Supervision : Building Public Confidence in Mandatory Funded Pensions
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 supervisi...
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| Format: | Brief |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2005/01/6265727/supervision-building-public-confidence-mandatory-funded-pensions http://hdl.handle.net/10986/11240 |
| Summary: | 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. |
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