South Asia : Pension Schemes for the Formal Sector, Emerging Challenges and Opportunities for Reform
For centuries informal arrangements such as intra-family transfers have been the primary source of old-age income support in South Asia. That remains true even today. Current patterns suggest that only around 1 in 10 of South Asia's half a billion workers will enter old age with a pension relat...
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| Language: | English en_US |
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Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2005/01/6534626/south-asia-pension-schemes-formal-sector-emerging-challenges-opportunities-reform http://hdl.handle.net/10986/8424 |
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okr-10986-8424 |
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oai_dc |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English en_US |
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ACCRUAL RATES ADVERSE EFFECTS ANNUITIES ANNUITIES MARKETS ANNUITY ASSET MANAGEMENT AVERAGE WAGE BANK DEPOSITS BASE YEAR BENCHMARK BENEFICIARIES BONDS BUDGET CONSTRAINTS CAPITAL MARKETS CD CERTIFICATE OF DEPOSIT COMPENSATION PACKAGE CONSUMER PRICE INDEX CONTRIBUTION RATE CONTRIBUTION RATES CONTRIBUTORY PROGRAMS COVERAGE DEFINED BENEFIT PLANS DEFINED BENEFIT SCHEMES DEFINED CONTRIBUTION PLANS DEPENDENCY RATIO DISCOUNT RATE DISCOUNTED VALUE EXCHANGE RATES EXPECTED PRESENT VALUE FINANCIAL SECTOR FORMAL LABOR MARKET FORMAL SECTOR WORKERS FUNDED COMPONENT FUNDED SCHEMES GDP GOVERNMENT BONDS GROSS DOMESTIC PRODUCT GUARANTEED BENEFIT INADEQUATE SUPERVISION INCOME GROUPS INCOME SECURITY INCOME SUPPORT INFLATION INFLATION RISK INFORMAL SECTOR INSTITUTIONAL ARRANGEMENTS INSTITUTIONAL STRUCTURE INSURANCE COMPANY INVESTMENT GUIDELINES INVESTMENT PERFORMANCE INVESTMENT POLICIES INVESTMENT RETURNS JOINT ANNUITY LABOR FORCE LABOR MOBILITY LIFE EXPECTANCY LIFE INSURANCE LIFETIME EARNINGS LIQUIDITY MANAGEMENT STRUCTURES MANDATORY RETIREMENT MANDATORY SCHEMES MEDIUM-SIZE ENTERPRISES MOBILITY OF LABOR OCCUPATIONAL SCHEMES OCCUPATIONS OLD AGE BENEFITS PAY AS YOU GO PENSION FUND PENSION FUNDS PENSION LIABILITIES PENSION PLAN PENSION PLANS PENSION REFORM PENSION REFORMS PENSION REGULATION PENSION RIGHTS PENSION SCHEMES PENSION SYSTEM PENSION SYSTEMS PENSIONS PILLAR SYSTEM POLITICAL ECONOMY PORTFOLIO CHOICE PRESENT VALUE PRICE INDEXATION PRIMARY SOURCE PRIVATE FIRMS PRIVATE PENSION PRIVATE PENSION FUNDS PRIVATE SECTOR PRIVATE SECTOR DEVELOPMENT PRIVATE SECTOR WORKERS PRIVATE SECTORS PROVIDENT FUNDS PUBLIC DEBT PUBLIC SECTOR PUBLIC SECTOR EMPLOYEES REGULATORY FRAMEWORK REPLACEMENT RATE REPLACEMENT RATES RESERVES RETIREES RETIREMENT RETIREMENT AGE RETIREMENT INCOME RETIREMENT INCOME SYSTEMS RETIREMENT PLANS RETIREMENT PROGRAMS RETIREMENT SAVINGS SEASONAL WORKERS SECURITIES SERVANTS SOCIAL POLICY SOCIAL SAFETY NET SOUTH ASIAN STATE GOVERNMENT STATE-OWNED ENTERPRISES SUPERVISORY CAPACITY SUPERVISORY FRAMEWORK SUSTAINABILITY TAX REVENUES TAX TREATMENT UNFUNDED LIABILITIES VOLUNTARY PENSION SCHEMES WAGE COMPRESSION WAGE DIFFERENTIALS WAGE PREMIUM WAGES WORKER YOUNGER WORKERS |
| spellingShingle |
