Findings
The evaluation found that: |
 | The outcomes of 87% of projects with pension components, and 75% of the components, were rated satisfactory. Studies of longer-term impact found that outcomes varied widely across countries, depending on the depth of analyses, initial conditions, institutional capacity, and political commitment. |
| Bank involvement was often prompted by concerns about fiscal sustainability, but the effort to address funding gaps frequently led to the neglect of the primary goal of pension systems: to reduce poverty and provide adequate retirement income within a fiscal constraint. |
| The breadth of Bank pension research is impressive, but often lacked the analytic depth to support project preparation. Analysis of the living conditions of the aged was generally perfunctory and there has been little investigation of the limits of formal pension coverage or ways to increase it. |
| Bank reforms often contributed to fiscal sustainability, but in many countries with multi-pillar systems, pension funds are poorly diversified and coverage has not increased. Secondary objectives of funded pillars—to increase savings, develop capital markets, and improve labor flexibility—remain largely unrealized. |
| | Absent the initial conditions for multi-pillar systems, the Bank generally supported PAYG reforms, but sometimes supported multi-pillar reforms in spite of clear weaknesses in the country’s underlying economic and financial structures. |
Summary of Recommendations
In its future assistance for Pension Reform, IEG recommends that the World Bank: |
| Develop and implement pension reform guidelines to ensure that assistance is tailored to country conditions, focus on ensuring that the minimum initial conditions are in place for multi-pillar reform, and be more realistic in presenting the potential benefits of the secondary objectives of reform to client countries. |
| Develop a checklist for client capacity requirements and provide increased technical assistance to ensure that there is adequate client capacity to implement reforms. |
| Conduct additional research on key issues such as income of the aged, the impact of corruption and governance on the feasibility of pension regulation, methods to foster competition among funds, ways to stimulate capital market development, and the like. |
| Improve internal and external coordination to ensure adequate attention to cross-sectoral issues and to foster consensus-building among stakeholders. |
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