirement age, 190

    Disability, persons with, 207, 209–10 pension reform considerations, 12

    Diversification strategy in Eastern Europe, 19–20, 170–73, 174, 186

    Divorce rates in Europe, 182, 184 Divorced wives, pensions for, 108

    E

    East and Southeast Asia

    • adequacy of income replacement in pension systems of, 132–34, 284–85

    • administrative and transaction costs of pension systems in, 282–83

    • attitudes toward elder care in, 125f

    • beliefs about responsibility for retirement security in, 118, 122–26, 123t, 132–33

    • benefit plans of pension systems in, 278

    • child-bearing trends in, 120f

    • contribution rates, 278, 280f

    • data sources on retirement planning in, 117, 118

    • demographic trends in, 18, 23, 273, 274f, 275t

    • equity issues in pension systems of, 286–88

    • evolution of pension systems in, 280–81

    • expectations of future retirees in, 126–31, 126f, 127f, 128f, 129t, 130f

    • family-based old-age support in, 18, 23, 118–21, 274–75

    • fiscal considerations in pension reform in, 288

    • foreign assets in pension funds of, 290

    • future challenges for pension systems in, 117, 131, 136, 273, 283–88, 291

    • globalization risks in, 275–77

    • institutional capacity for pension system management, 283, 288–89

    • intergenerational financial flows in, 119

    • monthly benefits versus lump-sum payments in, 134, 135f

    • pension assets in, 281, 281f

    • pension system coverage in, 283–84, 284f, 289

    • pension system governance in, 278

    • performance of pensions systems in, 23

    • poverty reduction among elderly in, 290

    • prospects for transitions to funded pension systems in countries of, 133–34

    • recommendations for pension system reforms for, 24, 288–91

    • redistributive goals of pension systems in, 278

    • replacement rates in, 284, 285f

    • retirement age policies in, 18, 23, 135–36, 136f, 277, 277t

    • risk allocation in pension systems of, 134, 278–80

    • risk of elderly poverty in, 131–32

    • structural features of pension systems of, 277–78, 280

    • sustainability of pension systems in, 285–86, 289

    • urbanization trends in, 275, 276f

    • See also specific country

    Eastern European countries

    • diversification strategy of, 19–20, 156, 170–73

    • funding gap in transition to pension privatization in, 156, 161–62, 167–70, 169f

    • lessons from pension privatization experiences of, 174

    • pension privatization policies in, 156–57, 160–61

    • pension reforms after 2008 financial crisis, 155–56, 157–61

    • See also Central and Eastern European countries; specific country

    Economic development

    • growth impact of reform options in Japan, 216–18, 217f

    • in Indonesia, 337

    • pension design and, 81–83, 85

    • population aging and, 183

    • in sustainability of pension system, 247–48

    Educational attainment

    • elderly poverty rates and, 89–90, 90f

    • retirement age and, 11

    Egypt, 35

    Elder care

    • attitudes toward, in East Asia, 125, 125f

    • beliefs about responsibility for, in East Asia, 119

    • pension credit for, 107

    Elderly, retirement incomes of

    • challenges for East and Southeast Asian countries, 273

    • Chile’s reforms to protect, 76, 77b

    • demographic patterns and, 17

    • East Asian tradition of family-based support and, 18, 23, 118–21

    • in European countries, 184–86

    • intergenerational financial flows and, 119

    • in Korea, 227–29

    • objectives of public pension systems, 87

    • pension reforms to improve, 17

    • public pensions as source of, in advanced economies, 87

    • recommendations for East and Southeast Asia to improve, 24

    • replacement rates and, 17

    • risk of reform reversal and, 41

    • social assistance programs in India, 317, 318t

    • sources of, 186, 187f

    • See also Poverty, elderly

    Eligibility age. See Pension eligibility age

    Eligibility ratios, 41, 42f, 48

    Emerging market economies

    • challenges for, in pension policy design, 131

    • demographic trends in, 4–5, 37, 173n

    • drivers of public pension spending in, 31, 34, 34f

    • eligibility ratios in, 48

    • goals of pension system reform, 3

    • list of, 31n. See also specific country

    • low-income countries, illustrative pension system for, 82

    • middle-income countries, illustrative pension system for, 82–83

    • old-age dependency ratios, 32, 37

    • public pension spending data sources, 50

    • public pension spending in, 15, 31, 33–34, 35, 36f, 37f

    • rationale for raising retirement age in, 18

    • recommended pension reforms for, 44, 46–47t, 48

    • transition to multipillar structures in, 41

    Equity, pension system

    • advantages for civil service sector employees, 287

    • assessing policy effects on, 8

    • in Australia, 269–71

    • in Brazil, 395–97

    • changes in replacement rates and, 12

    • definition of, 8

    • design of reforms to promote, 16–20

    • in East and Southeast Asian countries, 286–88

    • impact of parametric adjustments on, 11–12, 19

    • impact of structural reforms on, 13 in Indonesia, 328, 340–41, 342

    • in Korea, 21

    • performance of Asian pension systems, 23

    • portability of benefits for migrant workers, 302, 303–4

    • in Russia, 372, 374, 376

    • in Singapore, 22, 245–47

    • in social pension systems, 13–14

    • trade-offs in reform, 3–4

    • See also Gender differences;

