Kyrgyz Republic Public Expenditure Review Policy Notes : Pensions
Today, the Kyrgyz pension system plays a major role in poverty alleviation of the elderly but this role is diminishing fast due to low coverage of working age population. The system currently provides pensions to more than 90 percent of the populat...
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| Format: | Public Expenditure Review |
| Language: | English en_US |
| Published: |
Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/05/19717536/kyrgyz-republic-public-expenditure-review-policy-notes-pensions http://hdl.handle.net/10986/19304 |
| Summary: | Today, the Kyrgyz pension system plays a
major role in poverty alleviation of the elderly but this
role is diminishing fast due to low coverage of working age
population. The system currently provides pensions to more
than 90 percent of the population over age 65 thus being a
significant buffer against poverty. Over time, though, the
poverty reduction effect of the pension system is expected
to weaken substantially as the current low coverage rates
among the working age population translate into much lower
coverage rates of about only 60 percent for the future old
age population. As a result, poverty rates among the
old-age population will grow and government spending on
social pensions will increase dramatically. The structure of
this chapter is as follows. The next section provides an
overview of the current pension system and the main issues
facing it. Section three presents the results of the
financial projections for the current system assuming a
no-reform scenario and the implications of doing nothing on
the finances of the Social Fund, the cost to the government
and the expected benefits (baseline projections). Section
four considers several broad reform options and their impact
with respect to the financial sustainability and
affordability of the system as well as adequacy of benefits.
Section five outlines the issues remaining beyond the scope
of this study which require further analysis. Annex one
summarizes the main parameters of the current pension system
and annexes two provides a brief description of the main
assumptions used in the projections and the projection
methodology. The diagnosis of the current system and the
evaluation of the reform options presented in this chapter
are based on the simulations produced with the World Bank
Pension Reform Options Simulation Toolkit (PROST) model. |
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