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Coverage: The Scope of Protection in Retirement Income Systems

Autor: Banco Mundial
Año: 2005
Resumen: The coverage of old-age protection systems is a central concern in developing countries. While most countries mandate that workers make contributions to a retirement-savings plan, fewer than ten per cent comply in South Asia and Sub-Saharan Africa, as compared to higher-income OECD countries which cover 80 per cent or more of their workforce. Economic development is the major determinant of coverage protection for retirement systems, with the level of income per capita as an excellent predictor of coverage rates. The note concludes that : a) coverage rates track income levels closely and evasion is driven by the high cost of joining the formal sector; b) pension scheme design can exacerbate the evasion problem; c) a poorly designed and managed scheme should be reformed prior to attempts to expand its coverage; d) extending financial solvency of a pay-as-you-go scheme is not a good rationale for expanding coverage; e) a safety net can help cover the inevitable gaps in a contributory scheme; f) defined contribution schemes tend to provide better incentives for coverage; g) creative approaches to expanding coverage include direct matching contributions for low income workers and finding ways to reduce transaction costs by harnessing existing groups.

Fuente: Banco Mundial
Clasificación: Seguridad Social y Sistemas de Pensiones
Tipo de Publicación: Informes
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Guarantees - Counting the Cost of Guaranteeing Defined Contribution Pensions

Autor: Banco Mundial
Año: 2005
Resumen: Different types of pension involve different kinds of uncertainty. For example, public sector pension schemes involve a 'policy risk', that the scheme might be reformed in the future so that benefits turn out differently than expected. Private pension schemes are less subject to this policy risk, because governments are unlikely to confiscate private property. But defined-contribution pensions do involve capital-market risk during the accumulation phase, when contributions and investment returns build up in the fund. The risk is that the pension fund's performance is insufficient to give an individual member an adequate retirement income. This note reviews the different types of guarantees, suggesting guarantees of the returns from funded pensions can gain support for reform; but poorly designed guarantees can undermine it, and create large liabilities. The cost of guarantees should be made as transparent as possible, while option-pricing models can be used to illustrate the cost of guarantees, to inform the decision to offer guarantees, the type of guarantee, and how large it should be. Transparent financing of guarantees is best served by forcing funds to put aside their own assets; this also provides better incentives for fund managers.

Fuente: Banco Mundial
Clasificación: Ahorro Previsional
Tipo de Publicación: Informes
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Supervision: Building Public Confidence in Mandatory Funded Pensions

Autor: Whitehouse, Edward
Año: 2005
Resumen: The regulation and supervision of individual pension accounts has been a neglected issue. In contrast, much has been written on financing the transition to funded pensions and the design of benefits. Yet effective regulation and efficient supervision are crucial to the success of pension reform. This note explores six issues in the design of a supervisory regime. It makes some comparisons between the performances of agencies in different countries and looks at four important areas of supervision : institutional and financial controls, and membership and benefits procedures. Some of the conclusions presented in this note are : professional expertise, transparency and perceived independence of supervisory agencies is essential to the success of pension reform; in countries where existing regulation is weak or ineffective, a new, separate agency is probably best placed (but not certain) to avoid repeating past failures; administrative independence is similarly preferable; salaries must be competitive with the private sector (and remain so) to recruit qualified personnel from public and private sectors and to limit corruption risk; separation of regulation and supervision can help limit the risk of regulatory capture.

Fuente: Banco Mundial
Clasificación: Ahorro Previsional
Tipo de Publicación: Informes
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Switching : The Role of choice in the Transition to a Funded Pension System

Autor: Banco Mundial
Año: 2005
Resumen: The transition from a wholly public, pay-as-you go pension system to one where pensions are also provided by individual, privately managed pension accounts does not directly affect those receiving pensions at the time of the reform. Nevertheless, it could affect all current and future workers. A critical policy choice is whether these workers should be allowed, encouraged or forced to divert their pension contributions to the new private element. The note continues with an in depth analysis of the spectrum of switching strategies; and further, describes the objectives of a successful reform. First, the new scheme should aim to provide a reasonable level of retirement income. Secondly, the benefit level must be consistent with long-run fiscal policy. The diversion of payroll taxes from financing current pay-as-you-go pensions into the funded scheme will increase deficits at first, so short-term fiscal constraints are also important. Thirdly, pension reform has microeconomic objectives: improve the workings of capital and labor markets. Finally, the reform must be politically palatable. Some of the note conclusions are : older workers are best excluded from reforms, because there is little time to build substantial funds in the new private scheme; a mandatory cut-off age is arbitrary and leads to political or legal challenges; and Governments can and should manage the switching process, by altering incentives and ensuring people make informed choices.

Fuente: Banco Mundial
Clasificación: Reformas de Pensiones
Tipo de Publicación: Informes
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Notional Accounts : Notional Defined Contribution Plans as a Pension Reform Strategy

Autor: Banco Mundial
Año: 2005
Resumen: Notional accounts are designed to mimic a defined contribution plan, where the pension depends on contributions and investment returns. (For this reason, they are sometimes called notional, defined-contribution schemes). Pension contributions are tracked in accounts which earn a rate of return. However, in notional accounts, the return that contributions earn is a notional one, set by the government, not the product of investment returns in the markets.

Fuente: Banco Mundial
Clasificación: Seguridad Social y Sistemas de Pensiones
Tipo de Publicación: Informes
Idioma:

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