      • Intergenerational equity

    Estonia’s pension system

    • administrative costs, 167n

    • elderly incomes and, 186

    • labor force participation rates and, 40

    • projected elderly poverty in, 95

    • public spending on, 35, 41

    • recent reforms of, 41

    European countries, advanced

    • adequacy of pension systems in, 182

    • automatic adjustment mechanisms in, 193, 194b, 197

    • benefit reductions in pension plans of, 192–93

    • challenges for pensions systems of, 181–82, 188, 196, 197

    • demographic trends in, 20, 181, 183–84, 188

    • economic conditions of elderly in, 184–86, 185f

    • economic risks for women in, 184

    • evolution of pension systems in, 181

    • future prospects of pension reform, 20, 196–98

    • pension contributions in, 197

    • public education about pension system in, 197–98

    • recent pension reforms in, 188

    • reform strategies to balance adequacy and sustainability objectives in, 195, 196, 198

    • replacement rates in, 188

    • retirement age trends in, 181–82, 188–91, 189f

    • risks for pensions systems of, 183–88, 196, 197

    • sources of elderly income in, 186, 187f

    • See also Central and Eastern Europe;

      • European Union; specific country

    European Union

    • countries of, 87n. See also specific country

    • pension liabilities in, 111, 112f

    • projected replacement rate in, 87n, 94

    • public debt requirements for membership in, 160–61

    F

    Family-based old-age support

    • changing expectations in Asian countries, 18, 23

    • in India, 313

    • in Indonesia, 336

    Family structure

    • single-parent families, 182, 184

    • trends with implications for pension systems, 5, 182

    Fertility rates

    • in China, 299

    • in East and Southeast Asian countries, 273

    • in European countries, 181, 183

    • in Japan, 201

    • in Korea, 227

    • in Russia, 369

    • in Singapore, 244

    • trends, 4, 5, 32, 38–39

    Finland

    • elderly incomes in, 186

    • public pension spending in, 35, 41

    • recent pension reforms in, 41

    France

    • demographic trends, 4

    • elderly incomes in, 185, 186

    • projected elderly poverty in, 95

    • public pension spending in, 41

    • recent pension reforms in, 41

    Funded defined-benefit systems

    • in East and Southeast Asian countries, 278, 280, 289

    • in India, 314, 315, 317, 319 in Indonesia, 326, 327, 332, 342

    • intergenerational equity outcomes, 17–18, 104, 110

    • risk allocation in, 104

    • transition costs, 288

    Funded defined-contribution systems

    • challenges for transition to, in East Asia, 133–34

    • in China, 281, 297, 301, 305, 310

    • diversification rationale, 19–20

    • in East and Southeast Asia, 278, 280

    • equity issues in, 342

    • in India, 314, 316–17, 318

    • in Indonesia, 327, 332

    • intergenerational equity outcomes, 17–18

    • in Latvia, 26, 348–51, 353f

    • risk allocation in, 104–5, 110, 171, 248, 289

    • in Russia, 26–27, 365–66

    • in Singapore, 244, 248

    • sources of risk in, 67, 110, 319

    • See also Notional defined contribution systems

    Funded mandatory defined-benefit plans risk in, 67

    G

    GDP, pension system balance as share of

    • in Asia, 281, 281f

    • in Europe, 161, 168, 170, 181

    • in India, 319 in Indonesia, 335–36

    • in Italy, 143f

    • in Japan, 111–13, 113f, 143f, 144, 203

    • in Latvia, 352, 354, 354f

    • in Poland, 159

    • in Singapore, 240–41

    • in Slovak Republic, 162, 170

    • as sustainability indicator, 7

    • trends, 43

    • in U.S., 142, 143f

    GDP, pension system spending as share of

    • in Australia, 264–65, 267

    • in Brazil, 27, 381–82, 385, 391

    • in Chile, 68

    • in China, 302, 306

    • in India, 313, 316t

    • international comparison of, 383f

    • in Japan, 202, 206, 207, 209, 211, 212, 213

    • in Korea, 233, 236t

    • in Russia, 27, 366, 367–68, 369–75

    • in Singapore, 251

    • in social pensions, 13

    • trends and projections, 15, 31, 32–34, 33f, 35, 35f, 36f, 37, 38, 40–41, 50

    Gender differences

    • at-risk-of-poverty rate, 89, 90f

    • in beliefs about responsibility for retirement security, 124–25

    • in benefit distribution in Japan, 105–6, 105f, 205

    • disparities in Russia’s pension system, 372

    • in elderly poverty in Japan, 221

    • life expectancy, 9, 97, 106

    • pension policy design decisions, 70, 110

    • in pension system equity, 9

    • replacement rate patterns, 91–92, 91f

    • in retirement age, 372, 374

    • See also Women

    Generational accounting, 139–40, 149

    Germany’s pension system

    • automatic adjustment mechanism in, 103b

    • coverage, 283

    • demographic trends and, 4, 38–39, 39f

    • public spending, 41

    • recent reform program, 41

    Global financial crisis (2008–09)

