Documents Altiparmakov, Nikola 4 results

"This article offers a critical analysis of the methods by means of which data relating to the performance of second pillar pension schemes are collated, compared and reported. This is done with regard to the performance of mandatory private second pillar pension funds in Eastern Europe. By critically examining data published in a number of World Bank studies, and through the identification of data problems and irregularities, the article argues that a much more elaborate and transparent approach to the collation, comparative analysis and reporting of data is needed. Required is the establishment of a consensus regarding what should represent a robust basis for making credible policy recommendations, not least with regard to pension re-reforms in the countries of Eastern Europe and elsewhere. In the absence of such a consensus, unresolved data problems and irregularities may potentially continue to influence the formulation of incomplete national policy conclusions regarding the performance of second pillar pension funds and, in turn, the ability of policy-makers to evaluate appropriately the need for, and assess the feasibility of implementing in a sustainable manner, pension re-reform."

"The article explores the initial macro-financial performance of partial pension system “privatizations”— involving privately-managed individual retirement savings accounts (IRAs) — undertaken in many emerging European countries. Using empirical data for a period of close to a decade, the evidence shows that returns on privately-managed IRAs have been below the implicit rate of return of public pay-as-you-go (PAYG) systems. High operating costs and undeveloped capital markets are identified as major contributing factors to the failure of privately-managed IRAs to meet reform expectations. In light of empirical evidence, Serbia is advised to focus on parametric PAYG reforms and to avoid reforms that involve the partial “privatization” of the pension system."

"Serbia is one of the rare eastern European countries that decisively dismissed the controversial pension privatisation agenda whereby mandatory private pension funds would be introduced to (partially) replace existing public pay-as-you-go (PAYG) benefits. Instead, Serbia opted for a more traditional western European approach, combining PAYG cost-containment parametric reforms with the introduction of tax-preferred supplementary private pensions. We explain that the desire for equitable intergenerational burden-sharing was one of the key factors behind the decision-making process that made Serbia diverge from regional trends and World Bank orthodoxy. Nonetheless, problems that have plagued mandatory private funds in neighbouring countries, such as excessive operating costs and undiversified portfolios, have also been prevalent in the Serbian voluntary private pension fund industry, which failed to achieve tangible labour market coverage and whose survival has been due mostly to exclusive tax privileges. "

" In order for ‘carve-out' pension privatization to improve long-term sustainability, the transition should not be predominantly debt financed, and private pension funds should deliver (net) rates of return tangibly higher than gross domestic product (GDP) growth. We show that none of the reforming countries in Eastern Europe was successful in fulfilling these two preconditions, even before the emergence of the global financial crisis. While existing literature mostly describes a recent wave of reform reversals as politically driven short-sighted policies that deteriorate long-term sustainability, we argue the contrary: that pension privatization structural deficiencies and disappointing performance allow reversals to improve the short-term stance without necessarily undermining long-term pension sustainability. We conclude that unless political consensus exists to support the multi-decade fiscal austerity required to finance pension privatization, reform adjustments and reversals can be a rational alternative to maintaining economically suboptimal or politically unstable pension systems in some Eastern European countries."