1 / 13

Pension Reform in Poland in the Context of Worldwide Reforms – the Challenges for the Future

Pension Reform in Poland in the Context of Worldwide Reforms – the Challenges for the Future. Michał Rutkowski The World Bank Wars aw , May 29, 2009. Before the reform. Before the reform the pension system in Poland was: --N on-Actuarial , -- Pay-As-You-Go , -- Defined Benefit

ssegal
Download Presentation

Pension Reform in Poland in the Context of Worldwide Reforms – the Challenges for the Future

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. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Pension Reform in Poland in the Context of Worldwide Reforms – the Challenges for the Future Michał Rutkowski The World Bank Warsaw, May 29, 2009

  2. Before the reform... Before the reform the pension system in Poland was: --Non-Actuarial, --Pay-As-You-Go, --Defined Benefit --With no choice for participants

  3. The reform…. • The reform was a move towards a system that is: • Actuarial • Funded, • Defined Contribution • Allowing for choice by the participant The objective was a mixed, diversified system – “Security through Diversity”

  4. „Security through Diversity” • „Security through Diversity” applies to all four dimensions: • NON-ACTUARIAL -- ACTUARIAL • PAYG-- FUNDED • DEF. BENEFIT - DEF. CONTRIBUTION • NO CHOICE - CHOICE

  5. Diversification • Actuarial - Non-Actuarial 70:30 • Funded -PAYG 35:65 • Def. Conrib. - Def. Benefit 80:20 • Choice – No Choice 35:65

  6. After the reform... • Diversified system, structurally healthy • Discussions about the threshold for social security contributions, minimum pension level, or the size of the funded part do not affect the structure of the system

  7. Quality of the new system • Quality of its “actuariality” • Quality of its funding • Quality of the defined-contribution approach • Quality of the real choices for participants

  8. “Actuariality” • Ensuring the right to pension in both parts of the system • Office of the chief actuary • Using demographic projections • Estimating the real tax wedge • Popular understanding of the system

  9. Quality of the funded component • Administrative constraints • Freedom of choice • Investing abroad

  10. Defined contribution? • Who bears the risk? • The role of guarantees

  11. Choice • Real or fictitious? • Who chooses? Chooses among what? • Similarities and differences of those who choose and those who are chosen

  12. Reforms in the world: same direction • Europa: “old” and “new” • United States • Reforms elsewhere

  13. Remaining fundamental challenges • Payouts from the new system • Increasing the coverage of the new system • Other?

More Related