    • effects in Latvia, 356, 357–58, 360

    • effects in Russia, 363

    • impact on European economies, 187–88

    • impact on public pension spending, 40n

    • implications for future of European pension systems, 182

    • pension system reforms prompted by, 3

    • reform reversals in Eastern Europe after, 155–56

    Global Integrated Monetary and Fiscal model, 216, 386

    Globalization, 275–77

    Governance, pension system

    • in Brazil, 385n

    • capacity issues in Asia, 24, 288–89

    • in East and Southeast Asia, 282–83

    • importance of, 14, 16, 74

    • in India, 315, 316, 322, 323

    • in Indonesia, 326–27, 335–36, 338–40, 342–43

    • in Korea, 229 in Latvia, 359

    • need for transparency in, 14

    • principal-agent problems in, 14

    • private pensions, 74

    • strategies for effective, 14–15

    • technical capacity for implementation, 73–74

    • See also Administrative costs

    Greece

    • elderly poverty in, 95, 184–85

    • public pension spending in, 41

    • recent pension reforms in, 41

    • retirement age in, 190

    H

    Health systems

    • recent trends in, 4

    • reforms prompted by Great Recession (2009), 3

    Hong Kong

    • beliefs about responsibility for retirement security in, 121, 122

    • expectations of future retirees in, 126, 128, 131

    • retirement age, 135

    • structural characteristics of pension system, 122

    Horizontal equity, 8–10 Hungary’s pension system

    • administrative costs of, 167

    • costs of transition to funded system, 163, 169–70

    • effects of global financial crisis, 159

    • elderly incomes under, 186

    • evolution of, 157n

    • labor force participation rates and, 40

    • nationalization of pension system, 19, 155, 174

    • public spending, 35, 41

    • recent reforms in, 41

    I

    Iceland’s pension system

    • elderly incomes under, 185, 186

    • public spending on, 41

    • recent reforms in, 41

    • retirement age, 190

    Implementation of reforms

    • China’s transition to five-pillar system, 308–9b

    • financial capacity considerations, 73

    • importance of, 16, 73–74

    • mistakes to avoid in, 84–85

    • strategies for success in, 16–17

    • technical capacity considerations, 73–74

    Implicit pension debt, 68–69, 162–64, 174

    • in China, 285–86, 301–2

    • in East and Southeast Asian countries, 285–86

    India’s pension system

    • adequacy, 319, 321

    • challenges for, 25, 313, 318–20

    • civil service employees in, 315–16, 316t coverage in, 25, 313, 314–15, 314t, 318

