Public Pension Reform: A Primer

Abstract

This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.The present paper reviews key issues in pension design and pension reform encountered all across the world. The paper heavily refers to the recent U.S. Social Security reform debate in general and to the Personal Retirement Accounts proposal in particular. A particular emphasis is put on annuitization and risk-taking in the economy. Our discussion signals some inadequacy of the proposed measures with respect to the goals of viability of the system and individual financial security during retirement. JEL Classification Numbers: G23, H31, H53, H55, J11, J26

Social Security Reforms in Colombia: Striking Demographic and Fiscal Balances

“…In the case of Colombia, this would imply retirement ages be increased to 64/67 (female/male). This would still be below the 69 benchmark envisioned for the United States in the coming decades (see Advisory Council on Social Security, 1997;Jousten, 2007).…”

Pension policy design changes inEUcountries since the mid‐1990s

“…Some countries, notably the UK, place this role more squarely on the shoulders of individuals. However, there are a number of economic reasons, primarily related to adverse selection, moral hazard and myopia, why this role has been organised on a national basis (see Jousten, ). On a more technical side, it is increasingly better understood that decentralised or individualised income smoothing arrangements tend to come at great cost and fail to take advantage of economies of scale in investment and administration.…”