Pensions

The most dramatic ageing worldwide is projected to take place in low and middle-income countries. Traditional family-based care for the elderly has broken down in many developing countries without adequate formal mechanisms to take its place. For the elderly, inadequate transfers from either formal pension systems or from informal family and community transfers can severely reduce their ability to cope with illness or poor nutrition.

Old-age social pensions provide an alternative source of income for elderly adults who are not covered by contributory schemes. Social pensions cover close to 35 percent of the population ages 60 years and older in OECD countries and in the Europe and Central Asia, East Asia and Pacific, Latin America and the Caribbean, and South Asia regions.

Old-age social pensions are introduced on the basis of an economy’s needs and capacity, in particular to alleviate poverty, establish the main component of a pension system, or address a coverage gap in an existing pension system. The elderly in the poorest quintile have benefited the most from old-age social pensions, no matter the program design.

Last Updated: Mar 28, 2019

The World Bank Group helps governments analyze, design and reform pensions and social insurance policies. These are aimed to make pensions systems improve their coverage of those in need, to build fiscal sustainability of the programs, and to provide adequate support to prevent vulnerable groups from sinking into poverty.

Globally, more than two-thirds of government spending on social servicies is on old age, disability and survivor pensions.  These large and growing programs face several challenges in the context of population aging:

• Coverage – only one in three workers contributes to a pension scheme globally and the figure falls to one in ten in low income countries
• Sustainability – most public pension schemes are not viable financially and cannot therefore keep their promises to younger cohorts that will retire in the future
• Adequacy – contributory pensions almost never reach the poor so that old age poverty can only be addressed by social assistance – this is the intersection of safety nets and social insurance
• Efficiency – the costs in many private pension systems remain stubbornly high despite well-developed solutions to cut costs across the value chain and pension fund assets are not always invested in productive, long-term assets
• Security – where there are assets to invest these need to be securely governed, invested and supervised and individuals need to have unique IDs so that their contributions and claims can be tracked and paid, to ensure pension promises can be paid out over the decades

In addition to these direct challenges, pension schemes influence the economy through their indirect impact on savings as well as labor and capital markets.  Ultimately, national pension systems affect the entire population.

Last Updated: Mar 28, 2019

The World Bank has 42 active projects across countries spread over all regions. These engagements include lending components in Development Policy Loans (DPLs) in support of major reforms, investment loans to improve administration and a wide range of non-lending technical assistance (NLTA) that relies on several analytical tools such as the Pension Reform Options Simulation Toolkit (PROST) and APEX, a Stata-based micro-simulation model.  The number of reimbursable assistance activities has been growing recently, especially in the Middle East and North Africa Region.  

Last Updated: Mar 28, 2019

The two-week Pensions Core Course builds on the latest developments to provide participants with an in-depth understanding of the conceptual and practical issues involved in the development of pension and social security programs and linkages to social protection and labor systems. A variety of learning methods will be used, including presentations, round table discussions, simulation games, hands-on computer assisted exercises and group work.

The Pensions Core Course was held concurrently with a similar Core Courses on Social Safety Nets and Delivery and Jobs, Labor and Migration.

Day 1 – Monday, Oct 28

1. Welcome and Framing Social Protection and Jobs Agenda 

Michal Rutkowski, Margaret Grosh [Presentation]

2. Protecting All: Risk Sharing for a Diverse and Diversifying World of Work 

Ugo Gentilini [Presentation], Gustavo Demarco [Presentation], Michael Weber [Presentation], Truman Packard [Presentation] Moderator: Michal Rutkowski

3. Political Economy Factors in Social Protection Reform and Implementation 

Moderator: Margaret Grosh

4. Hot Topics in Social Protection Implementation 
ID and Social Registries: Tina George [Presentation]
G2P Payments: Robert Palacios [Presentation]
Data Protections: David Satola [Presentation]
Human Centered Design: John Blomquist [Presentation]
Using Behavioral Economics to Boost Impacts: Laura Rawlings [Presentation]
Moderator: Margaret Grosh