    • demographic trends and, 40, 40f, 313

    • Employees’ Pension Scheme, 316, 317

    • Employees’ Provident Fund, 316–17

    • Family Pension Scheme, 317

    • financing problems in, 318–19

    • informal sector employees in, 314–15, 320

    • management of, 315, 316, 322, 323

    • National Pension Scheme, 314–15, 318, 320, 321–22

    • New Pension System, 25

    • occupational schemes, 315–17

    • old-age dependency ratios in, 313n

    • Pension Fund Regulatory and

      • Development Authority, 315

    • portability of accounts in, 322 recommendations for reform in, 25, 321–23

    • reform objectives, 321

    • social acceptance of, 319

    • social assistance programs, 317, 318t

    • spending on, 313

    • stakeholder involvement in reform implementation in, 322–23

    • structural features of, 314–17

    • Swavalamban Scheme, 314–15

    • voluntary contributions, strategies to improve, 320

    • women in labor market of, 25, 26

    Indonesia’s pension system

    • adequacy, 25–26, 285, 330–31

    • assets, 281, 335–36, 335t

    • benefit design, 278, 279b

    • coverage of, 25, 328, 332, 333t

    • current benefits and contribution rates, 278, 325, 329t, 330f, 331, 343, 345t

    • current problems with, 328–36

    • demographic trends and, 334, 335f 336, 341, 341f

    • disbursement patterns, 332

    • economic growth and, 337

    • electronic ID program for, 342–43

    • Employer Pension Funds, 327

    • equity issues in, 25–26, 287, 328, 340–41, 342

    • evolution of current programs, 326–28

    • governance capacity for, 337

    • informal workers in, 334, 340

    • institutional capacity in, 24

    • investments, 335t

    • management of, 326–27, 335–36, 338–40, 342–43

    • National Social Security System, 325–26

    • old-age dependency ratio, 328

    • old-age savings program, 331–32, 331t, 336, 340–41

    • private programs in, 327, 332, 333–34, 333t, 343–44

    • rationale for reform of, 336–37

    • reform objectives, 338

    • reform proposals, 25–26, 338–44, 346t

    • replacement rate, 284

    • retirement age, 277, 334–35

    • risk management in, 339

    • Social Security Administrative Bodies, 325–26, 338–40, 344

    • structural characteristics of, 23, 278, 280, 345t

    • sustainability of, 328–35, 341

    • tax policy, 343, 344

    • transparency of, 335

    • See also East and Southeast Asia

    Inflation adjustment, 192–93

    Information, imperfection and asymmetry

    • in, 60, 61, 62–63

    Insurance

    • as function of pensions, 59

    • to protect private pension participants, 43

    Intergenerational equity

    • analytical framework for assessing, 150–52

    • benefits clawback to achieve, 148–49, 206, 219

    • in Brazil’s pension system, 395

    • comparison of pension policy effects on, 17–18

    • concept of fairness in, 10

    • contribution rates and, 212

    • cost of transition to funded pensions, 167–68

    • in East and Southeast Asian pension systems, 287–88

    • in funded defined-benefit occupational systems, 104

    • generational accounting to evaluate, 139–40, 149

    • horizontal and vertical aspects of, 8–10

    • in Italy’s pension system, 145f, 147, 148

    • in Japan’s pension system, 145f, 147–48, 201, 204–5

    • in Korea’s pension system, 229–31, 233

    • outcomes of pension reforms, 18–19, 139

    • in pay-as-you-go defined-benefit system, 102, 103, 110

    • pension policy choices, 69–70

    • recent pension reforms and, 4

    • strategies to promote, 148–49

    • in U.S. pension system, 144–46, 145f

    Ireland’s pension system

    • elderly incomes under, 186

    • public spending, 41

    • recent reforms in, 41

    • replacement rate, 44, 48

    • retirement age, 190

    Italy’s pension system

    • elderly incomes under, 186

    • equity issues in, 18–19

    • evolution of, 141

    • intergenerational equity in, 145f, 147, 148

    • multigenerational households in, 119

    • net pension liabilities, 143–44, 143f

    • projected public pension spending, 35

    • public spending, 41

    • recent reform program, 41, 147

    • replacement rate, 48

    • retirement age, 141, 190

    • structural characteristics of, 141

    J

    Japan’s pension system

    • automatic adjustment mechanism in, 103b, 205, 214–15

    • benefit design, 203–4, 219

    • benefits for dependent spouses in, 213, 220

    • benefit spending in, 202, 204f, 205f

    • contributions to, 203, 205f, 206–7, 211–12, 212f, 216–17, 220

    • coverage, 283

    • demographic trends and, 4, 20, 40, 40f, 111, 144, 201, 202f

    • elderly poverty and, 221

    • Employees’ Pension Insurance program, 201, 203, 204, 207

    • equity outcomes of reforms in, 18–19

    • evolution of, 141–42

    • excess pension liabilities in, 111–15, 112f, 114t

    • fertility rate and, 111, 112f

    • future challenges for, 20, 201, 204–5

    • gender differences in benefit distribution in, 105–6, 105f, 205

    • government subsidy to, 203, 205n, 206, 210, 211

    • growth impact of reform options in, 216–18, 217f

    • intergenerational equity in, 145f, 147–48, 204–5

    • labor force participation rates and, 40

    • life expectancy and, 201, 207, 208f

    • lifetime income trends, 111, 111f, 112f

    • methodology for calculating fiscal savings from reforms to, 219–20

    • Mutual Aid Association, 203, 204

    • National Pension program, 202, 207

    • net pension liabilities, 143f, 144

    • old-age dependency ratios, 201

    • participation in, 202–3

    • pension adjustments for women, 108–9, 109b

    • pension eligibility age, 142, 201, 207–10, 213, 219

    • private pension participation in, 210, 210n

    • projected disability rates in, 207, 209–10

    • public spending on, 35, 41

    • recent reform program, 41, 113–15, 142, 205–6

    • reform options for, 20, 201, 206–13, 207t

    • replacement rates in, 147–48, 201–2, 206, 210–11, 211f, 216, 220

    • structural characteristics of, 202–4, 203f

    • tax treatment of pension income in, 212–13, 219–20

    K

    KiwiSaver, New Zealand, 79

    Korea

    • beliefs about responsibility for retirement security in, 119, 122, 124, 125, 133

