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Across the emerging world, policymakers are grappling with how to build retirement systems that meet the needs of their rapidly developing and rapidly aging societies. Nowhere is the challenge more urgent than in Asia, which is both developing and aging more rapidly than anywhere else on earth. Provident funds, which are fully funded, government-managed, defined contribution systems, have long been the dominant form of retirement provision in much of Asia. The purpose of this report is to assess the strengths and weaknesses of the provident fund model, evaluate the performance of three of Asia’s four largest provident funds, and identify steps that they and other provident funds can take to improve retirement security. The funds covered in the report are India’s Employees’ Provident Fund (EPF), Indonesia’s Jaminan Hari Tua (JHT), and Malaysia’s Employees Provident Fund (EPF). The report identifies two key features of the provident fund model that may make it an attractive choice for both governments and workers in emerging markets.

While Thailand’s pension system is typically described as a multipillar pension scheme, its design is highly fragmented and offers adequate coverage only to a small segment of the population, including civil servants and high-income individuals. In its 2018 Article IV report, the IMF highlighted the need for a broader pension reform, including parametric changes and ender inclusivepolicies to improve female labor force participation and attenuate the impact of aging on productivity growth. While these reforms are needed, private pensions can also play a role inimproving retirement income for individuals. As agreed with the Thai authorities, this technical note provides an assessment of the private, funded components of the pension system. A key component assessed is the voluntary provident fund scheme (PVD). The PVD scheme is voluntary and operates as a tax-incentivized scheme, which allows both employers and employees to take advantage of generous tax benefits for savings for retirement. This note also addresses the challenges of the private, funded system and proposes policy recommendations for increasing coverage, improving efficiency, and delivering sustainable retirement income in the payout phase. This note is organized as follows. The next section provides a brief description of the current overall pension system, public and private; Section III provides a diagnostic of the main challenges in the private, funded system; and Section IV provides recommendations for optimizing the design of the private, funded pension system. The focus of the note is to improve the incentive structure of the private, funded pension scheme.

LLM (Estate Law), North-West University, Potchefstroom Campus, 2017 When the tax treatment of pension and provident funds before and after the implementation of the Taxation Laws Amendment Act 25 of 2016 is compared, the positive effect of this Act on retirement planning becomes clear. The alignment of the tax treatment of pension and provident funds, tax incentives for employers and employees and tax-free investments, is for the best and it will motivate South Africans to save for their retirement, which will lead to fewer vulnerable households. The big question is whether the alignment of the tax treatment of pension and provident funds, tax incentives for employers and employees and tax-free investments are sufficient to increase the percentage of individuals who can retire comfortably. The fund management issues that the members of retirement funds experience, namely inadequate communication with and from funds, is the thorn in the flesh that prevents the Taxation Laws Amendment Act 25 of 2016 from being a success. The trustees of retirement funds will only be fulfilling their fiduciary duties as delineated in article 7 of the Pension Fund Act 24 of 1956, if they protect the interests of the members of retirement funds by ensuring that adequate and suitable information on members’ rights, benefits and duties in terms of the rules of the funds are communicated to the members and the beneficiaries. Even though the Council on Financial Services has sent out numerous Pension Fund Circulars that specifically deal with communication requirements, these circulars are not law and they cannot be enforced. If a member of a pension fund does not receive adequate information from his or her fund, the person’s only remedy is to lay a complaint with the Office of the Pension Funds Adjudicator. A discussion of several rulings of the Office of the Pension Funds Adjudicator makes it clear that funds are only given a slap on the wrist if they fail to provide their members with benefit statements. The study makes several recommendations about how the Council of Financial Services and the Office of the Pension Funds Adjudicator can go about ensuring a better communication system or structure between retirement funds and its members. If retirement funds inform their members properly on the value of their benefits and how their retirement funds or lump sum are calculated and taxed, they will be informed about what their benefits are at any point and how much they still need to save to retire independently. Members will be able to do proper retirement planning, a right to which all hard-working South Africans are certainly entitled Masters

This study primarily examines the prevailing social security schemes in Nepal and tries to explore needs and challenges ahead. In Nepal, government initiation for providing social security services was made back in 1930s. Before the installation of multiparty democratic system in 1990, there were only two schemes, namely Employees Provident Fund and Pension covering only government sector employees. Having trifling importance until early 1990s, EPF made significant progress thereafter. It extended coverage to private sector employee and fringed additional schemes that enlarged members' choices and privileges.However, despite the dominant scheme of social security, its coverage is stringently limited and can hardly cover large portion of lower-income people even in near future. Pension scheme operates as a non-contributory plan for employees in government sector and selected institutions. Citizen Investment Trust, a voluntary saving scheme introduced in early 1990s, primarily aims to contribute capital market development by encouraging individuals to mobilize saving in tax-exempted manner. Recently introduced Allowance scheme pays elderly and incapables with small sums of cash benefit. In aggregate, government employees and elderly people are in the center of existing arrangement while integration is lacking among the schemes. Further, notwithstanding the poverty-ridden societies and widening income disparity in Nepal, there is no considerable provision for risk pooling and income redistribution. Similarly, efforts are lacking to bring health services into social security ambit. In effect, existing structure favors those who are relatively in better-off situation. Notably, notwithstanding the noteworthy expansion in recent years, large part of the population remains beyond social security coverage and the system is still in its infancy. Prevailing circumstances of limited coverage, fading out of traditional measures, widening risks and increasing public consciousness on social security have jointly necessitated for the expansion of social security services in the country. Finally, having poor financing capacity of both government and the public, government commitment and the public eagerness to join the system are important for universalizing the coverage in Nepal.

