Pension Funds with Automatic Enrollment Schemes : Lessons for Emerging Economies
Since the introduction of the KiwiSaver scheme in New Zealand in 2006, several countries have implemented, or are in the process of implementing, voluntary funded pension systems with automatic enrollment features. Since most of the literature has...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/368081549376313709/Pension-Funds-with-Automatic-Enrollment-Schemes-Lessons-for-Emerging-Economies http://hdl.handle.net/10986/31230 |
| Summary: | Since the introduction of the KiwiSaver
scheme in New Zealand in 2006, several countries have
implemented, or are in the process of implementing,
voluntary funded pension systems with automatic enrollment
features. Since most of the literature has focused on
countries with the common law tradition, including the
United Kingdom and the United States, this note analyzes
cases of countries with the civil code tradition, including
Turkey, Poland, the Russian Federation, Chile, Brazil, and
the Province of Quebec in Canada. This sample includes
mostly emerging economies, with reforms at different stages,
from those that have already been completed to those that
are about to start discussions in their parliaments.
Although they are not a substitute for necessary parametric
reforms, automatic enrollment schemes offer the possibility
of improvements in future retirement income for a
significant part of the labor force. This note stresses that
the paternalistic approach of automatic enrollment schemes
imposes a great degree of responsibility on governments and
requires careful consideration of the design of the system,
including the industrial organization of the pension fund
industry and default investment strategies. Sufficient time
and resources for preparing communication and educational
campaigns has played a key role in achieving high rates of participation. |
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