In the late 1990s many countries in Europe mainly in Central and Eastern Europe and the Commonwealth of Independent States, but also Sweden introduced an old-age pension reform changing both the financing method as well as the benefit formula. A funded pillar was introduced as well as the defined contribution formula.
This pension design was recommended, among others, by international financial institutions. The rationale of the reforms was:
- to secure a higher rate of return and as a consequence higher benefits;
- to build capital markets;
- to raise savings in the economy;
- to provide incentives for participation in the labour market;
- to reduce the fiscal burden associated with pay-as-you-go systems.
While the pension system design rate of contributions, formula, institutional setup differed between the countries, it was still possible to view the new systems as a model solution. The reform approach implied that the institutions responsible for collecting contributions and for fund management in the second pillar were established from the start of the reform, and the payout phase was left for a later stage. Nowadays with the benefit payments in place, considerable interest is currently focused on the payout administration as many countries are still in the process of taking a decision on this aspect.
The recent financial crisis has had a serious impact on the old-age pension systems particularly those which have funded components. As a response to these developments, some countries have undertaken or are considering undertaking policy activities, particularly downsizing the funded pillar, among others. Some allow for leaving the funded pillar, while some are decreasing the contribution to the funded pillar. There are yet other modifications to the pension systems foreseen.
The objective of this seminar is to compare the experiences between the countries and to draw some general lessons. The main questions are:
- What is the overall assessment of the reformed pension systems, not only in the context of the financial crisis?
- What are the reasons for specific modification measures?
- What is the expected outcome of these measures?
- What is the institutional response how are the social security institutions adapting to those modifications in the systems?
- How, in particular, has the payout administration been designed in the second pillar and how has this turned out in practice?
The seminar will address two main issues:
- The trend in reforming systems with funded public pensions and defined contributions.
- Choosing and designing the payout models/administration for the funded pillar and defined contributions.
The organizers believe these issues are of interest for many members of the ISSA European Network and in particular for those who like Poland introduced a funded pillar in the public pension scheme.
The working languages of the seminar are English and Russian.
This seminar is hosted by the Social Insurance Institution (ZUS), Poland, which is a member of the ISSA European Network.
Please note that participation is restricted to members registered in the ISSA European Network.