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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Now showing 1 - 8 of 8

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.
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.
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.
NDC Schemes and Heterogeneity in Longevity: Proposals for Redesign

(World Bank, Washington, DC, 2019-04) Holzmann, Robert ; Alonso-García, Jennifer ; Labit-Hardy, Heloise ; Villegas, Andrés M.

A positive relationship between lifetime income and life expectancy leads to a redistribution mechanism when the average cohort life expectancy is applied for annuity calculation. Such a distortion puts into doubt the main features of the NDC (nonfinancial defined contribution) scheme and calls for alternative designs to compensate for the heterogeneity. This paper explores five key mechanisms of compensation: individualized annuities; individualized contribution rates; a two-tier contribution structure with socialized and individual rates; and two supplementary two-tier approaches to deal with the income distribution tails. Using unique American and British data, the analysis indicates that both individualized annuities and two-tier contribution schemes are feasible and effective and thus promising policy options. A de-pooling by gender will be required, however.
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.
Portability of Pension, Health, and Other Social Benefits: Facts, Concepts, Issues

(World Bank, Washington, DC, 2011-05) Holzmann, Robert ; Koettl, Johannes

Portability of social benefits across professions and countries is an increasing concern for individuals and policy makers. Lacking or incomplete transfers of acquired social rights are feared to negatively impact individual labor market decisions as well as capacity to address social risks with consequences for economic and social outcomes. The paper gives a fresh and provocative look on the international perspective of the topic that has so far been dominated by social policy lawyers working within the framework of bilateral agreements; the input by economists has been very limited. It offers an analytical framework for portability analysis that suggests separating the risk pooling, (implicit or actual) pre-funding and redistributive elements in the benefit design and explores the proposed alternative approach for pensions and health care benefits. This promising approach may serve both as a substitute and complement to bi- and multilateral agreements.
Closing the Coverage Gap : The Role of Social Pensions and Other Retirement Income Transfers

(World Bank, 2009) Holzmann, Robert ; Robalino, David A. ; Takayama, Noriyuki

The book has four specific objectives: (a) to discuss the role of retirement income transfers in the context of a strategy for expanding old- age income security and preventing poverty among the elderly; (b) to take stock of international experience with the design and implementation of these programs; (c) to identify key policy issues that need to receive attention during the design and implementation phases; and (d) to offer some preliminary policy recommendations and propose next steps. The chapter one discusses the rationale for retirement income transfers. The main justifications are the limited coverage of the mandatory pension systems (chapter two) and the risk of poverty during old age (chapter three). Chapter four then examines the rights, based approach to expansion of social security coverage based on the conventions and recommendations of the International Labor Organization (ILO). The middle part of the book deals with international experience. Chapters five, six, and seven reviews selected programs in low-income, middle-income, and high-income countries, respectively, and chapters eight and nine discuss in greater depth the cases of Japan and the Republic of Korea. The five concluding chapters are concerned with policy issues as related to design. Chapter ten presents a typology of retirement income transfers and analyzes the potential economic impacts of the programs. Chapter eleven deals with financing mechanisms and the problem of allocative efficiency, given limited resources. Chapter twelve addresses two key issues related to institutional arrangements and targeting systems: Should countries consider separate programs to target the elderly poor instead of using the general social assistance system to target all poor? And, how can current proxy means-test systems be adapted to target the elderly poor? Chapter thirteen explores in more detail the links between social pensions and matching contributions in the context of a general strategy for expanding coverage. Finally, chapter fourteen provides guidelines for the design of the administrative systems needed to operationalize the various programs. The remainder of this overview summarizes the main messages from the subsequent chapters and outlines an agenda for future research and policy analysis. For clarity, it starts by presenting some definitions pertinent to the retirement income transfers discussed in the book.