Coverage : The Scope of Protection in Retirement Income Systems

The coverage of old-age protection systems is a central concern in developing countries. While most countries mandate that workers make contributions to a retirement-savings plan, fewer than ten per cent comply in South Asia and Sub-Saharan Africa,...

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Main Author:	World Bank
Format:	Brief
Language:	English
Published:	Washington, DC 2012
Subjects:	AFFILIATES AGENTS ALTERNATIVE INVESTMENTS ANNUAL STATEMENTS ANNUITY BASIC PENSION CERTAIN EXTENT COVERAGE DEFINED-BENEFIT SCHEMES DEPOSITS DISCOUNT RATES ECONOMETRIC EVIDENCE ECONOMIES OF SCALE EFFECTIVE USE EMPIRICAL EVIDENCE FINANCIAL RESOURCES FIXED COSTS FUNDED ACCOUNTS GOVERNMENT INTERVENTION GOVERNMENT REGULATIONS GROUP INSURANCE HUMAN DEVELOPMENT INCOME INCOME LEVELS INFORMAL SECTOR INSURANCE INVESTMENT RETURNS LABOR COSTS LABOR FORCE LATIN AMERICAN LAWS LEGAL PROTECTION LIFE EXPECTANCY LONGEVITY INSURANCE MANDATES MARGINAL COSTS PENSION COVERAGE PENSION REFORM PENSION REFORMS PENSION RIGHTS PENSION SCHEMES PENSION SYSTEM PENSION SYSTEMS PENSIONERS PENSIONS PRIVATE PENSION PRIVATIZATION PRODUCTIVITY PROGRAMS PROVIDENT FUNDS REPLACEMENT RATE REPLACEMENT RATE TARGETS RESEARCH AGENDA RETIREMENT RETIREMENT AGES RETIREMENT INCOME RETIREMENT INCOME SYSTEMS SAHARA SAVINGS SOCIAL COSTS SOCIAL INSURANCE SOCIAL PROTECTION SOCIAL SECURITY SOLVENCY STATE ENTERPRISES SUB-SAHARAN AFRICA TAX ADMINISTRATION TAX COLLECTION TAX COMPLIANCE TAX TREATMENT TAXATION TRANSACTION COSTS TRANSITION ECONOMIES WAGE RULES WAGES
Online Access:	http://documents.worldbank.org/curated/en/2005/07/6258736/coverage-scope-protection-retirement-income-systems http://hdl.handle.net/10986/11214

