Reforming Pensions in Developing and Transition Countries

362 Pages·2014·2.117 MB·English

by  Katja Hujo (eds.)

Social Policy in a Development Context
Social Policy in a Development Context is a new series which places social
policy at the centre of research while maintaining the United Nations Research
Institute for Social Development (UNRISD)’s unified approach to social devel-
opment. The series provides a new and exciting contribution to the literature
in economic development and social policy. In economic development, social
policy has been recognized as an integral part of development, but the literature
often falls short of elaborating social policy for a unified approach to economic
and social development. In social policy, analysis has concentrated mainly on
European and North American countries, and studies on developing countries
often lack comparative rigour. The bridge between economic development and
social policy will not only contribute to the academic research but also inform
the policy debate at the international and national levels.
Titles include:
Katja Hujo (editor)
REFORMING PENSIONS IN DEVELOPING AND TRANSITION COUNTRIES
Ilcheong Yi and Thandika Mkandawire (editors)
LEARNNG FROM THE SOUTH KOREAN DEVELOPMENTAL SUCCESS
Effective Developmental Cooperation and Synergistic Institutions and Policies
Katja Hujo (editor)
MINERAL RENTS AND THE FINANCING OF SOCIAL POLICY
Opportunities and Challenges
Katja Hujo and Nicola Piper (editors)
SOUTH-SOUTH MIGRATION
Implications for Social Policy and Development
Katja Hujo and Shea McClanahan (editors)
FINANCING SOCIAL POLICY
Mobilizing Resources for Social Development
Naren Prasad (editor)
SOCIAL POLICIES, AND PRIVATE SECTOR PARTICIPATION IN WATER SUPPLY
Yusuf Bangura (editor)
DEMOCRACY AND SOCIAL POLICY
Jìmí O. Adésínà (editor)
SOCIAL POLICY IN SUB-SAHARAN AFRICAN CONTEXT
In Search of Inclusive Development
Manuel Riesco (editor)
LATIN AMERICA
A New Developmental Welfare State Model in the Making?
Giovanni Andrea Cornia (editor)
PRO-POOR MACROECONOMICS
Potential and Limitations
Shahra Razavi and Shireen Hassim (editors)
GENDER AND SOCIAL POLICY IN A GLOBAL CONTEXT
Uncovering the Gendered Structure of ‘the Social’
Massoud Karshenas and Valentine M. Moghadam (editors)
SOCIAL POLICY IN THE MIDDLE EAST
Political, Economics and Gender Dynamics
Maureen Mackintosh and Meri Koivusalo (editors)
COMMERCIALIZATION OF HEALTH CARE
Global and Local Dynamics and Policy Responses
Olli Kangas and Joakim Palme (editors)
SOCIAL POLICY AND ECONOMIC DEVELOPMENT IN THE NORDIC COUNTRIES
Huck-ju Kwon (editor)
TRANSFORMING THE DEVELOPMENTAL WELFARE STATE IN EAST ASIA
Thandika Mkandawire (editor)
SOCIAL POLICY IN A DEVELOPMENT CONTEXT
Social Policy in a Development Context
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Reforming Pensions in
Developing and Transition
Countries
Edited by
Katja Hujo
© UNRISD 2014
Softcover reprint of the hardcover 1st edition 2014 978-1-137-39610-5
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ISBN 978-1-349-48451-5 ISBN 978-1-137-39611-2 (eBook)
DOI 10.1057/9781137396112
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Contents
List of Figures vii
List of Tables and Boxes viii
Preface x
Notes on the Contributors xiii
List of Abbreviations and Acronyms xvii
Introduction
1 Reforming Pensions in Developing and
Transition Countries: Trends, Debates and Impacts 3
Katja Hujo
Part I Political Economy Issues in Pension Reform
2 Pension Privatization and Economic Development
in Central Eastern European Pension Reform 41
Katharina Müller
3 Pension Schemes and Pension Reforms in the Middle
East and North Africa 69
Markus Loewe
4 The Reform of the Civil Service Pension Programme
in Korea: Changes and Continuity 101
Huck-ju Kwon
Part II Pension System and Reform in the BRICS
5 Recent History, Perspectives and Challenges to
Pension Policy: The Brazilian Case 127
Marcelo Abi-Ramia Caetano
6 Social Security Reform and Economic Development:
The Case of India 158
Mukul G. Asher and Azad Singh Bali
7 Towards Universal Coverage: A Macro Analysis of
China’s Public Pension Reform 187
Lianquan Fang
v
vi Contents
8 The Private Affairs of Public Sector Pensions in
South Africa: Debt, Development and Corporatization 220
Fred Hendricks
Part III Bringing the State Back In
9 Pension Reform in Bolivia: Two Models of Income
Security in Old Age 251
Peter Lloyd-Sherlock and Kepa Artaraz