    • elderly in, financial status of, 227–28

    • expectations of future retirees in, 126–27, 127, 128, 131

    • fertility rate in, 227

    • intergenerational financial transfers in, 118–19

    • life expectancy in, 227

    • multigenerational households in, 118–19

    • pension system. See Korea’s pension system

    Korea’s pension system

    • adequacy of, 232–33, 285

    • assets, 281

    • automatic adjustment mechanism in, 235

    • basic livelihood security system, 223

    • benefit design, 232, 278, 279b

    • contributions to, 224–25, 226, 229, 231t, 234, 235t

    • demographic trends and, 227–28, 227f

    • equity issues in, 21, 223, 229–31, 233, 287

    • evolution of, 224–25, 237

    • implicit pension debt, 285–86

    • management of, 229

    • national pension, 223, 224, 229–32, 237

    • old-age dependency ratios, 227

    • old-age pension, 223, 224, 226, 228–29, 237

    • participation in, 224, 225f, 225t, 231

    • private pension contributions in, 223

    • projected public pension spending, 35

    • prospects for future reform of, 226–27, 237–38

    • recent parametric reforms, 225–26

    • reform objectives, 232–34

    • reform options, 234–37, 235t, 236t

    • replacement rates, 134, 226, 284

    • retirement age, 135, 136, 226, 234, 277

    • roles of pillars in, 231–32

    • structural characteristics of, 23, 122–23, 223, 224t, 235–37, 278, 280

    • sustainability of, 21, 229–32, 230t, 233

    • See also East and Southeast Asia

    L

    Labor force participation

    • barriers to elderly, 96–97

    • in calculation of public pension expenditure identity, 49

    • concerns for adequacy of European pension systems, 182

    • data sources, 52–53

    • effects of global financial crisis on, 187–88

    • of elderly, 17, 108, 109t

    • of elderly, strategies for increasing, 191, 196–97

    • globalization effects on Asian, 275–77

    • Latvia’s pension system and, 26, 358

    • public pension spending and, 40

    • in Singapore, 245

    • trends in advanced economies, 33

    • trends in emerging market economies, 34

    • of women, 5, 33, 89, 97, 108, 182

    • See also Old-age dependency ratios

    Latvia’s pension system

    • challenges for, 26, 256–57, 348

    • citizens’ understanding of, 359–60

    • contributions, 26, 348–51, 350t, 353–54, 355, 356, 356f

    • demographic trends and, 38f, 39, 348, 348f

    • global financial crisis (2008–09) and, 356, 357–58, 360

    • investment restrictions, 26, 352, 357–58

    • investment returns, 352–53

    • labor market participation and, 26, 358

    • management costs, 359

    • notional defined contribution program in, 347–48, 356

    • outcomes of recent reform program, 352–55, 360

    • participation in, 355, 355f

    • performance of, 26

    • private funds in, 352

    • public spending on, 35, 41

    • recent reforms in, 41, 347

    • recommendations for reform of, 26, 357–61

    • replacement rates, 351–52, 357

    • retirement age, 348

    • structural characteristics of, 26, 347–48

    • sustainability issues in, 256

    • wage growth and, 351t

    Liabilities, pension

    • analytical framework for assessing, 150

    • European Union’s, 111, 112f

    • Italy’s, 143–44, 143f

    • Japan’s, 111–15, 114t, 143f, 144

    • measurement of, 7n

    • risk of government default, 171–72

    • sustainability assessment, 7

    • in U.S., 142, 143f

    Life expectancy

    • in Australia, 263

    • benefits linked to, 194b

    • in East and Southeast Asian countries, 273, 277

    • in Europe, 181

    • gender differences, 9, 97, 106

    • in Indonesia, 334, 335f, 336, 341

    • in Japan, 201, 207, 208f

    • in Korea, 227

    • pension eligibility age and, 208, 209f

    • projections, 37, 38, 40

    • in Russia, 11n, 369

    • in Singapore, 244

    • socioeconomic status and, 11

    • trends, 4.5, 11

    • in United States, 11n

    Lithuania’s pension system, 35, 41

    Low-income countries, illustrative pension systems for, 82

    Low-wage workers, strategies for increasing pensions of, 106

    Luxembourg’s pension system, 35, 185, 186

    M

    Malaysia’s pension system

    • adequacy, 285

    • assets, 281

    • beliefs about responsibility for retirement security in, 121, 122, 124, 125, 133

    • benefit design, 278, 279b

    • contributions to, 278

    • Employees Provident Fund, 278–80

    • equity issues in, 287

    • expectations of future retirees in, 127, 128, 129, 131

    • replacement rate, 284

    • retirement age, 135, 277

    • risk allocation in, 278–80

    • structural characteristics of, 23, 122, 278

    • See also East and Southeast Asia

    • Mexico’s pension system, 43

    • Middle-income countries, illustrative pension systems for, 82–83

    Migration

    • internal migration in China, portability of pension benefits and, 302, 303–4 trends, 4–5, 32

    • See also Rural-urban migration

    N

    National Employment Savings Trust, U.K., 79

    Netherlands’ pension system

    • automatic adjustment mechanism in, 103b

    • elderly incomes under, 185, 186

    • public spending on, 35, 41

    • recent reforms in, 41

    • retirement age, 78, 190 New Zealand’s pension system, 35, 79

    • Noncontributory basic pension. See Social pensions

    • Nonrational actors in pension market, 60, 61–63

    Norway

    • elderly incomes in, 186

    • projected public pension spending in, 35

    • retirement age in, 190

    Notional defined contribution systems

    • advantages of, 80

    • country examples of, 80

    • defining characteristics of, 79–80, 104

    • intergenerational equity and, 17–18

    • Italy’s, 141

    • Latvia’s, 348–49, 356

    • partially funded, 79

    • recommendations for China, 80–81

    • as reform option for Korea, 236

    • risk allocation in, 79, 80

    • Russia’s, 365

    O

    Old-age dependency ratios

    • in calculation of public pension expenditure identity, 49

    • in China, 300

    • drivers of change in, 32

    • in India, 313n

    • in Indonesia, 328

    • in Japan, 20, 201

    • in Korea, 227

    • in Latvia, 348, 348f

    • projections, 37

    • in Russia, 369

    • source of intergenerational inequity, 10 trends, 5, 5f, 32, 35f

    Organization for Economic Cooperation and Development, 171

    • demographic trends in, 64, 202f

    • global financial crisis outcomes in, 187

    • pension age trends, 11, 78, 189

    • pension spending in, 36b, 87

    • public pensions as source of elderly income in, 87

    P

    Parametric adjustment

    • definition of, 6b

    • effects on equity, 11–12, 19, 148

    • effects on sustainability, 10–11

    • types of, 6b

    • See also Benefit designs; Contribution patterns; Pension eligibility age; Replacement rates