This report provides an initial stocktaking of the characteristics, environment and performance of public and private pensions and elderly assistance programs in Sub-Saharan Africa. It identifies key challenges and suggests reform options for consideration. Considerations for future work and principles for pension policies are also suggested. Two major challenges noted in the report are the need to increase coverage of the labor force by pensions and social insurance schemes, and to increase the proportion of poor elderly covered by social assistance. The report suggests that improving coverage will require a number of parametric reforms to existing contributory schemes, strengthening institutions to serve informal sector workers, and piloting new design options. The report also proposes other parametric reforms, including the harmonization or merger of civil service and national pension schemes. Finally, the report recommends principles to consider for reform, including measures to improve coverage, protect the elderly poor, and better align pension design with needs and enabling conditions, including the needs of rural and informal sector workers.

This study provides a framework for comparison and benchmarking of administrative expenditures of public and private social security programs. The paper presents the genesis of the inquiries into the subject, reviewing some of the most relevant literature on administrative expenditures and the costs of mandatory programs produced over the past two decades. The quantitative analysis builds on the extensive body of literature, but our framework evolved considerably from earlier studies. Our dataset includes over 100 observations and a broad set of explanatory variables. The authors developed and compared a number of standardized cost indices discussing their advantages and limitations. The author also discusses major cost components and their shares in total program costs. The analysis explains over 90 percent of variation in administrative expenditures. It confirms some of the hypotheses expressed in the earlier studies and presents new evidence of driving factors for costs. The author developed three different specifications for statistical analysis. The first set looks at the impact of design of a program on total costs. The second group of specifications assesses differences in costs of managing pension liabilities between the public and private mandatory pension schemes. Finally, on the basis of the third model the author generate benchmarks for staffing levels and for the total administrative expenditures. The author compares those to the actual indicators and develops standard performance ratios, providing insights into design variations and performance of the programs. The author concludes with a discussion of data limitations and implications of our findings.

This report commences the review and documentation of the New Ireland Old Age and Disability Social Pension. The review has focused on the design and operation of the scheme, including the payment modality, and the effectiveness of coverage of both the old age pension and disability components. The economic and social impact of the pension on recipients’ wellbeing, the wellbeing of their households and their communities has not been reviewed in detail, although limited qualitative research through focus group discussions has been undertaken as part of the review. The second objective of the report has been to draw key lessons from the New Ireland experience with the implementation of the social pension, which may inform the implementation of the national social pension.

This policy note examines Thailand's programs for preventing poverty among the elderly, and suggests options for improving the effectiveness of these programs. The number of elderly people in Thailand will increase dramatically over the next 30 years, and the elderly already have a higher poverty rate than the population as a whole. Although Thailand currently has a total of eight pension programs, the majority of the benefits go to those who are not poor. In addition, unlike most countries, Thailand lacks a pension and provident fund supervision agency or a consolidated financial institution regulator, and does not appear to have a well-articulated national pension policy. This has led to the development of two major sets of pension programs, with one group sponsored by the ministry of labor and the social security office, and the other by the ministry of finance and the securities commission. These are also supplemented by an assortment of social assistance and community programs sponsored by the ministry of social development and human security and the ministry of interior. This policy note will examine the above issues in more detail and recommend policy options to simplify and coordinate the various pension and social assistance programs aimed at preventing poverty among the elderly, target more spending at the elderly poor, and assure long-term fiscal sustainability.

The Malaysian economy decelerated as solid domestic demand was not sufficient to offset a weakening external environment. Private consumption growth continued at a healthy pace. Favorable rubber and palm oil prices drove up incomes of smallholders while continued employment and wage growth supported urban incomes. In contrast, fixed investment was more volatile, with private investment showing signs of picking up while public investments lagged. Malaysia's overall balance of payments recorded a larger surplus in the first half of the year reflecting a widening current account surplus and substantial net financial inflows. Malaysia's open economy is expected to slow further in the remainder of 2011 and into early 2012 mainly due to the deterioration in the outlook for external demand. Cities are central to Malaysia's aspiration to become a high-income economy. Smart cities are skilled and innovative. They play a crucial role in catalyzing economic growth by generating productivity gains through agglomeration economies. Smart cities are green and sustainable. They ensure a high quality of life to all citizens and the sustainability of economic gains. Finally, smart cities are resilient.

The view that policies directed at the real exchange rate can have an important effect on economic growth has been gaining adherents in recent years. Unlike the traditional 'misalignment' view that temporary departures of the real exchange rate from its equilibrium level harm growth by distorting a key relative price in the economy, the recent literature stresses the growth effects of the equilibrium real exchange rate itself, with the claim being that a depreciated equilibrium real exchange rate promotes economic growth. While there is no consensus on the precise channels through which this effect is generated, an increasingly common view in policy circles points to saving as the channel of transmission, with the claim that a depreciated real exchange rate raises the domestic saving rate which in turn stimulates growth by increasing the rate of capital accumulation. This paper offers a preliminary exploration of this claim. Drawing from standard analytical models, stylized facts on saving and real exchange rates, and existing empirical research on saving determinants, the paper assesses the link between the real exchange rate and saving. Overall, the conclusion is that saving is unlikely to provide the mechanism through which the real exchange rate affects growth.

Cross country data on public and private pension schemes are presented and explained. Relevant World Bank demographic projections and other indicators previously reported in ‘averting the old age crisis is updated. Relationships between key indicators are highlighted. Many of the data are available as retrievable spreadsheets in the World Bank’s Social Protection Web-site at http://www.worldbank.org/pensions.