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Financing the transition to multipillar

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  • Holzmann, Robert

Abstract

This report focuses primarily on the mechanics of financing the transition from an unfunded pension scheme with equates with hidden public debt to a funded scheme which makes this debt explicit, and on the financial stocks and flows involved. Only if the problem is treated in a consistent stock/flow concept can the true costs or benefits of transition, and its economic and distributive implications be fully assessed. To this end, the structure of this report is as follows: after the introductory section, section 2 elaborates on the appropriate definition of the scope of the obligations that become explicit, the way these are measured, and how they change under reform. Section 3 presents the main strategies for reducing the debt to be made explicit. Section 4 highlights the changes in the composition of total (i.e., implicit and explicit) debt and the related fiscal requirements during the transition under alternative reforms. Section 5 presents the options to finance the transition through debt or budgetary financing.

Suggested Citation

  • Holzmann, Robert, 1998. "Financing the transition to multipillar," Social Protection Discussion Papers and Notes 20052, The World Bank.
    • Handle: RePEc:wbk:hdnspu:20052
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    1. Palacios, Robert & Whitehouse, Edward, 1998. "The role of choice in the transition to a funded pension system," Social Protection Discussion Papers and Notes 20109, The World Bank.
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    Cited by:

    1. World Bank, 2003. "The Pension System in Iran : Challenges and Opportunities, Volume 1. Main Report," World Bank Publications - Reports 14645, The World Bank Group.
    2. Robert Holzmann & Robert Palacios & Asta Zviniene, 2001. "On the Economics and Scope of Implicit Pension Debt: An International Perspective," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 28(1), pages 97-129, March.
    3. David Robalino, 2005. "Pensions in the Middle East and North Africa: Time for Change," World Bank Publications - Books, The World Bank Group, number 7427, December.
    4. Mr. Jorge Roldos, 2007. "Pension Reform and Macroeconomic Stability in Latin America," IMF Working Papers 2007/108, International Monetary Fund.
    5. World Bank, 2005. "Russia : Fiscal Costs of Structural Reforms," World Bank Publications - Reports 8540, The World Bank Group.
    6. Gora, Marek & Rutkowski, Michal, 1998. "The quest for pension reform : Poland's security through diversity," Social Protection Discussion Papers and Notes 20111, The World Bank.
    7. Holzmann, Robert & Jousten, Alain, 2010. "Addressing the Legacy Costs in an NDC Reform: Conceptualization, Measurement, Financing," IZA Discussion Papers 5296, Institute of Labor Economics (IZA).
    8. Yueqiang Zhao & Manying Bai & Yali Liu & Junzhang Hao, 2017. "Quantitative Analyses of Transition Pension Liabilities and Solvency Sustainability in China," Sustainability, MDPI, vol. 9(12), pages 1-16, December.
    9. de la Torre, Augusto & Gozzi, Juan Carlos & Schmukler, Sergio L., 2006. "Financial development in Latin America : big emerging issues, limited policy answers," Policy Research Working Paper Series 3963, The World Bank.
    10. Sergio Cesaratto, 2008. "The Macroeconomics of the Pension Fund Reform and the case of the TFR reform in Italy," Department of Economics University of Siena 549, Department of Economics, University of Siena.
    11. Predrag Bejakovic & Zeljko Mrnjavac, 2020. "Fully Funded Pension System In Six Non Eu Balkan Countries," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 29(1), pages 101-121, june.
    12. Carlos Vidal-Meliá & Inmaculada Domínguez-Fabian, 2005. "The Spanish Pension System: Issues Of Introducing Notional Defined Contribution Accounts," Public Economics 0504006, University Library of Munich, Germany.
    13. Sergio Cesaratto, 2011. "The macroeconomics of pension reform: The case of severance pay reform in Italy," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 8(1), pages 69-89.

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