The regulation and supervision ofindividual pension accounts has been a neglected issue. Incontrast, much has been written on financing the transitionto funded pensions and the design of benefits. Yet effectiveregulation and efficient supervision are crucial to thesuccess of pension reform. This note explores six issues inthe design of a supervisory regime. It makes somecomparisons between the performances of agencies indifferent countries and looks at four important areas ofsupervision : institutional and financial controls, andmembership and benefits procedures. Some of the conclusionspresented in this note are : professional expertise,transparency and perceived independence of supervisoryagencies is essential to the success of pension reform; incountries where existing regulation is weak or ineffective,a new, separate agency is probably best placed (but notcertain) to avoid repeating past failures; administrativeindependence is similarly preferable; salaries must becompetitive with the private sector (and remain so) torecruit qualified personnel from public and private sectorsand to limit corruption risk; separation of regulation andsupervision can help limit the risk of regulatory capture.
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