    Parental leave

    • in Australia, 270

    • pension calculations and, 9, 18, 23

    Part-time employment

    • in Japan, 205, 205n

    • pension eligibility for, 106–7

    • pension system equity and, 10

    Pay-as-you-go defined-benefit system

    • automatic adjustment in, 103, 103b

    • balance sheet approach to, 102, 102n

    • economic growth and, 102

    • intergenerational equity outcomes, 17–18, 102, 103, 110

    • Latvia’s, 26

    • risk in, 67–68

    Pay-as-you-go systems, 64

    • administrative costs, 166–67

    • automatic adjustment in, 110

    • costs of transition to funded system, 162–64, 174

    • economic growth and, 110

    • implementation capacity for, 73

    • intergenerational equity of, 110

    • Italy’s, 141

    • Japan’s, 142

    • notional defined contribution accounting in, 16

    • rate of return in, 132

    • reform trends, 6b

    • strategies for successful implementation of, 17

    • sustainability of, 110

    Pension eligibility age

    • in Asia, 277, 277t

    • in Australia, 256, 259

    • countries likely to benefit from reform of, 45–47t

    • in Japan, 142, 201, 207–10, 213, 219

    • in Korea, 226, 234

    • recommendations for raising, 11, 12

    • in Russia, 373–75, 375f, 377

    • trends, 33, 41, 42f

    • See also Retirement age

    Pension reform

    • consideration of country circumstances in, 16

    • costs of transition to funded system, 41, 68–69

    • effects on projected spending of enacted reforms, 37–38, 40–41

    • holistic approach to, 16, 60

    • lessons from country case studies, 20–28

    • to mitigate effects on elderly poverty, 96–97

    • parametric adjustments, 6b

    • to promote sustainability and equity, 16–20

    • rationale, 3, 44

    • recent, effects on projected spending, 32

    • recent trends in, 4

    • recommendations for, by country, 44–48, 45–47t

    • risk of reversal, 40–41

    • structural, 6b

    • trade-offs in, 3–4

    • typology of, 6b

    • See also Parametric adjustment

    Pension systems, generally

    • approaches to risk allocation in, 66–68

    • assessment methodology, 282

    • design constraints, 69, 72–73

    • design options, 75–81

    • determinants of viability of, 6–7

    • economic development status and choice of, 81–83, 85

    • effects of population aging on, 183–84

    • objectives of, 59–60, 83–84, 282

    • principles of analysis for, 60–61

    • problems of individual decision-making in, 61–63

    • public understanding of, 197–98

    • role of government in, 69–73, 85

    • role of output in, 63–66

    • role of private sector in, 71–72

    • simple savings plans, 78–79

    • strategies to improve financing of, 84

    • See also Governance, pension system; Public pension spending; specific country

    Philippines’ pension system

    • adequacy, 285

    • benefit design, 278, 279b

    • implicit pension debt, 285–86

    • pension age eligibility, 277

    • replacement rate, 284

    • structural characteristics of, 23, 278

    • See also East and Southeast Asia

    Poland’s pension system, 157n

    • administrative costs, 166n, 167, 167n

    • elderly incomes under, 184, 186

    • multigenerational households and, 119

    • projected elderly poverty in, 95

    • public spending on, 34, 41

    • reforms after 2008

    • financial crisis, 41, 155, 159

    • retirement age, 190

    • transition to multipillar system, 168n, 170

    Portugal, 41, 186

    Poverty, elderly

    • in Brazil, 383

    • in Chile, 77b

    • comparative risk by age group, 90–91, 91f

    • current patterns of, and public pension replacement rates, 91–92, 91f

    • data sources on at-risk rates of, 88–89

    • determinants of, 20

    • educational attainment and, 89–90, 90f

    • effectiveness of pay-as-you-go systems in reducing, 102

    • in European countries, 184–86, 185f

    • future of East Asian pension systems, 131–32

    • gender differences, 89, 90f, 106, 221

    • in Japan, 210, 221

    • in Korea, 21, 228

    • mitigating negative effects of pension reform on, 96–97

    • population at risk before and after social transfers, 88–89, 89f

    • projected declines in replacement rate and, 94–96, 95f

    • reduction of, pension system design for, 69, 72–73, 76, 81–82, 84, 87

    • reform needs of East and Southeast Asian pension systems to prevent, 290

    • replacement rate reduction and, 12, 17, 41, 210

    • risk for women, 184

    • social assistance programs in India, 317

    • transmission of effects of changes in replacement rate on, 92–94, 98

    • trends, 3, 87, 89

    • See also Elderly, retirement incomes of

    Private pensions

    • in Australia, 256–58, 260–61, 266–67

    • challenges in pension system reform, 3–4

    • funding of, 43f

    • future challenges for advanced

    • European economies, 197

    • government role in, 74

    • implementation capacity for, 73

    • in Indonesia, 332, 333–34, 333t, 343–44

    • in Japan, 210n

    • in Latvia, 352

    • need for regulatory oversight of, 14–15

    • participation in advanced economies

    • with public pensions, 87

    • policy choices in pension system design, 71–73

    • public spending to cover shortfalls in, 41–43

    • replacement rate adequacy for, 43–44

    • trends in European economies toward, 193

    Privatization of pension systems

    • administrative costs, 166–67

    • diversification rationale for, 170–73

    • experiences in Central and Eastern European countries, 19–20

    • funding gap in transition to, 161–62, 162f, 167–70, 169f

    • implicit debt in transition to, 162–64

    • lessons from Eastern European experiences with, 174

    • policy reversals in Eastern Europe, 156, 157, 160–61

    • rationale in Eastern Europe, 156

    Productivity, 40

    Public pension spending

    • in Australia, 264–66, 265f

    • in Brazil, 382, 383–84, 383f

    • calculation of public pension expenditure identity, 49

    • to cover private pension shortfalls, 41–43

    • data sources, 49–50

    • demographic trends and, 32, 38–40

    • drivers of, 31, 33

    • effects of enacted reforms on, 37–38, 40–41

    • implicit pension debt in, 68–69

    • in India, 313

    • in Japan, 201, 202, 204, 204f

    • macroeconomic trends and, 40

    • projections, 15, 32, 35, 36–37b, 37–40, 37f, 44, 45–47t, 50–52

    • reform rationale, 3

    • in Russia, 370, 371f

    • in transition to funded pension system, 41, 68–69

    • trends, 15, 31, 32–34, 36f

    R

    Redistribution

    • in defined-contribution pensions, 13

    • in East and Southeast Asian pension systems, 23, 278

    • holistic approach to reforms to promote, 16

    • as objective of pension system, 60

    • outcomes of Brazil’s pension system, 383–84

    • pension policy design decisions, 3, 69–71

    • See also Equity, pension system

    Regulation

    • current oversight in Asian countries, 24

    • in East and Southeast Asian pension systems, 283

    • rationale for private pension oversight, 14–15

    • See also Governance, pension system

    Replacement rate(s)

