Fuente : World Bank
http://www.worldbank.org

World Bank: MENA Pension Systems In Dire Need Of Reform

/noticias.info/ The World Bank said pension systems in the Middle East and North Africa (MENA) are under growing financial stress and urgently need reform, reports The Daily Star (Lebanon).

In a report entitled “Pensions in the Middle East & North Africa,” the World Bank called for a series of measures that would allow governments to gradually reform their unsustainable pension systems, and avoid future crises. The report said pension systems in the region face problems in terms of limited coverage, fragmented administration, and system designs that negatively affect incentives and equity.

Agence France Presse notes the World Bank report states only five to ten percent of retirees in the MENA region receive pensions, but that the cost of these pensions is very high. The Bank also says the region covers about 30 percent of its active population. “Despite the region’s limited pension fund coverage, the cost of pension funds represents between one and three percent of GDP, which is high, when one considers the low proportion of elderly people in the entire MENA population,” the report notes.

The Daily Star adds the report suggests that pension systems try to offer too much in terms of benefits. On average, full-career retired workers receive a pension of nearly 80 percent of their earnings before retirement. This is much higher than the pension promised in 24 high-income countries (as well as 10 countries in Eastern Europe and Central Asia and nine countries in Latin America and the Caribbean), where pension represents on average 57 percent of pre-retirement earnings. "Pension crises are often associated with an aging population, which is misleading, the report says. In the MENA region, where 60 percent of the population is made up of young people, pension systems are already facing financial problems," according to Christiaan Poortman, World Bank vice president for the Middle East and North Africa. "So, the problem is structural, not demographic.”

The Kuwait News Agency reports that Poortman added that postponing pension reforms will require dramatic adjustments in the future and it implies transferring the cost of reform to future generations. Although countries such as Iran, Iraq, Tunisia, and Yemen are advancing their policy discussion, the World Bank said that "a coherent strategy has yet to emerge." The report also noted that Djibouti, Egypt, Jordan, Lebanon, Morocco, and the West Bank and Gaza, on the other hand, made strides in pension reform, drafting progressive pension laws or introducing structural reforms. The report also blames unsustainable pension programs on "governance issues that promote risky investment policies."

The Daily Star adds the report urges countries in the early stages of reform, to conduct a proper assessment of the financial problems facing the systems. Without this baseline, it is not possible to initiate discussions about the costs and benefits of alternative reform packages, the Bank said.

Middle East and North Africa Today also reports on the World Bank’s pension report. notas_de_prensa_archivo