Pension SystemsPension Systemsin Central and Eastern Europe:in Central and Eastern Europe:
in times of Crisis, Austerity and Beyondin times of Crisis, Austerity and Beyond
9 March 2011, Ankara9 March 2011, Ankara
Kenichi HiroseKenichi HiroseSenior Specialist in Social SecuritySenior Specialist in Social Security
ILO Decent Work Technical Support TeamILO Decent Work Technical Support Teamfor Central and Eastern Europefor Central and Eastern Europe
Email: [email protected]: [email protected]. .
Objectives of pensionsObjectives of pensions
�� Provide adequate income security for the Provide adequate income security for the elderlyelderly
�� Basic requirementsBasic requirements
�� Sustainable in the long runSustainable in the long run
�� Credible for the commitment of future Credible for the commitment of future generationsgenerations
�� Pension reform addresses these issues Pension reform addresses these issues while ensuring the main objective of the while ensuring the main objective of the retirement income provisionretirement income provision
Recent literature on pension reformRecent literature on pension reform�� World Bank, World Bank, ““Averting the oldAverting the old--age crisisage crisis””, 1994, 1994
�� Beattie, R and McGillivray W, Beattie, R and McGillivray W, ““A risky strategyA risky strategy””, ISSR, 1995, ISSR, 1995
�� Stiglitz, J. E. and Orszag. P.R., Stiglitz, J. E. and Orszag. P.R., ““Rethinking Pension Reform: Ten Rethinking Pension Reform: Ten Myths about Social Security SystemsMyths about Social Security Systems””, 1999 (in H, 1999 (in H--S below)S below)
�� Holzmann, R. and Stiglitz, J. E. (eds.), Holzmann, R. and Stiglitz, J. E. (eds.), ““New ideas about old age New ideas about old age securitysecurity””, 2001, 2001
�� Barr N, Barr N, ““Reforming Pensions: Myths, Truths and Policy ChoicesReforming Pensions: Myths, Truths and Policy Choices””, IMF , IMF Working paper, 2000 (ISSR 2002)Working paper, 2000 (ISSR 2002)
�� Gillion et al., Gillion et al., ““Social Security Pensions: Development and ReformSocial Security Pensions: Development and Reform””, , 2000, ILO/ISSA.2000, ILO/ISSA.
�� ILO, ILO, ““Social security: a new consensusSocial security: a new consensus””, 2001, 2001
�� Holzmann R. and Hinz R. (eds.) Holzmann R. and Hinz R. (eds.) ““Old Age Income Support in the 21st Old Age Income Support in the 21st CenturyCentury””, 2005, 2005
�� Holzmann R. and Palmer E. (eds.), Holzmann R. and Palmer E. (eds.), ““Pension reform: issues and Pension reform: issues and prospects for nonprospects for non--financial defined contribution (NDC) schemesfinancial defined contribution (NDC) schemes””, 2006., 2006.
�� Barr N and Diamond P, Barr N and Diamond P, ““Reforming pensionsReforming pensions””, Nov 2008 , Nov 2008
Trends of Pension Reforms in CEE countries�� Early 1990sEarly 1990s
�� Pension system was used to resolve the unemployment Pension system was used to resolve the unemployment problemproblem
�� Rapid deterioration of the system demographic dependency Rapid deterioration of the system demographic dependency
�� From midFrom mid--1990s to mid1990s to mid--2000s2000s�� Reform adopting a Chilean type mandatory private funded Reform adopting a Chilean type mandatory private funded
pension pillar by scaling down the state pensionpension pillar by scaling down the state pension�� Parametric changes to tighten benefits (longer insurance Parametric changes to tighten benefits (longer insurance
period, higher retirement age, indexation from wage to price) period, higher retirement age, indexation from wage to price)
�� From 2008 to presentFrom 2008 to present�� Global economic crisis affected public and private pensionsGlobal economic crisis affected public and private pensions�� Pressure to cut benefits in the context of fiscal consolidation Pressure to cut benefits in the context of fiscal consolidation
in Europe (especially the countries receiving financial in Europe (especially the countries receiving financial assistance)assistance)
Challenges in the Pension Systems in CEE countries
�� Ensuring adequate pension benefits, retirement age Ensuring adequate pension benefits, retirement age and indexation methodand indexation method
�� NonNon--compliance by undeclared work and evasion by compliance by undeclared work and evasion by underreporting of wagesunderreporting of wages
