Collaboration will produce internationally comparable indicators of pension systems to promote effective policy making
Millions of workers in Latin America and the Caribbean run the risk of poverty during their retirement years unless countries reform their pension systems according to experts from the Inter-American Development Bank (IDB). Many workers are not covered by formal pension arrangements at all, while others contribute for only short periods. At the same time, demographic change – fewer babies and longer lives – is driving an increase in the share of older people in the population.
The IDB is partnering with the Organization for Economic Co-operation and Development (OECD) and the World Bank to help policy-makers tackle this challenge and design and implement effective retirement-income policies. The project, Pensions at a Glance: Latin America and the Caribbean, will compare pension systems in the region using an OECD methodology. The most recent edition of the OECD’s report – Pensions at a Glance: Retirement-income Systems in OECD and G20 Countries – looked at pension provision in 43 economies around the world and was published in March 2011.
Pensions at a Glance: Latin America and the Caribbean will be the first analysis of its kind in the region, providing a wide range of indicators for comparing pension policies and their outcomes among all of the IDB’s 26 member countries in Latin America and the Caribbean. “We are very excited to be partnering with the OECD and the World Bank in this endeavor,” said Kei Kawabata, Manager of the IDB’s Social Sector Department. “Because many countries are thinking about reforming their pension systems, there is an urgent need for this work. The information generated will help to diagnose problems with current pension programs.”
Pension systems typically involve detailed and complex rules, so comparing them between countries is difficult. Nevertheless, policy-makers can learn important lessons from the experience of other countries in the design of pension systems and the implementation of pension reforms. The new report will provide reliable and comparable, cross-country information on the value of pension entitlements for workers at different levels of earnings and with different career paths. “Latin America is an important partner for the OECD, beyond Chile and Mexico that are members of the organization,” said Monika Queisser, the OECD’s Head of Social Policy. “The extension of the pension models to Latin America and the Caribbean will be an important step in strengthening a policy dialogue with the region.”
Pensions at a Glance: Latin America and the Caribbean also will include demographic data, detailed descriptions of national pension systems, the percent of workers that are covered, and information on old-age income safety nets that countries have in place.
"This is an excellent example of collaboration between international agencies as well as a unique opportunity to produce internationally comparable indicators of pension system design that will inform policymakers and the public debate as to how best to plan for the future of an aging world," added Robert Palacios, Pensions Team Leader, Human Development Network at the World Bank.
A preliminary analysis will be completed later in 2012 and the final report – including detailed analyses and an assessment of the policy implications of the results – to be published early in 2013.
This project is supported by IDB’s Institutional Strengthening Thematic Fund, funded by a donation from the People’s Republic of China for capacity building and knowledge flows for development effectiveness in the region. It is part of IDB’s regional learning agenda on social security.