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Adequacy of Retirement Income after Pension Reforms in Central, Eastern, and Southern Europe : Eight Country Studies

Author

Listed:
  • Robert Holzmann
  • Ufuk Guven

Abstract

All of the former transition economies in Central, Eastern, and Southern Europe (CESE) inherited from the era of central planning traditional defined-benefit pension systems financed on a pay-as-you-go basis. Like many pay-as-you-go public pension systems elsewhere in the world, CESE pension systems were in need of reforms to address short-term fiscal imbalances and longer-term issues relating to population aging. Reforms were also needed to adjust benefit and contribution structures to meet the challenges of-as well as to take advantage of opportunities relating to the transition to a market economy, including the widespread adoption of multiplier designs with improved risk-sharing across funded and unfunded pillars. By 2006, most countries in Europe and Central Asia had introduced a voluntary private pension scheme. By 2008, 14 countries roughly half of all countries in the region had legislated mandatory private pension schemes, and all but one of those schemes (the one in Ukraine) had been introduced. These reforms shared a number of common objectives, in particular putting the systems on a sounder financial footing and better aligning them with the (very different) incentives of a market economy. This report is organized as follows. The first section discusses the motivation for reform across the eight countries included in the study against the backdrop of the regional (and global) trend toward multiplier pension arrangements. The second section summarizes the key provisions of the reformed systems in the eight countries within the World Bank's five-pillar framework for pension system design. The third section summarizes pension system performance against the two crucially important dimensions of adequacy and sustainability. The last section provides some policy recommendations for addressing gaps in reforms and taking advantage of further opportunities.

Suggested Citation

  • Robert Holzmann & Ufuk Guven, 2009. "Adequacy of Retirement Income after Pension Reforms in Central, Eastern, and Southern Europe : Eight Country Studies," World Bank Publications, The World Bank, number 2610, January.
  • Handle: RePEc:wbk:wbpubs:2610
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    References listed on IDEAS

    as
    1. Whitehouse, Edward, 1999. "The tax treatment of funded pensions," MPRA Paper 14173, University Library of Munich, Germany.
    2. AfDB AfDB, . "AfDB Group Annual Report 2005," Annual Report, African Development Bank, number 61 edited by Koua Louis Kouakou.
    3. Robert Holzmann & Landis MacKellar & Jana Repansek, 2009. "Pension Reform in Southeastern Europe : Linking to Labor and Financial Market Reforms," World Bank Publications, The World Bank, number 2587, January.
    4. Miroslav VerbiÄ & Boris Majcen & Renger Van Nieuwkoop, 2006. "Sustainability of the Slovenian Pension System: An Analysis with an Overlapping-Generations General Equilibrium Model," Eastern European Economics, Taylor & Francis Journals, vol. 44(4), pages 60-81, August.
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    Citations

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    Cited by:

    1. Filip Chybalski & Edyta Marcinkiewicz, 2016. "The Replacement Rate: An Imperfect Indicator of Pension Adequacy in Cross-Country Analyses," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 126(1), pages 99-117, March.
    2. Stefan Domonkos & Andras Simonovits, 2016. "Pensions in transition in EU11 countries between 1990 and 2015," IEHAS Discussion Papers 1615, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    3. Hinrichs, Karl, 2015. "In the wake of the crisis: Pension reforms in eight European countries," Working papers of the ZeS 01/2015, University of Bremen, Centre for Social Policy Research (ZeS).
    4. Boena CHOVANCOVÁ & Jaroslav HUDCOVSKÝ, 2016. "Return-risk profile of Slovak pension funds," REVISTA ADMINISTRATIE SI MANAGEMENT PUBLIC, Faculty of Administration and Public Management, Academy of Economic Studies, Bucharest, Romania, vol. 2016(27), pages 94-106, Decembre.
    5. Klemen, SIROK & Laura-Maria, DIACONESCU, 2014. "The Role Of Work And Labour Market Flexibility In Working Life Prolongation: Case Slovenia," Management Strategies Journal, Constantin Brancoveanu University, vol. 26(4), pages 611-620.
    6. Rudolf Sivák & Pavol Ochotnický & Andrea Čambalová, 2011. "Fiškálna udržateľnosť penzijných systémov
      [Fiscal Sustainability of Pension Systems]
      ," Politická ekonomie, University of Economics, Prague, vol. 2011(6), pages 723-742.
    7. repec:spr:soinre:v:138:y:2018:i:1:d:10.1007_s11205-017-1653-x is not listed on IDEAS

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