EUROPE – The World Bank, the Organisation for Economic Cooperation and Development (OECD) and Dutch bank ING have launched a research partnership to study the world’s private pension system.
The agreement – cemented at the World Bank in Washington today – will see the group examining the efficiency of funded pension schemes in developing and some developed economies.
According to a press release, the researchers will also seek to understand differences between the countries’ pension experiences.
“When you consider that trillions of dollars are now managed by the private pensions industry, it’s extremely important to know how well they have performed in providing high rates of return, secure and reliable benefits and constraining costs,” said Robert Holzmann, the World Bank’s social protection director.
“These continue to be among the most hotly debated pension policy questions in virtually all countries worldwide.”
Earlier this year the World Bank appeared to bow to criticism of the so-called World Bank pension model by put ting forward a new five-pillar framework.
The bank’s model was outlined more than a decade ago in ‘Averting the Old Age Crisis’ and has been used as a framework in many developing countries. It introduced the three-pillar model and the concept of mandatory individual funded savings.
The last 20 years have seen numerous funds gravitating towards privatisation, said the groups said today. While there is a consensus that privately funded schemes are important, the structure and organisation of such funds is still a hotbed of contention.
According to Holzmann, “This new research group marshals the knowledge and experience of major international policy and research institutions with the practical expertise and resources of the private sector, to provide a thorough examination of just how well these new systems have performed.”
ING’s global head of pensions, Jan Nijssen, believes financial institutions have a “strong interest” in supporting this research project.
“It amplifies our belief that caring for people and their communities can go hand in hand with long-term sustainable development,” he said.
“The collection of data on performance indicators and their analysis are key to the assessment of the adequacy of private pension systems and the development of related policy tools by governments around the world,” he added.