�� Weak enforcement for contribution collectionsWeak enforcement for contribution collections
�� Heavy financial dependence on the State budgetHeavy financial dependence on the State budget
�� Concerns with longConcerns with long--term sustainability in the ageing term sustainability in the ageing populationpopulation
�� Vulnerable to political interferenceVulnerable to political interference
�� Conflicting interest of key stakeholders Conflicting interest of key stakeholders
Typology of pension schemesTypology of pension schemesSocial Social insurance insurance pensionpension
Basic Basic pensionpension
Private Private pensionpension
Pillar IIPillar II SwedenSweden
(NDC)(NDC)
SwedenSweden
(FDC)(FDC)
DB / DCDB / DC DBDB DBDB DC DC
(or DB)(or DB)
DCDC DCDC DCDC
PAYG / PAYG / PrePre--fundingfunding
PAYGPAYG PAYGPAYG FundingFunding FundingFunding PAYGPAYG FundingFunding
Public / Public / privateprivate
PublicPublic PublicPublic PrivatePrivate PrivatePrivate PublicPublic PublicPublicclearing clearing househouse(PPM)(PPM)
Mandatory Mandatory / voluntary/ voluntary
MandatoryMandatory
EmployedEmployed
MandatoryMandatory
UniversalUniversal
VoluntaryVoluntary MandatoryMandatory MandatoryMandatory MandatoryMandatory
Contribution Contribution / tax/ tax
Cont.Cont. Tax or Tax or cont.cont.
Cont.Cont. Cont.Cont. Cont. + taxCont. + tax Cont.Cont.
Pension privatization in CEE and CIS states
� Countries which introduced mandatory, privately-managed pensions
Hungary, Poland(*), Latvia(*), Bulgaria, Estonia, Croatia, Slovak Republic, Romania, Ukraine
Kazakhstan(**), Russia, Azerbaijan, Kyrgyzstan(*), Tajikistan(*), Turkmenistan(*)
� Countries with PAYG pensions and considering the introduction of mandatory private pensions
Albania, Bosnia and Herzegovina, Lithuania, Moldova, Serbia
Armenia, Belarus, Georgia, Uzbekistan
� Countries with PAYG pensions and no mandatory private pensions(***)
Czech Republic, Slovenia
Notes: (*) NDC, (**) Full privatization, (***) Recent developments
Comparison of Pillar II systems in selected CEE Comparison of Pillar II systems in selected CEE countriescountries
HungaryHungary PolandPoland BulgariaBulgaria CroatiaCroatia Slovak Slovak RepublicRepublic
RomaniaRomania
Year of Year of implementationimplementation
19981998 19991999 20002000 20022002 20052005 20082008
Contribution rateContribution rate
(Total pension cont)(Total pension cont)8%8%
(33.5%)(33.5%)
7.3%7.3%
(19.52%)(19.52%)
5%5%
(23%)(23%)
5%5%
(20%)(20%)
9%9%
(18%)(18%)
2.5%2.5%
(29%)(29%)
Membership of the Membership of the current workers at the current workers at the start of the scheme start of the scheme
>49: stay out>49: stay out
3030--49: option49: option
<30: comp<30: comp
>49: stay out>49: stay out
3030--49: option49: option
<30: comp<30: comp
>=40: stay out>=40: stay out
<40: comp<40: comp
>49: stay out>49: stay out
4040--49: option49: option
<40: comp<40: comp
optionaloptional >44: stay out>44: stay out
3535--44: option44: option
<35: comp<35: comp
Membership of new Membership of new entrantsentrants
compulsorycompulsory compulsorycompulsory compulsorycompulsory compulsorycompulsory optional optional (initially (initially
compulsory)compulsory)
compulsorycompulsory
Number of pension Number of pension funds (2011)funds (2011)
1919 1414 1010 44 66 99
Portfolio optionsPortfolio options 33 11 11 11 33 11
Central administrationCentral administration RenationalRenationalizationization
Annuity Annuity paymentpayment
Central Central registryregistry
Questions on the multi-pillar pension reforms
�� Are the objectives of the multiAre the objectives of the multi--pillar reform appropriate?pillar reform appropriate?�� Primary goals: Protection against poverty in oldPrimary goals: Protection against poverty in old--ageage�� Secondary goals: Bolster economic growth through increased savinSecondary goals: Bolster economic growth through increased savingsgs
�� Did countries meet initial conditions on macroeconomic stabilityDid countries meet initial conditions on macroeconomic stability , financial , financial market readiness, moderate indebtedness, and a low risk for corrmarket readiness, moderate indebtedness, and a low risk for corr uption?uption?�� Many countries had poor records at the time of reform.Many countries had poor records at the time of reform.