ACCRUAL RATES ADVERSE EFFECTS ANNUITIES ANNUITIES MARKETS ANNUITY ASSET MANAGEMENT AVERAGE WAGE BANK DEPOSITS BASE YEAR BENCHMARK BENEFICIARIES BONDS BUDGET CONSTRAINTS CAPITAL MARKETS CD CERTIFICATE OF DEPOSIT COMPENSATION PACKAGE CONSUMER PRICE INDEX CONTRIBUTION RATE CONTRIBUTION RATES CONTRIBUTORY PROGRAMS COVERAGE DEFINED BENEFIT PLANS DEFINED BENEFIT SCHEMES DEFINED CONTRIBUTION PLANS DEPENDENCY RATIO DISCOUNT RATE DISCOUNTED VALUE EXCHANGE RATES EXPECTED PRESENT VALUE FINANCIAL SECTOR FORMAL LABOR MARKET FORMAL SECTOR WORKERS FUNDED COMPONENT FUNDED SCHEMES GDP GOVERNMENT BONDS GROSS DOMESTIC PRODUCT GUARANTEED BENEFIT INADEQUATE SUPERVISION INCOME GROUPS INCOME SECURITY INCOME SUPPORT INFLATION INFLATION RISK INFORMAL SECTOR INSTITUTIONAL ARRANGEMENTS INSTITUTIONAL STRUCTURE INSURANCE COMPANY INVESTMENT GUIDELINES INVESTMENT PERFORMANCE INVESTMENT POLICIES INVESTMENT RETURNS JOINT ANNUITY LABOR FORCE LABOR MOBILITY LIFE EXPECTANCY LIFE INSURANCE LIFETIME EARNINGS LIQUIDITY MANAGEMENT STRUCTURES MANDATORY RETIREMENT MANDATORY SCHEMES MEDIUM-SIZE ENTERPRISES MOBILITY OF LABOR OCCUPATIONAL SCHEMES OCCUPATIONS OLD AGE BENEFITS PAY AS YOU GO PENSION FUND PENSION FUNDS PENSION LIABILITIES PENSION PLAN PENSION PLANS PENSION REFORM PENSION REFORMS PENSION REGULATION PENSION RIGHTS PENSION SCHEMES PENSION SYSTEM PENSION SYSTEMS PENSIONS PILLAR SYSTEM POLITICAL ECONOMY PORTFOLIO CHOICE PRESENT VALUE PRICE INDEXATION PRIMARY SOURCE PRIVATE FIRMS PRIVATE PENSION PRIVATE PENSION FUNDS PRIVATE SECTOR PRIVATE SECTOR DEVELOPMENT PRIVATE SECTOR WORKERS PRIVATE SECTORS PROVIDENT FUNDS PUBLIC DEBT PUBLIC SECTOR PUBLIC SECTOR EMPLOYEES REGULATORY FRAMEWORK REPLACEMENT RATE REPLACEMENT RATES RESERVES RETIREES RETIREMENT RETIREMENT AGE RETIREMENT INCOME RETIREMENT INCOME SYSTEMS RETIREMENT PLANS RETIREMENT PROGRAMS RETIREMENT SAVINGS SEASONAL WORKERS SECURITIES SERVANTS SOCIAL POLICY SOCIAL SAFETY NET SOUTH ASIAN STATE GOVERNMENT STATE-OWNED ENTERPRISES SUPERVISORY CAPACITY SUPERVISORY FRAMEWORK SUSTAINABILITY TAX REVENUES TAX TREATMENT UNFUNDED LIABILITIES VOLUNTARY PENSION SCHEMES WAGE COMPRESSION WAGE DIFFERENTIALS WAGE PREMIUM WAGES WORKER YOUNGER WORKERS World Bank South Asia : Pension Schemes for the Formal Sector, Emerging Challenges and Opportunities for Reform |
| geographic_facet |
South Asia |
| description |
For centuries informal arrangements such as intra-family transfers have been the primary source of old-age income support in South Asia. That remains true even today. Current patterns suggest that only around 1 in 10 of South Asia's half a billion workers will enter old age with a pension related to pre-retirement earnings. Pension schemes in South Asia cover small shares of the population, concentrated in the formal sector (table 1). Retirement income plans for the formal sector have for the most part performed poorly-both for their participants and for the economy. But while several countries in the region are exploring or already introducing reforms of civil service pension schemes, the performance of retirement income schemes available to the rest of the formal sector has received far less attention. The policy framework for most of these programs has barely changed since they were created, in some cases nearly half a century ago. Moreover, these schemes involve even more complex political economy issues, because governments have often used their funded (or partially funded) structures to address fiscal gaps. Now is a critical time to consider more broadly the problems affecting retirement income schemes for the formal sector. The two defined benefit programs in India and Pakistan, for example, have not yet matured. As time passes, future pension promises will become more deeply entrenched, making reform even more challenging. And as funded plans continue to grow, there is a risk of further misallocation of savings. Perhaps more important, there are encouraging signs of economic growth in the region and thus good possibilities for expanding the coverage of