    • in Brazil, 393–95, 394f, 397

    • in calculation of public pension expenditure identity, 49

    • in China, 284, 308

    • countries likely to benefit from reforms in, 45–47t

    • current patterns of elderly poverty and, 91–92, 91f

    • data sources, 88

    • in East and Southeast Asian countries, 284–85

    • elderly poverty and, 17, 94–96, 95f

    • equity issues in changing, 12

    • in European countries, 188

    • gender differences in, 91–92, 91f

    • international comparison of, 210, 211f

    • in Japan, 147–48, 201–2, 206, 210–11, 211f, 216, 220

    • in Korea, 226

    • in Latvia, 351–52, 357

    • projections, 94, 94f

    • public pension spending trends and, 34

    • rationale for reducing, 12

    • recommended, 284, 285f

    • risks for private defined-contribution plans, 43–44

    • in Russia, 368f, 369, 370–71, 371n, 373, 376

    • in Singapore, 242–43, 248–49

    • strategies for reducing, 12

    • trends in advanced economies, 33, 34, 35f, 41, 42f, 44

    • trends in emerging market economies, 34, 35f

    • See also Adequacy of pension system; Benefit designs

    Reserves, public pension, 14

    Retirement age

    • in Brazil, 384n, 393, 396f

    • equity outcomes of raising, 11–12

    • flexibility options in, 16, 77–78

    • gender differences, 108, 372, 374

    • incentives to influence workers’ decisions on, 11, 191–92, 195

    • in Indonesia, 334–35

    • in Latvia, 348

    • life expectancy and, 208, 209f

    • policy challenges in Europe, 196

    • policy trends in East Asia, 135–36, 136f

    • rationale for raising, 11, 18, 44–48, 77, 195

    • in Russia, 366–67, 372, 375n

    • trends, 11, 33, 78, 181–82, 188–91, 189f

    • See also Pension eligibility age

    Risk management

    • in China, 295, 302

    • conceptual approaches to, 66–68

    • diversification strategy, 171–72, 174

    • in East and Southeast Asian pension systems, 134, 278–80

    • in funded defined-benefit occupational systems, 104

    • in funded defined-contribution systems, 67, 104–5

    • in funded mandatory defined-benefit plans, 67

    • in Indonesia, 339

    • in notional defined contribution systems, 80

    • in pay-as-you-go defined-benefit system, 67–68

    • pension reform trends, 6b

    • pension system sustainability assessments, 7

    • to protect from government default, 171–72

    • to protect from output shock from demographic aging, 172–73

    • sources of pension system risk in Europe, 183–88, 193–94

    • sources of risk, 66b

    Romania’s pension system, 34, 157n, 170

    Rural areas

    • China’s pension plans for residents of, 23, 295–97

    • pension equity issues in Asia, 23, 286–87

    Rural-urban migration, 5

    • in Asia, 23, 275, 276f, 287

    • in Indonesia, 336

    Russia’s pension system

    • basic pension, 364

    • benefit design, 27

    • challenges for, 27, 363–64, 369–72

    • contribution rates, 368f, 369

    • coverage, 27

    • demographic trends and, 369, 370f

    • equity issues in, 372, 374, 376

    • funded defined-contribution component, 365–66

    • funding of, 366

    • global financial crisis and, 363

    • labor insurance component of, 365

    • old-age dependency ratios projections and, 369

    • recommendations for reform of, 27, 372–76, 377

    • reform objectives, 372

    • replacement rates, 368f, 369, 370–71, 371n, 373, 376

    • retirement age, 27, 366–67, 372, 373–75, 375f, 377

    • spending trends, 27, 367–69, 367t, 371f

    • strategies for increasing revenues in, 376

    • structural characteristics of, 26–27, 364–66, 365t

    • sustainability issues, 369–72

    • tax revenues for, 376, 376n

    S

    Same-sex marriage, 5

    Savings plans, 78–79

    Self-employed persons

    • in Australia’s pension system, 22, 23, 270

    • hiring of, to avoid employer’s pension obligation, 106–7

    Singapore Government Investment Corporation, 241–42

    Singapore’s pension system

    • accounts, 240–41, 240n

    • aggregate indicators, 240, 240t

    • assets, 281

    • beliefs about responsibility for retirement security and, 119, 122, 124, 133

    • benefit design, 278, 279b

    • Central Provident Fund, 134, 239, 240–41, 245–46, 248–49, 278–80

    • challenges for, 21, 22, 244–45

    • civil service and armed forces pension arrangements, 243–44

    • contribution rates, 240, 278

    • cost of adding social pension scheme to, 249–52, 251t

    • coverage, 240

    • CPF LIFE, 243, 243n, 246–47

    • demographic trends and, 22, 244–45, 250

    • economic growth and, 239

    • equity issues in, 245–47

    • expectations of future retirees in, 126, 128, 131

    • fiscal balances, 252, 252f

    • gender inequities in, 246–47, 249

    • interest rates credited to member’s balances in, 21–22, 241–43

    • labor force participation and, 244, 245

    • management of, 239, 241–42

    • multigenerational households and, 118–19

    • noncitizen population and, 244

    • payout-phase arrangements, 246–47

    • preretirement withdrawals from, 21, 241

    • recommendations for improving, 22

    • reform options, 245–53

    • replacement rate, 242–43, 248–49, 284

    • retirement age, 135, 136, 277

    • risk allocation in, 278–80

    • Saver Fund, 244

    • structural features of, 21, 23, 122, 239, 252, 278

    • sustainability issues in, 247–49

    • tax policy, 22, 245–46

    • traditional ethic of filial piety and, 120

    • transparency, 241–42, 248–49

    • treatment of foreign workers in, 22, 247

    • See also East and Southeast Asia

    Single-parent families in Europe, 182, 184

    Slovak Republic’s pension system

    • administrative costs, 167, 167n

    • elderly poverty and, 95, 185

    • funding gap, 162

    • public spending on, 41

    • reforms after 2008

    • financial crisis, 19, 41, 155, 157n, 159

    • transition to multipillar system, 168n, 170

    Slovenia’s pension system

    • elderly incomes under, 186

    • evolution of, 157

    • public spending on, 35, 41

    • recent reforms in, 41

    • transition to multipillar system, 169n

    Social pensions