�� Have the reform considered options to expand the coverage to thoHave the reform considered options to expand the coverage to those outside se outside the formal pension system? the formal pension system?
�� Have multiHave multi--pillar reforms achieved the intended macroeconomic impact pillar reforms achieved the intended macroeconomic impact such as risk diversification in investment portfolio, increased such as risk diversification in investment portfolio, increased savings, savings, capital markets development, better labour market incentives?capital markets development, better labour market incentives?�� These objectives remain largely unrealized.These objectives remain largely unrealized.�� Fiscal deficits have grown in many countries.Fiscal deficits have grown in many countries.
�� Misleading terminologiesMisleading terminologies�� ““ Parametric reformsParametric reforms”” versus versus ““ paradigmatic reformsparadigmatic reforms””�� ““ SingleSingle--pillarpillar ”” versus versus ““ multimulti --pillarpillar ”” reformsreforms
Problems with “Pillar II” system
�� Unpredictability of the future benefit level facing the volatileUnpredictability of the future benefit level facing the volatilefinancial market riskfinancial market risk
�� Limited redistribution results in more inequality (e.g. gender Limited redistribution results in more inequality (e.g. gender inequality)inequality)
�� Not enough attention is given to the payment phase, in Not enough attention is given to the payment phase, in particular the private market provision of life annuities and particular the private market provision of life annuities and full indexation of benefits full indexation of benefits
�� High administrative costs by private funds High administrative costs by private funds
�� Transitional costs: The Transitional costs: The ““ gapgap”” in the financing of the Pillar I in the financing of the Pillar I system created by diverting part of the contributions to the system created by diverting part of the contributions to the new Pillar II systemnew Pillar II system
�� Transition cost will increase government spending Transition cost will increase government spending (borrowing) in short(borrowing) in short-- to mediumto medium--term.term.
Donor dependence: CEE and CISCountries with mandatory funded pillarsCountries with mandatory funded pillars Countries with PAYG pensions Countries with PAYG pensions
CountryCountry Amount of loans in Amount of loans in $ million$ million
CountryCountry Amount of loans in Amount of loans in $ million$ million
KazakhstanKazakhstan 323.8323.8 TurkeyTurkey 197.7197.7
RussiaRussia 287.8287.8 Bosnia and HerzegovinaBosnia and Herzegovina 43.543.5
UkraineUkraine 147.0147.0 MoldovaMoldova 37.837.8
HungaryHungary 124.1124.1 Kyrgyz RepublicKyrgyz Republic 33.933.9
RomaniaRomania 58.758.7 SerbiaSerbia 25.225.2
CroatiaCroatia 52.152.1 GeorgiaGeorgia 14.714.7
BulgariaBulgaria 47.347.3 UzbekistanUzbekistan 10.010.0
LithuaniaLithuania 26.526.5 ArmeniaArmenia 8.98.9
FYR MacedoniaFYR Macedonia 26.226.2 SloveniaSlovenia 7.77.7
Slovak RepublicSlovak Republic 25.425.4 AlbaniaAlbania 7.17.1
Latvia Latvia 20.920.9 AzerbaijanAzerbaijan 5.95.9
PolandPoland 2.62.6 TajikistanTajikistan 2.92.9
TurkmenistanTurkmenistan 0.60.6
TotalTotal 1,115.81,115.8 TotalTotal 422.3422.3
Source: Independent Evaluation Group – World bank, “Pension Reform and the Development of Pension Systems: An Evaluation of World Bank Assistance”, 2006
Direct impact of the crisis on pension systems: some lessons learned
�� The crisis affected different categories of pension schemes in The crisis affected different categories of pension schemes in different ways. One lesson learned is the sensitivity of pensiondifferent ways. One lesson learned is the sensitivity of pensionlevels in fullylevels in fully--funded definedfunded defined--contribution schemes with respect contribution schemes with respect to the financial market volatility and the way its consequences to the financial market volatility and the way its consequences had to be borne by workers. had to be borne by workers.