10 Towards More Inclusive Protection: A Comparative
Analysis of the Political Process and Socio-Economic
Impact of Pension Re-Reforms in Argentina and Chile 278
Katja Hujo and Mariana Rulli
11 Reforming Pensions in Developing and
Transition Countries: Conclusions 311
Katja Hujo
Index 336
List of Figures
1.1 Coverage of pension programmes and public social
security/old-age expenditure, regional averages 5
3.1 HDI and GDP per capita rank of MENA and other countries 72
3.2 Coverage rates of pension schemes in MENA and
other countries 75
4.1 Three ideal types of public pension systems 103
4.2 Financial situation of the Civil Service Pension Programme 109
4.3 Estimated pension deficit after the reform 116
5.1 Poverty distribution by age with and without
government transfers 140
5.2 Old-age coverage ratio in Latin America, early 2000s:
beneficiaries/population 65 years old or more 142
5.3 Workforce coverage and per-capita income
(purchasing power parity dollars) 150
5.4 Transition cost of the Complementary Pension
Fund for Federal Civil Servants as share of GDP 152
6.1 India’s social security system: an overview 167
7.1 Trends and projections: population ageing and
old-age dependency, 2011–50 193
7.2 Old-age dependency ratio in four countries, 2010–50 194
7.3 Trends and ratios of rural to urban migration in
China, 2000–9 195
7.4 Number of participants in three pension
schemes/total participants 2010 201
7.5 Integration framework of four major pension plans 207
7.6 A unification framework for integrating pension schemes 208
8.1 Asset shares (as percentage of total) of PIC funds 236
vii
List of Tables and Boxes
Tables
1.1 Pension privatization, 1981–2012 13
1.2 Overview pre- and post-reform pension systems in
country case studies 16
1.3 Ideal types of pension models and fairness 20
1.4 Evaluation criteria for pension systems 23
1.5 Social transfers and old-age poverty in Latin America 24
1.6 Distribution of benefits from public social spending to the
richest and poorest quintiles in Latin America (per cent) 25
3.1 Coverage of public pension schemes 76
4.1 Major economic indicators in Korea (selected years 1961–81) 105
4.2 Life expectancy at birth in Korea (1965–2005) 106
4.3 Pension dependency ratio of the Civil Service Pension
Programme (selected years 1982–2007) 107
4.4 Number of early retirements in the civil service 108
4.5 Estimated effects of reform on individuals
(change in per cent) 116
4.6 Overview changes of Civil Service Pension Programme 118
5.1 Main characteristics of Brazilian pension schemes 130
5.2 Average effective retirement age and life expectancy 138
5.3 Poverty ratio by age group, Brazil and Latin America 141
5.4 Summary of the measures introduced by social
insurance reforms 146
6.1 India: selected indicators of macroeconomic performance 160
6.2 Selected demographic indicators 163
7.1 China’s key economic and welfare indicators, 1990 and 2011 190
7.2 Urban and rural annual income (yuan) 192
7.3 Participation ratio of rural migrants in pension
system, 2006–10 195
viii
List of Tables and Boxes ix
7.4 Four public pension programmes in China 199
7.5 Pension fund surplus in 31 provinces by 2010
(revenue-payment, million yuan) 202
7.6 Pension replacement rate 2000–10 203
7.7 Comparison of key features of the existing urban
pension and proposed NDC scheme 213
7.8 Projection on universal pension coverage (million) 214
8.1 Public state debt costs (interest payments); total
government debt, in R billion, 1999–2009 238
9.1 Socio-economic indicators for Bolivia and selected
Latin American countries 255
9.2 Private pension coverage of the economically
active population by income quintile and education 261
9.3 Composition of the Solidarity Fund in the
New Contributory Pension System 263
10.1 Argentinian pension reforms, 2003–8 286
10.2 Fiscal effects of the Chilean pension reform,
2009–25 (in per cent of GDP) 288
10.3 Coverage rates in Chile and Argentina,
1987–2009 (per cent) 291
10.4 Beneficiaries and benefits in the New Chilean
Solidarity Pillar, June 2011–December 2012 292
10.5 Evolution of pension benefits in Argentina, 2001–10 294
10.6 Coverage rates 65+ by gender: Argentina and Chile
(selected years) 296
10.7 Comparative evaluation of 2008 pension
reform in Chile and Argentina 298
Boxes
4.1 Civil Service Pensions’ formula before the reform 107
6.1 Main challenges facing EPFO 170
8.1 The case of Telkom 232
10.1 Chronology of Chilean pension reform, 2005–8 283