The Inverting Pyramid : Pension Systems Facing Demographic Challenges in Europe and Central Asia
Pension systems in Europe and Central Asia are facing unprecedented demographic change. While many of the countries in the region have undertaken reforms when the economy faces difficult times, these reforms are frequently reversed when the economy improves. The demographic challenges that the reg...
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Washington, DC: World Bank
2014
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| Online Access: | http://hdl.handle.net/10986/17049 |
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okr-10986-170492021-04-23T14:03:34Z The Inverting Pyramid : Pension Systems Facing Demographic Challenges in Europe and Central Asia Schwarz, Anita M. Arias, Omar S. Zviniene, Asta Rudolph, Heinz P. Eckardt, Sebastian Koettl, Johannes Immervoll, Herwig Abels, Miglena aging contribution rate contribution rate second pillars demographic change fiscal sustainability lump of labor fallacy migration notional defined contribution older workers pay as you go pensions retirement savings second pillars social insurance social pension taxation training work incentives working longer Pension systems in Europe and Central Asia are facing unprecedented demographic change. While many of the countries in the region have undertaken reforms when the economy faces difficult times, these reforms are frequently reversed when the economy improves. The demographic challenges that the region faces require a sustained effort toward changing the pension system toward something which provides adequate and sustainable benefits. The book documents the increased generosity of pension systems in Europe from their initial inception, noting that the current expectations of the public are based on the most recent round of generosity. The book seeks to show a nontechnical audience that such generosity is neither based on customary practice nor affordable in the future. The increased generosity in the past was only possible because the demographic pyramid was expanding, but as it inverts with fewer young people and more elderly, that generosity will no longer be affordable. Returning to the pension system of the 1970’s will go a long way toward providing adequate and sustainable benefits in the future. Moving to a more sustainable system will require reforms to labor markets, improvements in savings mechanisms, and may require additional public resources. The extent to which a country can undertake reforms in labor markets, savings, and public finances can influence the extent to which its pension system will have to change, with different solutions possible for different countries. But in all cases, the changes that need to be made have to be widely discussed and publicly accepted to prevent reversals. The book hopes to stimulate widespread public discussion of the issue to help countries make sustainable choices with gradual implementation, before they face such daunting challenges that they have to undertake sudden, harsh measures. 2014-02-12T21:53:31Z 2014-02-12T21:53:31Z 2014-02-12 978-0-8213-9908-8 10.1596/978-0-8213-9908-8 http://hdl.handle.net/10986/17049 en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo Washington, DC: World Bank Publications & Research :: Publication Europe and Central Asia East Asia Europe and Central Asia Eastern Europe |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
en_US |
| topic |
aging contribution rate contribution rate second pillars demographic change fiscal sustainability lump of labor fallacy migration notional defined contribution older workers pay as you go pensions retirement savings second pillars social insurance social pension taxation training work incentives working longer |
| spellingShingle |
aging contribution rate contribution rate second pillars demographic change fiscal sustainability lump of labor fallacy migration notional defined contribution older workers pay as you go pensions retirement savings second pillars social insurance social pension taxation training work incentives working longer Schwarz, Anita M. Arias, Omar S. Zviniene, Asta Rudolph, Heinz P. Eckardt, Sebastian Koettl, Johannes Immervoll, Herwig Abels, Miglena The Inverting Pyramid : Pension Systems Facing Demographic Challenges in Europe and Central Asia |
| geographic_facet |
Europe and Central Asia East Asia Europe and Central Asia Eastern Europe |
| description |
Pension systems in Europe and Central Asia are facing unprecedented demographic change. While many of the countries in the region have undertaken reforms when the economy faces difficult times, these reforms are frequently reversed when the economy improves. The demographic challenges that the region faces require a sustained effort toward changing the pension system toward something which provides adequate and sustainable benefits.
The book documents the increased generosity of pension systems in Europe from their initial inception, noting that the current expectations of the public are based on the most recent round of generosity. The book seeks to show a nontechnical audience that such generosity is neither based on customary practice nor affordable in the future. The increased generosity in the past was only possible because the demographic pyramid was expanding, but as it inverts with fewer young people and more elderly, that generosity will no longer be affordable. Returning to the pension system of the 1970’s will go a long way toward providing adequate and sustainable benefits in the future.
Moving to a more sustainable system will require reforms to labor markets, improvements in savings mechanisms, and may require additional public resources. The extent to which a country can undertake reforms in labor markets, savings, and public finances can influence the extent to which its pension system will have to change, with different solutions possible for different countries. But in all cases, the changes that need to be made have to be widely discussed and publicly accepted to prevent reversals.
The book hopes to stimulate widespread public discussion of the issue to help countries make sustainable choices with gradual implementation, before they face such daunting challenges that they have to undertake sudden, harsh measures. |
| format |
Publications & Research :: Publication |
| author |
Schwarz, Anita M. Arias, Omar S. Zviniene, Asta Rudolph, Heinz P. Eckardt, Sebastian Koettl, Johannes Immervoll, Herwig Abels, Miglena |
| author_facet |
Schwarz, Anita M. Arias, Omar S. Zviniene, Asta Rudolph, Heinz P. Eckardt, Sebastian Koettl, Johannes Immervoll, Herwig Abels, Miglena |
| author_sort |
Schwarz, Anita M. |
| title |
The Inverting Pyramid : Pension Systems Facing Demographic Challenges in Europe and Central Asia |
| title_short |
The Inverting Pyramid : Pension Systems Facing Demographic Challenges in Europe and Central Asia |
| title_full |
The Inverting Pyramid : Pension Systems Facing Demographic Challenges in Europe and Central Asia |
| title_fullStr |
The Inverting Pyramid : Pension Systems Facing Demographic Challenges in Europe and Central Asia |
| title_full_unstemmed |
The Inverting Pyramid : Pension Systems Facing Demographic Challenges in Europe and Central Asia |
| title_sort |
inverting pyramid : pension systems facing demographic challenges in europe and central asia |
| publisher |
Washington, DC: World Bank |
| publishDate |
2014 |
| url |
http://hdl.handle.net/10986/17049 |
| _version_ |
1764435578027245568 |