Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came into force on 30th September 1961, the Organisation for Economic Co-operation and Development (OECD) shall promote policies designed:-to achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability, and thus to contribute to the development of the world economy; -to contribute to sound economic expansion in Member as well as non-member countries in the process of economic development; and -to contribute to the expansion of world trade on a multilateral, non-discriminatory basis in accordance with international obligations. The original Member countries of the OECD are Austria,

Analysis of pension schemes and recommendations fortheir reform have been one of the main items on the agenda of international organizations in recent years. However, the ideas and recommendations of the various organizations involved in pension policy sometimes vary considerably. This paper will explore and compare the ideas on pension policy held by the International Labour Office, the International Social Security Association, the World Bank, the International Monetary Fund and the Organisation for Economic Co-operation and Development. Although, initially, the discussion of pension reform was characterized by fierce debate with a marked ideological bent, all the participants are now aiming at mutual understanding and, in particular, coordination and cooperation in member States and recipient countries. The previous, dogmatic approach has given way to a predominantly pragmatic position.

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the (indings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent.Produced by the Policy Research Dissemination Center 1.3 Main Findings: First Pillar Coverage * The public pillar has achieved near universal coverage. Since 1997, all residents, including non-working persons, are required to contribute regardless of their employment status. In 1998, 3.8 million people contributed to the first pillar, out of a total economically active population of 4.3 million people. Benefits * Pension benefits are modest and are characterized by low dispersion. The maximum public pension is aboul 40 percent of average earnings, while the minimum pension amounts to about 20 percent. * A progressive benefit formula that is resistant to strategic manipulation is used.Recent changes in the benefit formnula, coupled with the use of supplementary benefits, suggest a gradual move toward "flat" benefits. • Normal retirement ages at 65 for men and 62 for women are reasonable (that of women is scheduled to rise gradually to 64 by 2001), while early retirement is discouraged. * Disability pensions have increased much faster than old age pensions. In the early and mid-1990s, this reflected the use of disability pensions for dealing with the growing unemployment of older vworkers in declining industries. Disability pensions convert to old age pensions on reaching the normal retirement age. -Low-income earners and disabled workers have a high replacement rate from the public pillar. But because minimum pensions are below the official poverty line, means-tested supplementary benefits are provided to those with total incomes below the poverty line. • Pension benefits (and lifetime earnings) are linked to "Swiss" indexation, i.e. the average of price and wage inflation, an inventive compromise between full inflation protection and full participation in the fruits of economic growth. * The public pension system is highly redistributive. There are no ceilings on contributions, while there is a maximum benefit that amounts to twice the minimum pension. The functioning of such a pillar depends on compliance and a widespread sense of solidarity since the link between contributions and benefits is very weak. * The first pillar has over the years introduced significant benefit innovations, although some may be more expensive than others. The most recent include bonus credits for child rearing and assisted living as well as the splitting of pension benefits between spouses. * The overall System Dependency ]Ratio (the number of beneficiaries to contributors) exce...

This article provides a survey of selected aspects of the relationship between public and private pension provision in European countries in the Organisation for Economic Co-operation and Development and compares this with other regions of the OECD. Population ageing has led many OECD countries to undertake a wide range of pension reforms. The overall effect of these reforms has in many cases been to significantly reduce public pension promises. This, in turn, has increased the interest in the role of private pensions, which has expanded significantly in a number of OECD countries. The article discusses the extent to which a number of countries will need to further increase private provision in order to guarantee adequate future retirement incomes.

In the early 1990s, pension reforms leading to substantial changes in the organization and financing of old age security were undertaken in Argentina, Colombia and Peru. Implemented ten years after the pioneer reforms in Chile, they have taken advantage of the experiences and lessons of the Chilean case; at the same time, the second‐generation reforms clearly demonstrate the restrictions policy makers are being faced with in a democratic political context. This paper examines the recent pension reform experiences in Latin America and discusses their implications for a modified concept of old age security.