Policies to Promote Saving forRetirement : A Synthetic Overview

Vittas, Dimitri

World Bank, Washington, D.C.

关键词: ADEQUATE DISCLOSURE;    ADMINISTRATIVE COSTS;    ADVERSE SELECTION;    AFFILIATES;    ANNUITY;   

DOI  :  10.1596/1813-9450-2801
RP-ID  :  WPS2801

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The author argues that public andprivate pillars are essential for a well-functioning pensionsystem. Public pillars, funded or unfounded, offer basicbenefits that are independent of the performance offinancial markets. Since financial markets suffer fromprolonged, persistent, and large deviations from long-termtrends, they cannot be relied on as the sole provider ofpension benefits. Funded pillars provide benefits that arebased on long-term capital accumulation and financial marketperformance. But they need to be privately managed tominimize dependence on public sector institutions and avoidgovernment dominance of the economy and financial markets.The author focuses mainly on the promotion, structure, andregulation of funded pillars. He discusses the case forusing compulsion and tax incentives, for exempting somecategories of workers such as the very young (under 25), thevery old (over the normal retirement age), the very poor(those earning less than 40 percent of the average wage),and the self-employed, and for offering a credit transfer tobe added to individual capitalization accounts to encourageparticipation by lower-income groups. A robust regulatoryframework with a panoply of prudential and protective rulescovering "fit and proper" tests, assetdiversification and market valuation rules, legalsegregation of assets and safe external custody, independentfinancial audits and actuarial reviews, and adequatedisclosure and transparency would be essential. Aneffective, proactive, well-funded, and properly staffedsupervision agency would be necessary. Tight investmentrules could initially be justified for countries with weakcapital markets and limited tradition of private pensionprovision. But in the long run, adoption of the"prudent expert" approach with publication of"statements of investment policy objectives"(SIPOs) would be preferable and more efficient. Variousguarantees covering aspects such as minimum pension levelsand relative investment returns need to be provided toprotect workers from aberrant asset managers and insolvencyof annuity providers, but care must be taken to addresseffectively the risk of moral hazard. The author also arguesfor greater individual choice, including the creation of adual regulatory structure. One part would involve heavyregulation with constrained choice of investment funds,limits on operating fees and on account switching, andstrong government safeguards and guarantees. This wouldcater to those workers with low risk tolerance. The otherpart would be more liberal but based on strong conductrules. It would offer greater choice of investment funds,allowing multiple accounts and liberal account switching,impose no limits on operating fees, and providing no orfewer state guarantees. This would cater to workers seekinga higher return and who are willing to tolerate a higherlevel of risk.