�� In definedIn defined--benefit paybenefit pay--asas--youyou--go pension systems, the go pension systems, the immediate impact will be less severe than in fullyimmediate impact will be less severe than in fully--funded funded pension systems (private pension funds in OECD countries lost pension systems (private pension funds in OECD countries lost 23% of assets in 2008). However, long23% of assets in 2008). However, long--term contraction of term contraction of employment will also affect the payemployment will also affect the pay--asas--youyou--go pension system. go pension system.
�� The crisis hit different generations. The most affected are The crisis hit different generations. The most affected are workers who are close to retirement, those with long periods of workers who are close to retirement, those with long periods of membership in the funded pension schemes, and in particular membership in the funded pension schemes, and in particular those whose investment portfolio is exposed to riskier assets those whose investment portfolio is exposed to riskier assets such as stocks. Those pensioners in private pension plans who such as stocks. Those pensioners in private pension plans who did not take annuities upon retirement were also seriously did not take annuities upon retirement were also seriously affected. affected.
Indirect impact of the crisis on pension systems
�� The crisis is seen as a justification for imposing fiscal The crisis is seen as a justification for imposing fiscal austerity in particular for countries receiving austerity in particular for countries receiving emergency financial assistance from IMF and EU (e.g. emergency financial assistance from IMF and EU (e.g. Greece, Hungary, Latvia, Romania, Ukraine)Greece, Hungary, Latvia, Romania, Ukraine)
�� Pension system was particularly vulnerable due to its Pension system was particularly vulnerable due to its large dependence on government budget to cover the large dependence on government budget to cover the deficit (partly caused by transition costs associated deficit (partly caused by transition costs associated with Pillar II system) with Pillar II system)
�� Severe cuts in pension rights motivated by reducing Severe cuts in pension rights motivated by reducing government deficits caused serious social uprisings government deficits caused serious social uprisings (e.g. France, Greece, Spain) (e.g. France, Greece, Spain)
Government debts and deficits in EU 27 countries, 2009
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0-20.0
-15.0
-10.0
-5.0
0.0
5.0
Est
on
ia
Lu
xe
mb
ou
rg
Bu
lga
ria
Ro
ma
nia
Lit
hu
an
ia
Cze
ch
Re
pu
bli
c
Slo
ve
nia
Slo
va
kia
Latv
ia
De
nm
ark
Sw
ed
en
Fin
lan
d
Po
lan
d
Sp
ain
Cyp
rus
Ne
the
rla
nd
s
Ire
lan
d
Au
stri
a
Un
ite
d K
ing
do
m
Ma
lta
Ge
rma
ny
Po
rtu
ga
l
Fra
nc
e
Hu
ng
ary
Be
lgiu
m
Ita
ly
Gre
ece
Deficit/GDP in % Debt/GDP in %
Debt 2009 Deficit 2008 Deficit 2009
Ratio of pension contributions to the expenditure, 2007-09
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
Slovak
Republic
Croatia Bulgaria Slovenia Poland Hungary Czech
Republic
2007
2008
2009
National responses in 2009-2011: convergence or divergence
�� HungaryHungary�� Increase in retirement age from 62 to 65 years by 2020Increase in retirement age from 62 to 65 years by 2020�� Indexation dependent on GDP growthIndexation dependent on GDP growth�� ReRe--nationalization of mandatory private pension fundsnationalization of mandatory private pension funds
�� BulgariaBulgaria�� Increase in contribution rate by 1.8 %Increase in contribution rate by 1.8 %--pointspoints�� Increase in insurance years 37/34 to 40/37 yearsIncrease in insurance years 37/34 to 40/37 years�� Increase in retirement age from 63/60 to 65/63 years from 2021 tIncrease in retirement age from 63/60 to 65/63 years from 2021 to o
20262026�� RomaniaRomania
�� Continuous increase in womenContinuous increase in women’’ s retirement age from 60 to 63 years by s retirement age from 60 to 63 years by 20302030
�� Gradual shift to price indexation Gradual shift to price indexation �� CroatiaCroatia
�� Increase in womenIncrease in women’’ s retirement age from 60 to 65 years by 2030s retirement age from 60 to 65 years by 2030�� Czech Republic (proposal)Czech Republic (proposal)
