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