Holzmann, Robert

Person:
Holzmann, Robert

Fields of Specialization

Public Finance, Pension Strategy

Last updated February 1, 2023

Biography

Robert Holzmann is elected fellow of Austrian Academy of Sciences and as of September 2019 governor of the Austrian Central Bank. He held academic positions in Austria, Australia, Germany and Malaysia, senior economist positions at OECD and IMF, and senior management positions at the World Bank where he was leading the pension strategy work. He has published 37 books and some 200 articles on financial, fiscal and social policy issues. He has travelled to over 90 countries in the world.

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China's Pension System : A Vision

(Washington, DC: World Bank, 2013-02-27) Dorfman, Mark C. ; Holzmann, Robert ; O'Keefe, Philip ; Wang, Dewen ; Sin, Yvonne ; Hinz, Richard

China is at a critical juncture in its economic transition. A comprehensive reform of its pension and social security systems is an essential element of a strategy aimed toward achieving a harmonious society and sustainable development. Among policy makers, a widely held view is that the approach to pension provision and reform efforts piloted over the last 10-15 years is insufficient to enable China's economy and population to realize its development objectives in the years ahead. This volume suggests a national pension system that no longer distinguishes along urban and rural locational or hukou lines yet takes account of the diverse nature of employment relations and capacity of individuals to make contributions. This volume is organized as follows: the main text outlines this vision, focusing on summarizing the key features of a proposed long-term pension system. It first examines key trends motivating the need for reform then outlines the proposed three-pillar design and the rationale behind the design choices. It then moves on to examine financing options. The text continues by discussing institutional reform issues, and the final section concludes. The six appendixes provide additional analytical detail supporting the findings in the main text. The pension system design can play an important role in supporting or constraining such economic and demographic transitions: 1) fragmentation and lack of portability of rights hinder labor market efficiency and contribute to coverage gaps; 2) multiple schemes for salaried workers, civil servants, and, in some areas, migrants similarly impact labor markets; 3) legacy costs that are largely financed through current pension contributions weaken incentives for compliance and accurate wage reporting; 4) very limited risk pooling and interurban resource transfers limit the insurance function of the urban pension system and create spatial disparities in old-age income protection; 5) low retirement ages affect incentives and benefits and undermine fiscal sustainability; and 6) relatively low returns on individual accounts result in replacement rates significantly less than anticipated while at the macro level, are likely to inhibit wider efforts to stimulate higher domestic consumption.
Pension Reform in Europe : Process and Progress

(Washington, DC: World Bank, 2003) Holzmann, Robert ; Orenstein, Mitchell ; Rutkowski, Michal ; Holzmann, Robert ; Orenstein, Mitchell ; Rutkowski, Michal

Pension reform is an important topic, high on the agendas of most European countries, where countries are profoundly affected by an aging population, the result of lower fertility, and increased life expectancy, changes in family structure, and the effects of globalization. The book presents seven papers on the political economy of European pension reform, where clearly, major reforms are needed, to ensure the sustainability of retirement income systems. However, reform programs will need to combine measures to delay retirement; introduce changes in the benefit structure; and, diversify the sources of retirement income, to better balance individuals' risks. Subjects address the need to accelerate the European pension reform agenda, and compares the making of pension privatization in Latin America with that in Eastern Europe. Furthermore, subjects look at democracy and structural pension reform in continental Europe, focusing on the aging population, the electoral behavior, and early retirement impacts, on the basis of commitment, and consensus - or the lack thereof - to pension reform. Most interestingly, one of the subjects questions, and further analyzes, the wide differences of social policy models among transition economies, to finalize with a look at the diffusion of pension innovation. These subjects provide insight into the process, and progress of European pension reform, to the benefit of the reform agenda in other regions as well.
Nonfinancial Defined Contribution Pension Schemes in a Changing Pension World : Volume 1. Progress, Lessons, and Implementation

(Washington, DC: World Bank, 2012) Holzmann, Robert ; Palmer, Edward ; Robalino, David