Day 2 – Tuesday, Oct 29

1. Pensions systems: Old Challenges and the Changing Nature of Work
Gustavo Demarco [Presentation]

2. Contributory Pension and Social Security Systems Design 
Edward Whitehouse and Robert Palacios [Presentation]

3. Paying for Pensions: Challenges and benefits of Payroll tax financing, pre-funding, and Funded Defined-Contribution Schemes 
Edward Whitehouse and Anita Schwarz [Presentation]

Day 3 – Wednesday, Oct. 30

1. Pension Reversals in Central and Eastern Europe 
Agnieszka Chłoń-Domińczak [Presentation]

2. Supplementary Occupational and Individual Pension Schemes 
Richard Hinz and Mark Davis [Presentation]

3. Government Stewardship of Elder care – Home Care, Institutional Care and Community Care 
Elena Glinskaya [Presentation]

Day 4 – Thursday, Oct. 31

1. Civil Service Pension Systems 
Mark Dorfman [Presentation]

2. Civil Service Pension Reform: The Experience of the US Thrift Savings Plan
Renee Wilder Guerin [Presentation]

3. Political Economy of Pension Reforms 
Kent Weaver [Presentation]
Discussant: Agnieszka Chlon-Dominczak

Day 5 – Friday, Nov. 1

1. Pension regulation and Supervision 
Richard Hinz and Fiona Stewart [Presentation]

2. Framework for Pension Investment Management 
Gabriel Petre [Presentation]

3. Maximizing Returns & Diversifying risk in Countries with Small, Thin or Poorly Developed Capital Markets
Gabriel Petre and Ekaterina Gratcheva [Presentation]

Day 6 – Monday, Nov 4

1. PROST Intro, Objectives, Inputs, Outputs, Interpreting the Results 
Miglena Abels, Mitchell Weiner, Montserrat Pallares, Sergiy Biletskyy and Marola Castillo Quinto [Presentation] [DOC]

2. PROST (Cont.) 
Miglena Abels, Mitchell Weiner, Montserrat Pallares, Sergiy Biletskyy and Marola Castillo Quinto [Presentation]

Day 7 – Tuesday, Nov 5

1. Pension Savings and Micro-Pensions Innovations in South Asia and Sub-Saharan Africa 
Melis Guven and Ernesto Brodersohn [PPT1] [PPT2]

2. Building and Strengthening Identification Systems for Social Insurance 
Robert Palacios [Presentation]

3. Data and Payment Systems - Lessons from India, Uganda, Kenya and Mexico 
Rodrigo Assumpcao [Presentation], Oleksiy Sluchynsky, Robert Palacios and Ernesto Brodersohn [Presentation]

Day 8 – Wednesday, Nov 6

1. Pensions in Sub-Saharan Africa 
Anita Schwarz and Melis Guven [Presentation]

2. Payout Options for Multipillar Pension Schemes 
Mitchell Weiner [Presentation], Gonzalo Reyes and Oleksiy Sluchynsky [Presentation]

3. Social Protection Policy and Program Analysis - Using Household Survey Data to assess Welfare, Poverty and Program efficiency and effectiveness 
 Claudia Rodriguez, [Presentation] Oleksiy Ivaschenko [Presentation]

Day 9 – Thursday, Nov 7

1. Case Study of Pensions and Elderly Assistance: Mexico Using Micro Data to Assess Developmental Impact
Clemente Avila Para [Presentation]

2. Excellence in Social Security Administration 
Oleksiy Sluchynsky [Presentation], Raul Ruggia-Frick [Presentation]

3. Excellence in Social Security Administration (cont'd) - Pension Data and Standards of Personal Data Protection  
David Satola [Presentation], Rodrigo Assumpcao [Presentation]

Day 10 – Friday, Nov 8

1. Insights into Fiscal Challenges and Outcomes: Case Study of The Illinois State Pension System 
Mark Dorfman [Presentation] [DOC]