these programs. But even as a growing number of younger workers join the formal labor market and thus formal retirement schemes, urbanization is likely to weaken traditional informal arrangements for the elderly, including intra-family transfers. Strengthening retirement income schemes for the formal sector will help the region better prepare for the demographic change occurring over the next half century. This report seeks to provide a framework for improving the performance of pension schemes for the formal sector. After an introduction, Chapter 2 examines civil service pension schemes, chapter 3 focuses on mandatory private sector schemes, chapter 3 discusses the expansion of voluntary retirement savings arrangements, and chapter 5 is directed toward improving the business environment for retirement savings schemes. Chapter 6 presents conclusions. |
| format |
Economic & Sector Work :: Other Social Protection Study |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
South Asia : Pension Schemes for the Formal Sector, Emerging Challenges and Opportunities for Reform |
| title_short |
South Asia : Pension Schemes for the Formal Sector, Emerging Challenges and Opportunities for Reform |
| title_full |
South Asia : Pension Schemes for the Formal Sector, Emerging Challenges and Opportunities for Reform |
| title_fullStr |
South Asia : Pension Schemes for the Formal Sector, Emerging Challenges and Opportunities for Reform |
| title_full_unstemmed |
South Asia : Pension Schemes for the Formal Sector, Emerging Challenges and Opportunities for Reform |
| title_sort |
south asia : pension schemes for the formal sector, emerging challenges and opportunities for reform |
| publisher |
Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2005/01/6534626/south-asia-pension-schemes-formal-sector-emerging-challenges-opportunities-reform http://hdl.handle.net/10986/8424 |
| _version_ |
1764405378994405376 |
| spelling |
okr-10986-84242021-04-23T14:02:39Z South Asia : Pension Schemes for the Formal Sector, Emerging Challenges and Opportunities for Reform World Bank ACCRUAL RATES ADVERSE EFFECTS ANNUITIES ANNUITIES MARKETS ANNUITY ASSET MANAGEMENT AVERAGE WAGE BANK DEPOSITS BASE YEAR BENCHMARK BENEFICIARIES BONDS BUDGET CONSTRAINTS CAPITAL MARKETS CD CERTIFICATE OF DEPOSIT COMPENSATION PACKAGE CONSUMER PRICE INDEX CONTRIBUTION RATE CONTRIBUTION RATES CONTRIBUTORY PROGRAMS COVERAGE DEFINED BENEFIT PLANS DEFINED BENEFIT SCHEMES DEFINED CONTRIBUTION PLANS DEPENDENCY RATIO DISCOUNT RATE DISCOUNTED VALUE EXCHANGE RATES EXPECTED PRESENT VALUE FINANCIAL SECTOR FORMAL LABOR MARKET FORMAL SECTOR WORKERS FUNDED COMPONENT FUNDED SCHEMES GDP GOVERNMENT BONDS GROSS DOMESTIC PRODUCT GUARANTEED BENEFIT INADEQUATE SUPERVISION INCOME GROUPS INCOME SECURITY INCOME SUPPORT INFLATION INFLATION RISK INFORMAL SECTOR INSTITUTIONAL ARRANGEMENTS INSTITUTIONAL STRUCTURE INSURANCE COMPANY INVESTMENT GUIDELINES INVESTMENT PERFORMANCE INVESTMENT POLICIES INVESTMENT RETURNS JOINT ANNUITY LABOR FORCE LABOR MOBILITY LIFE EXPECTANCY LIFE INSURANCE LIFETIME EARNINGS LIQUIDITY MANAGEMENT STRUCTURES MANDATORY RETIREMENT MANDATORY SCHEMES MEDIUM-SIZE ENTERPRISES MOBILITY OF LABOR OCCUPATIONAL SCHEMES OCCUPATIONS OLD AGE BENEFITS PAY AS YOU GO PENSION FUND PENSION FUNDS PENSION LIABILITIES PENSION PLAN PENSION PLANS PENSION REFORM PENSION REFORMS PENSION REGULATION PENSION RIGHTS PENSION SCHEMES PENSION SYSTEM PENSION SYSTEMS PENSIONS PILLAR SYSTEM POLITICAL ECONOMY PORTFOLIO CHOICE PRESENT VALUE PRICE INDEXATION PRIMARY SOURCE PRIVATE FIRMS PRIVATE PENSION PRIVATE PENSION FUNDS PRIVATE SECTOR