Pensions and social insurance programs are an integral part of any social protection system. Their dual objectives are to prevent a sharp decline in income and protect against poverty resulting from old age, disability, or death. The critical role of pensions for protection, prevention, and promotion was reiterated and expanded in the new World Bank 2012-2022 social protection strategy. This new strategy reviews the success and challenges of the past decade or more, during which time the World Bank became a main player in the area of pensions. But more importantly, the strategy takes the three key objectives for pensions under the World Bank's conceptual framework coverage, adequacy, and sustainability and asks how these objectives and the inevitable difficult balance between them can best be achieved. The ongoing focus on closing the coverage gap with social pensions and the new outreach to explore the role of matching contributions to address coverage and/or adequacy is part of this strategy. This comprehensive anthology on nonfinancial defined contribution (NDC) pension schemes is part and parcel of the effort to explore and document the working of this new system or reform option and its ability to balance these three key objectives. This innovative, unfunded individual accounts scheme provides a promising option at a time when the world seems locked into a stalemate between piecemeal reform of ailing traditional defined benefit plans or their replacement with prefunded financial account schemes. The current financial crisis, with its focus on sovereign debt, has enhanced the attraction of NDC as a pension scheme that aims for intra and intergenerational fairness, offers a transparent framework to distribute economic and demographic risks, and, if well designed, promises long-term financial stability. Supplemented with a basic minimum pension guarantee, explicit noncontributory rights, and a funded pillar, the NDC approach provides an efficient framework for addressing poverty and risk diversification concerns.
Demographic Alternatives for Aging Industrial Countries : Increased Total Fertility Rate, Labor Force Participation, or Immigration

(World Bank, Washington, DC, 2005-12) Holzmann, Robert

The paper investigates the demographic alternatives for dealing with the projected population aging and low or negative growth of the population and labor force in the North. Without further immigration, the total labor force in Europe and Russia, the high-income countries of East Asia and the Pacific, China, and, to a lesser extent, North America is projected to be reduced by 29 million by 2025 and by 244 million by 2050. In contrast, the labor force in the South is projected to add some 1.55 billion, predominantly in South and Central Asia and in Sub-Saharan Africa. The demographic policy scenarios to deal with the projected shrinking of the labor forth in the North include moving the total fertility rate back to replacement levels, increasing labor force participation of the existing population through a variety of measures, and filling the demographic gaps through enhanced immigration. The estimations indicate that each of these policy scenarios may partially or even fully compensate for the projected labor force gap by 2050. But a review of the policy measures to make these demographic scenarios happen also suggests that governments may not be able to initiate or accommodate the required change.
Social Protection and Labor at the World Bank, 2000-08

(Washington, DC : World Bank, 2009) Holzmann, Robert

In autumn 2000, the World Bank's board approved the first ever strategy for the new social protection and labor sector, and in January 2001, the sector published the strategy. The subtitle, from safety net to springboard, indicated the World Bank's move toward a broader understanding of poverty reduction and the relationship of risk to poverty. Because risks and access to appropriate risk management instruments matter for poverty reduction and development, the strategy proposed a new conceptual framework - social risk management that will review and reform existing interventions and propose new ones to better assist the vulnerable in addressing the many risks to which they are exposed. After seven years of implementation, it was time to review the strategy and work of the areas of selected core competence: labor market, social insurance (in particular pensions), social safety nets, social funds, disability and development, and risk and vulnerability analysis. The strategic position, its development, and the results by the sector since the launch of its strategy were reviewed and presented to the World Bank's committee on development effectiveness at the end of 2007. The review included a stocktaking of the analytical work and lending operations in each of the six core competence areas. The result of this review and the six stocktaking papers are presented in this publication. They reveal the progress that the World Bank has made in understanding the importance of social risk management for poverty reduction and the critical contribution it makes to equitable and sustainable growth.
Old Age Income Support in the 21st century: An International Perspective on Pension Systems and Reform

(Washington, DC: World Bank, 2005) Holzmann, Robert ; Hinz, Richard ; von Gersdorff, Hermann ; Gill, Indermit ; Impavido, Gregorio ; Musalem, Alberto R. ; Palacios, Robert ; Robolino, David ; Rutkowski, Michal ; Schwarz, Anita ; Sin, Yvonne ; Subbarao, Kalanidhi

The book has a comprehensive introduction and two main parts. Part I presents the conceptual underpinnings for the Bank's thinking on pension systems and reforms, including structure of Bank lending in this area. Part II highlights key design and implementation issues where it signals areas of confidence and areas for further research and experience, and includes a section on regional reform experiences, including Latin American and Europe and Central Asia.
Pension Reform : Issues and Prospects for Non-Financial Defined Contribution Schemes