id	okr-10986-11214
recordtype	oai_dc
spelling	okr-10986-112142021-04-23T14:02:54Z Coverage : The Scope of Protection in Retirement Income Systems World Bank AFFILIATES AGENTS ALTERNATIVE INVESTMENTS ANNUAL STATEMENTS ANNUITY BASIC PENSION CERTAIN EXTENT COVERAGE DEFINED-BENEFIT SCHEMES DEPOSITS DISCOUNT RATES ECONOMETRIC EVIDENCE ECONOMIES OF SCALE EFFECTIVE USE EMPIRICAL EVIDENCE FINANCIAL RESOURCES FIXED COSTS FUNDED ACCOUNTS GOVERNMENT INTERVENTION GOVERNMENT REGULATIONS GROUP INSURANCE HUMAN DEVELOPMENT INCOME INCOME LEVELS INFORMAL SECTOR INSURANCE INVESTMENT RETURNS LABOR COSTS LABOR FORCE LATIN AMERICAN LAWS LEGAL PROTECTION LIFE EXPECTANCY LONGEVITY INSURANCE MANDATES MARGINAL COSTS PENSION COVERAGE PENSION REFORM PENSION REFORMS PENSION RIGHTS PENSION SCHEMES PENSION SYSTEM PENSION SYSTEMS PENSIONERS PENSIONS PRIVATE PENSION PRIVATIZATION PRODUCTIVITY PROGRAMS PROVIDENT FUNDS REPLACEMENT RATE REPLACEMENT RATE TARGETS RESEARCH AGENDA RETIREMENT RETIREMENT AGES RETIREMENT INCOME RETIREMENT INCOME SYSTEMS SAHARA SAVINGS SOCIAL COSTS SOCIAL INSURANCE SOCIAL PROTECTION SOCIAL SECURITY SOLVENCY STATE ENTERPRISES SUB-SAHARAN AFRICA TAX ADMINISTRATION TAX COLLECTION TAX COMPLIANCE TAX TREATMENT TAXATION TRANSACTION COSTS TRANSITION ECONOMIES WAGE RULES WAGES The coverage of old-age protection systems is a central concern in developing countries. While most countries mandate that workers make contributions to a retirement-savings plan, fewer than ten per cent comply in South Asia and Sub-Saharan Africa, as compared to higher-income OECD countries which cover 80 per cent or more of their workforce. Economic development is the major determinant of coverage protection for retirement systems, with the level of income per capita as an excellent predictor of coverage rates. The note concludes that : a) coverage rates track income levels closely and evasion is driven by the high cost of joining the formal sector; b) pension scheme design can exacerbate the evasion problem; c) a poorly designed and managed scheme should be reformed prior to attempts to expand its coverage; d) extending financial solvency of a pay-as-you-go scheme is not a good rationale for expanding coverage; e) a safety net can help cover the inevitable gaps in a contributory scheme; f) defined contribution schemes tend to provide better incentives for coverage; g) creative approaches to expanding coverage include direct matching contributions for low income workers and finding ways to reduce transaction costs by harnessing existing groups. 2012-08-13T14:28:05Z 2012-08-13T14:28:05Z 2005-07 http://documents.worldbank.org/curated/en/2005/07/6258736/coverage-scope-protection-retirement-income-systems http://hdl.handle.net/10986/11214 English World Bank Pension Reform Primer Series CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Washington, DC Publications & Research :: Brief Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	AFFILIATES AGENTS ALTERNATIVE INVESTMENTS ANNUAL STATEMENTS ANNUITY BASIC PENSION CERTAIN EXTENT COVERAGE DEFINED-BENEFIT SCHEMES DEPOSITS DISCOUNT RATES ECONOMETRIC EVIDENCE ECONOMIES OF SCALE EFFECTIVE USE EMPIRICAL EVIDENCE FINANCIAL RESOURCES FIXED COSTS FUNDED ACCOUNTS GOVERNMENT INTERVENTION GOVERNMENT REGULATIONS GROUP INSURANCE HUMAN DEVELOPMENT INCOME INCOME LEVELS INFORMAL SECTOR INSURANCE INVESTMENT RETURNS LABOR COSTS LABOR FORCE LATIN AMERICAN LAWS LEGAL PROTECTION LIFE EXPECTANCY LONGEVITY INSURANCE MANDATES MARGINAL COSTS PENSION COVERAGE PENSION REFORM PENSION REFORMS PENSION RIGHTS PENSION SCHEMES PENSION SYSTEM PENSION SYSTEMS PENSIONERS PENSIONS PRIVATE PENSION PRIVATIZATION PRODUCTIVITY PROGRAMS PROVIDENT FUNDS REPLACEMENT RATE REPLACEMENT RATE TARGETS RESEARCH AGENDA RETIREMENT RETIREMENT AGES RETIREMENT INCOME RETIREMENT INCOME SYSTEMS SAHARA SAVINGS SOCIAL COSTS SOCIAL INSURANCE SOCIAL PROTECTION SOCIAL SECURITY SOLVENCY STATE ENTERPRISES SUB-SAHARAN AFRICA TAX ADMINISTRATION TAX COLLECTION TAX COMPLIANCE TAX TREATMENT TAXATION TRANSACTION COSTS TRANSITION ECONOMIES WAGE RULES WAGES
spellingShingle	AFFILIATES AGENTS ALTERNATIVE INVESTMENTS ANNUAL STATEMENTS ANNUITY BASIC PENSION CERTAIN EXTENT COVERAGE DEFINED-BENEFIT SCHEMES DEPOSITS DISCOUNT RATES ECONOMETRIC EVIDENCE ECONOMIES OF SCALE EFFECTIVE USE EMPIRICAL EVIDENCE FINANCIAL RESOURCES FIXED COSTS FUNDED ACCOUNTS GOVERNMENT INTERVENTION GOVERNMENT REGULATIONS GROUP INSURANCE HUMAN DEVELOPMENT INCOME INCOME LEVELS INFORMAL SECTOR INSURANCE INVESTMENT RETURNS LABOR COSTS LABOR FORCE LATIN AMERICAN LAWS LEGAL PROTECTION LIFE EXPECTANCY LONGEVITY INSURANCE MANDATES MARGINAL COSTS PENSION COVERAGE PENSION REFORM PENSION REFORMS PENSION RIGHTS PENSION SCHEMES PENSION SYSTEM PENSION SYSTEMS PENSIONERS PENSIONS PRIVATE PENSION PRIVATIZATION PRODUCTIVITY PROGRAMS PROVIDENT FUNDS REPLACEMENT RATE REPLACEMENT RATE TARGETS RESEARCH AGENDA RETIREMENT RETIREMENT AGES RETIREMENT INCOME RETIREMENT INCOME SYSTEMS SAHARA SAVINGS SOCIAL COSTS SOCIAL INSURANCE SOCIAL PROTECTION SOCIAL SECURITY SOLVENCY STATE ENTERPRISES SUB-SAHARAN AFRICA TAX ADMINISTRATION TAX COLLECTION TAX COMPLIANCE TAX TREATMENT TAXATION TRANSACTION COSTS TRANSITION ECONOMIES WAGE RULES WAGES World Bank Coverage : The Scope of Protection in Retirement Income Systems
relation	World Bank Pension Reform Primer Series
description	The coverage of old-age protection systems is a central concern in developing countries. While most countries mandate that workers make contributions to a retirement-savings plan, fewer than ten per cent comply in South Asia and Sub-Saharan Africa, as compared to higher-income OECD countries which cover 80 per cent or more of their workforce. Economic development is the major determinant of coverage protection for retirement systems, with the level of income per capita as an excellent predictor of coverage rates. The note concludes that : a) coverage rates track income levels closely and evasion is driven by the high cost of joining the formal sector; b) pension scheme design can exacerbate the evasion problem; c) a poorly designed and managed scheme should be reformed prior to attempts to expand its coverage; d) extending financial solvency of a pay-as-you-go scheme is not a good rationale for expanding coverage; e) a safety net can help cover the inevitable gaps in a contributory scheme; f) defined contribution schemes tend to provide better incentives for coverage; g) creative approaches to expanding coverage include direct matching contributions for low income workers and finding ways to reduce transaction costs by harnessing existing groups.
format	Publications & Research :: Brief
author	World Bank
author_facet	World Bank
author_sort	World Bank
title	Coverage : The Scope of Protection in Retirement Income Systems
title_short	Coverage : The Scope of Protection in Retirement Income Systems
title_full	Coverage : The Scope of Protection in Retirement Income Systems
title_fullStr	Coverage : The Scope of Protection in Retirement Income Systems
title_full_unstemmed	Coverage : The Scope of Protection in Retirement Income Systems
title_sort	coverage : the scope of protection in retirement income systems
publisher	Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2005/07/6258736/coverage-scope-protection-retirement-income-systems http://hdl.handle.net/10986/11214
_version_	1764415933522116608

Coverage : The Scope of Protection in Retirement Income Systems

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