    • advantages of, 76

    • conceptual basis of, 75

    • cost of adding, to Singapore’s pension system, 249–52, 251t

    • country examples, 76

    • defining characteristics of, 75

    • expense of, 13–14

    • rationale for, 13, 76, 249

    • recommendations for China, 305–7

    • strategies for ensuring affordability in, 76

    Socioeconomic patterns and trends

    • in East and Southeast Asia, 274–75

    • implications for European pension systems, 182

    • implications for pension systems, 5–6

    • retirement expectations of young workers, 18

    Socioeconomic status

    • beliefs about responsibility for retirement security and, 124

    • effects of raising retirement age mediated by, 11

    • life expectancy and, 11

    South Africa’s pension system, 43, 76

    Southeast Asia. See East and Southeast Asia; specific country

    Spain

    • multigenerational households in, 119

    • pension replacement rate in, 44

    • public pension spending in, 41

    • recent pension reforms in, 41

    Spending, pension. See Public pension spending

    Spouses, pension arrangements for, 108, 213, 220

    Structural reforms, 6b

    • fiscal outcomes in Central and Eastern European countries, 19

    Survivor benefits, 108–10

    Sustainability of pension system

    • adequacy of pension system and, 195, 196, 198, 248

    • assessing policy effects on, 7–8

    • in Australia, 266–67

    • in China, 300–302, 304, 310

    • design of reforms to promote, 16–20

    • in East and Southeast Asian countries, 285–86, 289

    • financial versus economic, 247–48

    • generational inequities generated by reforms to improve, 140

    • impact of parametric adjustments on, 10–11

    • impact of structural reforms on, 13–14

    • improvement in, as rationale for reform, 3

    • in India, 313

    • in Indonesia, 328–35

    • in Korea, 229–32, 233

    • in Latvia, 256

    • pay-as-you-go systems, 110

    • raising contributions to improve, 12–13

    • in Russia, 369–72

    • in Singapore, 248–49

    Sweden’s pension system

    • administrative costs of, 75

    • automatic adjustment mechanism in, 103b

    • projected elderly poverty in, 95

    • public spending, 41

    • recent reforms in, 41

    • structural characteristics of, 80, 104

    Switzerland’s pension system, 35, 43

    T

    Taiwan Province of China

    • beliefs about responsibility for retirement security in, 119, 121, 122, 124, 125, 129

    • expectations of future retirees in, 126, 127–28, 129, 131

    • intergenerational financial transfers in, 118–19

    • retirement age, 135, 136

    • structural characteristics of pension system, 122

    • See also East and Southeast Asia

    Tax policy

    • in Australia, 256, 258, 261, 266–68, 269

    • to cover cost of transition to funded pensions, 167–68

    • distortional effects of, 60

    • equity issues in Singapore’s, 245–46

    • in Indonesia, 343, 344

    • to influence retirement age decisions, 191–92

    • preferential treatment of pension income in Japan, 212–13, 219–20

    • to reduce replacement rates, 12

    • in Russia, 376, 376n

    Thailand’s pension system

    • adequacy, 285

    • benefit design, 278, 279b

    • contributions, 278

    • equity issues in, 287

    • pension age eligibility, 277

    • replacement rate, 284

    • structural characteristics of, 23, 278

    • See also East and Southeast Asia

    Three-pillar pension systems, 155n, 157

    Thrift Savings Plan, U.S., 79

    Transparency

    • in Australia’s pension system, 264

    • in Indonesia’s pension system, 335

    • in public pensions system governance, 14

    • in Singapore’s pension system, 241–42, 248–49

    Turkey

    • elderly incomes in, 186

    • elderly poverty in, 184–85

    • public pension spending in, 34, 35

    U

    Ukraine’s pension system

    • labor force participation rates and, 40

    • public spending on, 34, 41

    • recent reforms in, 41

    United Kingdom

    • beliefs about responsibility for retirement security in, 122, 124–25

    • contributory requirements in, 76

    • demographic trends in, 4, 38, 39f

    • elderly incomes in, 186

    • funding position of private pensions in, 42–43

    • intergenerational financial flows in, 119

    • labor force participation rates in, 40

    • National Employment Savings Trust, 79

    • pension adjustments for women in, 107

    • pension system administrative costs, 166

    • public pension spending in, 41

    • recent pension reform program, 41

    • replacement rates in, 44

    • retirement age, 78, 190

    United States

    • demographic trends, 4

    • equity outcomes of pension reforms, 18–19

    • evolution of Social Security system, 140–41

    • funding position of private pensions in, 43

    • intergenerational equity in pension system, 144–46, 145f

    • life expectancy, 11n

    • net pension liabilities in, 142, 143f

    • pension system coverage, 283

    • persons with disability in, 209–10

    • retirement age, 78, 140–41

    • Thrift Savings Plan, 79

    V

    Valorization and indexation, 6b, 192–93

    Vertical equity, 8–10

    Vietnam’s pension system

    • adequacy, 285

    • benefit design, 278, 279b

    • equity issues in, 287

    • institutional capacity, 24

    • replacement rate, 284

    • structural characteristics of, 23, 278

    • See also East and Southeast Asia

    W

    Women

    • disparities in East and Southeast Asian pension systems, 287

    • divorced, 108

    • Indonesia’s pension reform provisions for, 342

    • inequities in Singapore’s pension system for, 246–47, 249

    • labor market participation, 5, 33, 89, 97, 108, 182

    • obstacles to pension contribution from, 5, 18, 105–6, 107, 184

    • pension contribution adjustment strategies for, 18, 107–8, 109b, 270

    • pension system reform issues for, 5, 101

    • socioeconomic trends in Europe for, 184

    • strategies for reducing elderly poverty among, 97

    • survivor benefits, 108–10

    • See also Gender differences

    World Bank, 156–57, 160

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