�� Decrease in contribution rate by 5 %Decrease in contribution rate by 5 %--pointspoints�� Introduction of mandatory private funded pensionsIntroduction of mandatory private funded pensions
Normal retirement age and life expectancy
Country Year Normal retirement age (NRA) (years)
Life expectancy at NRA (years)
Men Women Men Women
Germany 2010 65 65 17.0 20.7
2030 67 (by 2029) 67 (by 2029) 16.1 20.1
United Kingdom 2010 65 60 17.0 24.5
2020 65 65 (by 2020) 17.7 21.2
Bulgaria 2010 63 60 14.4 21.0
2030 65 (by 2024) 63 (by 2026) 14.3 20.7
Croatia 2010 65 60 14.8 22.7
2030 65 65 (by 2030) 16.5 20.6
Czech Republic 2009 62 60 16.1 21.8
2030 65 (by 2030) 65 (by 2030) 16.3 20.6
Hungary 2010 62 62 14.5 19.9
2020 65 (by 2018) 65 (by 2020) 14.0 19.4
Romania 2011 64 59 13.9 21.7
2015 65 60 13.5 21.4
2030 65 63 (by 2030) 14.4 20.5
Poland 2010 65 60 14.4 23.1
�� In a narrow sense, the system is financially In a narrow sense, the system is financially sustainable ifsustainable if
�� The size of pensions transfer in terms of output The size of pensions transfer in terms of output (pension(pension--toto--GDP ratio) does not diverge GDP ratio) does not diverge
�� The longThe long--term actuarial pension liabilities are term actuarial pension liabilities are adequately met by the expected contributions adequately met by the expected contributions and the reserves (longand the reserves (long--term solvency) term solvency)
�� Since a public pension system relies on the Since a public pension system relies on the intergenerational transfer, its sustainability intergenerational transfer, its sustainability critically depends on whether the working critically depends on whether the working generation is committed to pay contributions for generation is committed to pay contributions for the elderly generation.the elderly generation.
What is the sustainability of a pension system?
Dynamics of Pension-to-GDP ratio
The following formula holds:
∆(P/Y) = (N – D)/Y + (i – g) P/YwhereY : Output (or total payroll)P : Pensions paymentN : Pensions for the newly retiredD : Pensions for the deceased retiredg : Rate of growth of output (or total payroll)i : Rate of indexation of pensions
Hence, the condition for non-increasing P/Y is
∆(P/Y) ≤ 0 ⇔⇔⇔⇔ (N – D)/P ≤ g – i
Tensions related to pension reforms
�� Initial conditionInitial condition�� Demographic pressureDemographic pressure�� SocioSocio--economic changeseconomic changes�� Competitiveness pressureCompetitiveness pressure�� Political inertia (protecting vested rights)Political inertia (protecting vested rights)�� Political interference (populist measures related to Political interference (populist measures related to
election)election)�� Loopholes (nonLoopholes (non--declaration, evasion) with weak declaration, evasion) with weak
controlcontrol�� Behavioural factors (financial literacy)Behavioural factors (financial literacy)�� Erosion of trust by the public, in particular by Erosion of trust by the public, in particular by
young generationsyoung generations�� Pressure from interest groupsPressure from interest groups�� SupraSupra--national pressure (EU, IMF)national pressure (EU, IMF)
Issues in future directions of pension reform(1) Sustainability and adequacy
�� The basic objective of pension reform is to make the system sustThe basic objective of pension reform is to make the system sustainable in ainable in the long run and credible for future generations, while ensuringthe long run and credible for future generations, while ensuringits main its main function of providing adequate income security for the elderly, function of providing adequate income security for the elderly, disabled disabled and survivors. and survivors.
�� The pension systems in CEE countries are facing an imminent chalThe pension systems in CEE countries are facing an imminent challenge of lenge of improving their financial stability and a longimproving their financial stability and a long--term concern with term concern with sustainability in the face of the anticipated demographic changesustainability in the face of the anticipated demographic change. .
