pension systems in asia pacific main issues and diagnosis
Download
Skip this Video
Download Presentation
Pension Systems in Asia-Pacific: Main Issues and Diagnosis

Loading in 2 Seconds...

play fullscreen
1 / 22

Pension Systems in Asia-Pacific: Main Issues and Diagnosis - PowerPoint PPT Presentation


  • 341 Views
  • Uploaded on

Pension Systems in Asia-Pacific: Main Issues and Diagnosis. Presentation by Michiel Van der Auwera 16 October 2007. Overview. Socio-economic challenges Review of existing pension situation in Asia Way forward identifying need for reform contribution of multilateral development banks.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Pension Systems in Asia-Pacific: Main Issues and Diagnosis' - Jeffrey


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
pension systems in asia pacific main issues and diagnosis

Pension Systems in Asia-Pacific: Main Issues and Diagnosis

Presentation by

Michiel Van der Auwera

16 October 2007

overview
Overview
  • Socio-economic challenges
  • Review of existing pension situation in Asia
  • Way forward
    • identifying need for reform
    • contribution of multilateral development banks
i socio economic challenges
I . Socio-economic challenges
  • Ageing population
  • Declining family support for elderly people
  • Globalization
ageing population
Ageing population
  • Asian population grew from 1.4 billion people in 1950 to 3.7 billion in 2000
  • Demographic transition from high fertility and mortality rates to low fertility and mortality rates
demographic dividend
Demographic dividend

4

3

Demographic dividend

2

1

results in increased public spending on pensions
results in increased public spending on pensions

If the past relationship between demography and public spending on old-age pensions continue:

  • Expenditure of national income devoted to pensions in Asia, excluding China, will rise from 2% in 1990 to 10% in 2050
  • Expenditure of national income devoted to pensions in China will rise from 3% in 1990 to over 13% in 2050
2 declining family support for elderly
2. Declining family support for elderly …
  • Traditionally, Asian families provide support for the elderly relatives
  • Increased mobility from rural to urban areas is weakening traditional support
  • Changing family structure: declining birth rates, increasing number of single head households
needs to be supplemented by formal mechanisms
needs to be supplemented by formal mechanisms
  • Pure market solutions (individual savings) work to some extent, but often fail
    • Shortsighted behavior, leading to insufficient saving when young
    • Lack of reliable savings instruments
  • Governments interventions are required
    • Mandatory pensions plans, means-tested assistance
    • Regulation and supervision, information, …
3 globalization
3. Globalization …
  • Increased integration of markets and growing mobility across the world
  • Labor market policies need to balance between addressing inequality and efficiency
requires adjusted pension design
requires adjusted pension design
  • Public programs, including pension schemes, will have to be adjusted
  • Pension designed to accommodate mobility of the labor force, not only between public and private sector, but also across states
major areas of concern
Major areas of concern
  • DB schemes: fiscal sustainability – link between contributions and benefits
  • Funded schemes: investment policy and performance
  • Overall:
    • governance and management of the pension systems
    • limited coverage
changing environment for asian pension systems
Changing environment for Asian pension systems
  • New requirements
    • Increased demand for old-age protection
    • Increased formalization
    • Increased flexibility
  • Existing situation
    • Limited coverage
    • Need for improved governance
    • Need for improved pension design
iii way forward
III. Way forward
  • Objective: pension systems that deliver adequate and affordable benefits in sustainable way
  • Reform towards multi-pillar pension systems
  • A long-term endeavor!

* World Bank. 2005. Old-Age Income Support in the Twenty-first Century: An International Perspective on Pension Systems and Reform (Holzmann, R. and others)

basic goals of pensions
Basic goals of pensions
  • Reducing or preventing poverty among the elderly
  • Providing adequate retirement income, maintaining same standard of living, smoothing of lifetime consumption
  • Encourage economic growth through increased saving
  • These goals can be addressed by a multi-pillar pension system
role of multilateral development banks
Role of Multilateral Development Banks
  • Raise awareness among policy makers
  • Assist in pension reform when support is required
  • Available tools
    • TA to prepare reform
    • Loan programs to assist in implementation
pension reform needs
Pension reform needs
  • Following Asian financial crisis focus on strengthening financial market institutions
  • Emerging reform needs
    • sustainability of the maturing pension systems
    • adequacy and affordability of the pension systems for the ageing population
  • Pension reform in Asia and Pacific is still at the initial stage
for more information

For More Information

(Michiel Van der Auwera, e-mail: [email protected])

Web site: www.adb.org

ad