(Washington, DC: World Bank, 2006) Holzmann, Robert ; Palmer, Edward

The previous decade has been one of pension reform throughout the world. In high income countries, the driving force has been the threat that current systems will become unaffordable in coming decades, with demographic developments presenting a major risk. In another setting, countries in the process of transition from a command, to a market economy are confronted with the challenge of introducing a public pension system that will provide social security in old age, but that also supports the fundamentals of a market economy. In the latter sense, it is important to examine carefully the experiences of developed market economies. Even in these countries, the driving force behind reform is demographic change and affordability. In a third setting, middle and lower-middle income countries are faced with the question of what system will best serve the interests of their specific country goals for the future. In all of these settings "NDC"-non-financial defined contribution-pension schemes have been on the agenda in discussions of possible options. Sweden is one of the few countries to have implemented an NDC scheme in the 1990s, when NDC came into its own as a concept, implemented in four European Union (EU) countries (Italy, Latvia, and Poland are the other three). NDC has become a reform option considered by many countries, understandably since most of Europe has a pay-as-you-go tradition, and NDC constitutes a new way to "organize" a mandatory, universal pay-as-you-go pension system. With some experience of NDC schemes implemented, it is felt particularly relevant for Sweden to host a conference devoted to discussing both the conceptual and institutional aspects of NDC. The goal was even more ambitious, however: to contribute to creating a synthesis of current knowledge on this new topic. This book is the realization of that goal. It comprises discussion papers on the status of NDC, its concept and the reform strategies that follow. Papers also discuss the conceptual issues of design and implementation , lessons from countries with NDC contribution schemes, and finalizes on the potential of NDC contribution schemes in other countries' reforms.
Assessing Benefit Portability for International Migrant Workers: A Review of the Austria-Turkey Bilateral Social Security Agreement

(World Bank, Washington, DC, 2016-05) Holzmann, Robert ; Fuchs, Michael ; Pacaci Elitok, Secil ; Dale, Pamela

The portability of social benefits is gaining importance given the increasing share of individuals working at least a part of their life outside their home country. Bilateral social security agreements (BSSAs) are considered a crucial approach to establishing portability, but the functionality and effectiveness of these agreements have not yet been investigated; thus important guidance for policymakers in migrant-sending and migrant-receiving countries is missing. To shed light on how BSSAs work in practice, this document is part of a series providing information and lessons from studies of portability in four diverse but comparable migration corridors: Austria-Turkey, Germany-Turkey, Belgium-Morocco, and France-Morocco. A summary policy paper draws broader conclusions and offers overarching policy recommendations. This report looks specifically into the working of the Austria-Turkey corridor. Findings suggest that the BSSA between Austria and Turkey is broadly working well, with no main substantive issues in the area of pension portability and few minor substantive issues concerning health care portability and financing. Process issues around information and automation of information exchange are recognized and are beginning to be addressed.
Do Bilateral Social Security Agreements Deliver on the Portability of Pensions and Health Care Benefits?: A Summary Policy Paper on Four Migration Corridors between EU and Non-EU Member States

(World Bank, Washington, DC, 2016-05) Holzmann, Robert

This policy paper summarizes four corridor studies on bilateral social security agreements (BSSAs) between four European Union (EU) member and two non-member states, draws conclusions on their results, and offers recommendations. BSSAs between migrant-sending and migrant-receiving countries are seen as the most important instrument to establish portability of social security benefits for internationally mobile workers. Yet, only about 23 percent of international migrants profit from BSSAs and their functioning has been little analyzed and even less assessed. The four corridors studied (Austria-Turkey, Germany-Turkey, Belgium-Morocco, and France-Morocco) were selected to allow for comparison of both similarities and differences in experiences. The evaluation of these corridors’ BSSAs was undertaken against a methodological framework and three selected criteria: fairness for individuals, fiscal fairness for countries, and bureaucratic effectiveness for countries and migrant workers. The results suggest that the investigated BSSAs work and overall deliver reasonably well on individual fairness. The results on fiscal fairness are clouded by conceptual and empirical gaps. Bureaucratic effectiveness would profit from information and communication technology-based exchanges on both corridors once available.
Assessing Benefit Portability for International Migrant Workers: A Review of the Belgium-Morocco Bilateral Social Security Agreement

(World Bank, Washington, DC, 2016-05) Holzmann, Robert ; Wels, Jacques ; Dale, Pamela

The portability of social benefits is gaining importance given the increasing share of individuals working at least part of their life outside their home country. Bilateral social security agreements (BSSAs) are considered a crucial approach to establishing portability, but the functionality and effectiveness of these agreements have not yet been investigated; thus, important guidance for policy makers in migrant-sending and migrant-receiving countries is missing. To shed light on how BSSAs work in practice, this document is part of a series providing information and lessons from studies of portability in four diverse but comparable migration corridors: Austria-Turkey, Germany-Turkey, Belgium-Morocco, and France-Morocco. A summary policy paper draws broader conclusions and offers overarching policy recommendations. This report looks specifically into the working of the Belgium-Morocco corridor. Findings suggest that the BSSA is broadly working well, with no main substantive issues in the area of pension portability, except for the non-portability of the noncontributory top-up pension and issues with widows’ pensions in case of divorce and repudiation, and in health care, the pending introduction of portable health care for retirees with single pensions from the other country. Process issues around information provision in Morocco and automation of information exchange are recognized.