PRIVATE SECTOR DEVELOPMENT PRIVATE SECTOR WORKERS PRIVATE SECTORS PROVIDENT FUNDS PUBLIC DEBT PUBLIC SECTOR PUBLIC SECTOR EMPLOYEES REGULATORY FRAMEWORK REPLACEMENT RATE REPLACEMENT RATES RESERVES RETIREES RETIREMENT RETIREMENT AGE RETIREMENT INCOME RETIREMENT INCOME SYSTEMS RETIREMENT PLANS RETIREMENT PROGRAMS RETIREMENT SAVINGS SEASONAL WORKERS SECURITIES SERVANTS SOCIAL POLICY SOCIAL SAFETY NET SOUTH ASIAN STATE GOVERNMENT STATE-OWNED ENTERPRISES SUPERVISORY CAPACITY SUPERVISORY FRAMEWORK SUSTAINABILITY TAX REVENUES TAX TREATMENT UNFUNDED LIABILITIES VOLUNTARY PENSION SCHEMES WAGE COMPRESSION WAGE DIFFERENTIALS WAGE PREMIUM WAGES WORKER YOUNGER WORKERS For centuries informal arrangements such as intra-family transfers have been the primary source of old-age income support in South Asia. That remains true even today. Current patterns suggest that only around 1 in 10 of South Asia's half a billion workers will enter old age with a pension related to pre-retirement earnings. Pension schemes in South Asia cover small shares of the population, concentrated in the formal sector (table 1). Retirement income plans for the formal sector have for the most part performed poorly-both for their participants and for the economy. But while several countries in the region are exploring or already introducing reforms of civil service pension schemes, the performance of retirement income schemes available to the rest of the formal sector has received far less attention. The policy framework for most of these programs has barely changed since they were created, in some cases nearly half a century ago. Moreover, these schemes involve even more complex political economy issues, because governments have often used their funded (or partially funded) structures to address fiscal gaps. Now is a critical time to consider more broadly the problems affecting retirement income schemes for the formal sector. The two defined benefit programs in India and Pakistan, for example, have not yet matured. As time passes, future pension promises will become more deeply entrenched, making reform even more challenging. And as funded plans continue to grow, there is a risk of further misallocation of savings. Perhaps more important, there are encouraging signs of economic growth in the region and thus good possibilities for expanding the coverage of these programs. But even as a growing number of younger workers join the formal labor market and thus formal retirement schemes, urbanization is likely to weaken traditional informal arrangements for the elderly, including intra-family transfers. Strengthening retirement income schemes for the formal sector will help the region better prepare for the demographic change occurring over the next half century. This report seeks to provide a framework for improving the performance of pension schemes for the formal sector. After an introduction, Chapter 2 examines civil service pension schemes, chapter 3 focuses on mandatory private sector schemes, chapter 3 discusses the expansion of voluntary retirement savings arrangements, and chapter 5 is directed toward improving the business environment for retirement savings schemes. Chapter 6 presents conclusions. 2012-06-19T15:46:32Z 2012-06-19T15:46:32Z 2005-01 http://documents.worldbank.org/curated/en/2005/01/6534626/south-asia-pension-schemes-formal-sector-emerging-challenges-opportunities-reform 955-8908-18-5 http://hdl.handle.net/10986/8424 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Washington, DC Economic & Sector Work :: Other Social Protection Study Economic & Sector Work South Asia |