�� The future pension reform will naturally address the sustainabilThe future pension reform will naturally address the sustainability problem ity problem through modifications of key scheme parameters such as the benefthrough modifications of key scheme parameters such as the benefit level, it level, retirement age, pension indexation and contribution rates. Howevretirement age, pension indexation and contribution rates. However, in er, in view of the dominant role of the pension system in poverty reducview of the dominant role of the pension system in poverty reduction for tion for the elderly, attention should also be paid on how to ensure the the elderly, attention should also be paid on how to ensure the adequate adequate benefit level under the financial constraint. benefit level under the financial constraint.
�� In this regard, the ILO Social Security Minimum Standards ConvenIn this regard, the ILO Social Security Minimum Standards Convention tion No. 102 which many European countries have already ratified, as No. 102 which many European countries have already ratified, as well as well as the Social Protection Floor initiative which was recently endorsthe Social Protection Floor initiative which was recently endorsed by the ed by the ILO, will provide guideline for developing a mechanism to safeguILO, will provide guideline for developing a mechanism to safeguard the ard the adequacy of the pensions. adequacy of the pensions.
Issues in future directions of pension reform (2) Extension of coverage by improved compliance
�� Extending the coverage of pension system through improved law Extending the coverage of pension system through improved law compliance and efficient contribution collections is crucial nocompliance and efficient contribution collections is crucial not only from a t only from a point of view of ensuring workerspoint of view of ensuring workers’’ basic right, but also from a point of basic right, but also from a point of view of creation of fiscal space necessary for sustaining the syview of creation of fiscal space necessary for sustaining the system in the stem in the long run.long run.
�� Further extension of coverage of the currently nonFurther extension of coverage of the currently non--covered workers, covered workers, coupled with the improved law compliance through tacking the procoupled with the improved law compliance through tacking the problems blems of informal work, would result in more contributors, which wouldof informal work, would result in more contributors, which wouldmitigate mitigate the upward pressure of the demographic dependency of the pensionthe upward pressure of the demographic dependency of the pensionsystem. In addition, enhanced enforcement of contribution collecsystem. In addition, enhanced enforcement of contribution collections tions through effective inspection and fraud control would contribute through effective inspection and fraud control would contribute to the to the extension of the tax base.extension of the tax base.
�� All these will contribute to the increase in the revenue to the All these will contribute to the increase in the revenue to the social security social security fund in the short run, and more importantly, to the reduction infund in the short run, and more importantly, to the reduction inthe long run the long run the need for social assistance for the poor and low income elderthe need for social assistance for the poor and low income elderly ly population who do not receive pension due to nonpopulation who do not receive pension due to non--coverage.coverage.
Issues in future directions of pension reform (3) Process of pension reform
�� The policy making process is an important aspect of pension refoThe policy making process is an important aspect of pension reform. Since rm. Since the reform inevitably affects the conflicting interests of tripathe reform inevitably affects the conflicting interests of tripartite rtite stakeholders, it is important that the reform process should seestakeholders, it is important that the reform process should seek to build a k to build a national consensus on a package of measures acceptable to all national consensus on a package of measures acceptable to all stakeholders.stakeholders.
�� Tripartite and social dialogue is of fundamental importance in tTripartite and social dialogue is of fundamental importance in the policy he policy making process. However, in practice one often faces the situatimaking process. However, in practice one often faces the situation in on in which the process is hampered with the conflict of interest betwwhich the process is hampered with the conflict of interest between een tripartite stakeholders and other pressure groups. In order to ftripartite stakeholders and other pressure groups. In order to find a solution ind a solution for balanced reform package, key stakeholders should exhibit wilfor balanced reform package, key stakeholders should exhibit willingness lingness to make a pragmatic compromise, rather than protecting vested rito make a pragmatic compromise, rather than protecting vested rights or ghts or persisting to the competitiveness argument. The proposed reform persisting to the competitiveness argument. The proposed reform should be should be supported by the future contributing generations. supported by the future contributing generations.
�� Implementation of pension reform measures requires a sufficientlImplementation of pension reform measures requires a sufficiently long y long transition period to avoid abrupt changes in the life plans of wtransition period to avoid abrupt changes in the life plans of workers close orkers close to retirement. In addition, the demographic dependency is projecto retirement. In addition, the demographic dependency is projected to ted to worsen from around 2020. Therefore, it is crucial that policy maworsen from around 2020. Therefore, it is crucial that policy makers kers should take proactive steps to implement the reform measures to should take proactive steps to implement the reform measures to ensure the ensure the longlong--term viability of the system. term viability of the system.
Thank you for your attention
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