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Journal of Economics

, Volume 58, Supplement 1, pp 191–218 | Cite as

Reforming old-age pensions systems in Central and Eastern European countries in transition

  • Robert Holzmann
Article

Abstract

This paper investigates the need and the options for reforming the inherited public pension schemes in Central and Eastern European countries moving from a centrally planned to a market-oriented economic structure.

Pension expenditure as a percentage of GDP in the former centrally planned economies are still somewhat below the (unweighted) average experienced in the OECD area. Nevertheless, the burden on the economy in the reform countries is considerable and going to rise starkly unless major reforms are undertaken. In addition, the current pension systems exhibit various deficiencies at microeconomic level (in the area of the benefit formula, retirement age, indexation procedures, financing and taxation) which need to be corrected in order to reduce distortions on individual labor supply and saving decisions.

The pension models in mind by the reformers in economies in transition (ETs) range from basic public pensions (on a universal or means tested basis), to a two tier public system (consisting of a basic flat rate plus a limited earnings related pension scheme), to an earnings related public scheme targeted toward the lower and middle income levels. In all cases any additional income requirement for old-age would be covered by private provisions (on mandatory, collective or voluntary basis) under appropriate public regulations. This paper provides a preliminary assessment of three main options for going private, namely (i) the social security debt — government asset swap; (ii) the conversion option (Chilean approach); and the tax induced phasing in-phasing out option. The paper concludes that private and funded options may play some role in the solution of the public pension problem, but the scope still remains uncertain.

Keywords

Pension Fund Pension System Pension Scheme Public Pension Pension Benefit 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Zusammenfassung

Die vorliegende Arbeit untersucht die Notwendigkeit und die Optionen für eine Reform der Pensionssysteme in den Reformökonomien Mittel- und Osteuropas auf ihrem Weg von der Plan- zur Marktwirtschaft.

Die Pensionsausgaben in Prozent des BIP in den ehemaligen Planwirschaften liegen zwar noch etwas unter dem (ungewichteten) Durchschnitt der OECD-Staaten. Aufgrund des wesentlich geringeren BIP pro Kopf in den Reformländern ist die Belastung der Wirtschaft jedoch beträchtlich und würde ohne Reform noch weiter und wesentlich ansteigen. Hinzu kommt, da\ die gegenwärtigen Pensionssysteme durch eine Reihe mikroökonomischer Strukturmängel (im Bereich der Pensionsformel, der Finanzierung oder der Besteuerung) gekennzeichnet sind, welche beseitigt werden müssen, um die bestehenden Verzerrungen auf individuelles Arbeitsangebot- und Sparentscheidungen zu verringern.

Die alternativen Pensionsmodelle in den Vorstellungen der Reformer reichen vom Basissystem (mit und ohne Bedarfsprüfung), über zweistufige Systeme (bestehend aus Grundversorgung plus cinem begrenzten einkommensbezogenen Zusatzsystem) hin zu einem einkommensbezogenen System, welches auf den unteren bis mittleren Einkommensbereich abzielt. In allen Fällen würde ein zusätzlicher Einkommensbedarf im Alter durch private Vorsorge (auf Zwangs-, kollektiver oder freiwilliger Basis) zu decken sein. Die Arbeit unternimmt eine erste Bewertung der drei Hauptoptionen zur raschen Einführung privater Altersvorsorge, nämlich (i) den Austausch der (impliziten) Sozialversicherungschulden gegen staatliche Aktiva im Rahmen der Privatisierungs-programme; (ii) den Übergang vom Umlagesystem zum Kapitaldeckungssystem durch Explizitmachung der Staatsschuld (chilenischer Ansatz); und (iii) die schrittweise Einführung von steuerlich geförderter Privatvorsorge bei Verringerung der staatlichen Vorsorge. Die vorläufige Schlußfolgerung der Arbeit lautet, da\ private und kapitalgedeckte Optionen einen Beitrag zur Lösung des Pensionsproblems leisten könnten, der Umfang und die ökonomischen Wirkungen bleiben jedoch noch ungewi\.

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Copyright information

© Springer-Verlag 1993

Authors and Affiliations

  • Robert Holzmann
    • 1
  1. 1.University of SaarlandSaarbrückenFederal Republic of Germany

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