This paper looks at how pension systems across Asia and the Pacific can overcome common challenges of low contributory coverage, inadequate social pensions, and failure to include the informal sector.
Authors
- DOI
- http://dx.doi.org/10.22617/WPS240486-2
- Dimensions
- 8.5x11
- ISSN
- 2313-6537(print) 2313-6545(PDF)
- Pages
- 57
- Published in
- Philippines
- SKU
- WPS240486-2
- pages
- 56
Table of Contents
- Abstract 4
- I. Introduction: A Constellation of Challenges 5
- II. Pension System Designs 12
- III. Coverage and Adequacy via Contributory Schemes 14
- A. Stubborn Informality 14
- B. Low-Hanging Fruit 15
- C. Covering Migrant Workers 16
- D. Getting More from Voluntary Schemes 17
- E. Delivering Adequacy and Sustainability in Contributory Schemes 18
- F. Increasing Adequacy via Redistribution within Contributory Schemes 20
- IV. Coverage and Adequacy via Social Pensions 21
- A. The Incomplete Bridge for the Coverage and Adequacy Gap 21
- B. Raising Social Pension Benefit Levels to Improve Adequacy 22
- C. Improving Targeting 25
- D. Who benefits? Is it distortionary? Is it simple? 26
- E. Why Targeting is Superior to Universality in Principle 26
- F. Means Testing and Proxy Means Testing 27
- G. Simplifying Targeting 29
- H. Simulating the Fiscal Impact of Targeting 30
- V. Other Policy Perspectives and Innovations 32
- A. The Interaction between Pensions and Work Incentives 32
- B. The Interaction between Pensions and Private Transfers 33
- C. Automatic Adjustment Mechanisms in Pension Systems 34
- D. Governance Issues in Pension Systems 35
- E. Pension Systems in Asia and the Pacific During COVID-19 38
- F. Gender Dimensions of Pension Systems in Asia and the Pacific 39
- G. Innovation Highlight: Better Financial Decisions for and in Old Age 41
- H. Innovation Highlight: How Financialization and Digitalization Can Benefit Pensions 42
- VI. Summary and Conclusions 46
- References 51
- Figures 7
- 1: Pension Context, Parameters, and Outcomes 7
- 2: Pension System Structure 10
- 3: Informal Employment and Contributory Pension Coverage 14
- 4A: Net and Gross Replacement Rates 20
- 4B: Net Replacement Rates for High- and Low-Income Earners 21
- 5: Social Pension Coverage and Benefit Levels 22
- 6A: Simulated Old Age Poverty Rates, By Level of Benefit and PPP Poverty Lines 23
- 7A: Simulated Social Pension Fiscal Cost, By Share of 65+ Population Receiving (% of GDP) 30
- 7B: Simulated Fiscal Cost of Universal Social Pension with Variable Eligibility Age (% of GDP) 31
- 8: Levels of Trust in Business and Government 38
- 9: How Different Pension Systems Rank on Gender Outcomes 41
- 10: Choice Architecture Example in Australia’s Defined Contributions Scheme 42
- 11A: Percentage of Population 15+ with Bank Accounts, 2011 and Latest Available 44
- 11B: Main Reasons for Not Having Account, Selected Asian Economies and Latest Available year 44
- 11C: Percentage of Government Transfer and Pension Beneficiaries Age 15+ Paid Through Account 45
- 11D: Percentage of 15+ Population Saving at Financial Institution or Mobile Account, By Gender, Selected Asian Economies 45
- Box: Welfare Impacts of Pensions 25
