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 - 10 of 34

Toward an Objective-Driven System of Smart Labor Migration Management

(World Bank, Washington, DC, 2010-12) Holzmann, Robert ; Pouget, Yann

This policy note offers motivation and a game plan for achieving a coherent and mutually beneficial labor migration system. It argues that migrant workers may make important contributions to economic growth and development in both sending and receiving countries if they find enabling conditions. To achieve a potential win-win-win situation requires: (1) a sustainable migration management system that takes into account the interests of the various stakeholders involved; (2) a clear identification and articulation of objectives and interests in migration by key stakeholders, based on a common conceptual framework for migration and development; (3) regional and bilateral coordination mechanisms to balance these (potentially divergent) objectives and to reach compromise under labor agreements and policies; and (4) effective, evidence-based polices and public and private sector interventions to achieve the objectives that are known and applied at the levels of sending, receiving, returning, and circulating.
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.
Matching Contributions for Pensions : A Review of International Experience

(Washington, DC: World Bank, 2013) Hinz, Richard ; Holzmann, Robert ; Tuesta, David ; Takayama, Noriyuki ; Hinz, Richard ; Holzmann, Robert ; Tuesta, David ; Takayama, Noriyuki

Establishing robust, equitable, and effective social protection is essential to reducing poverty and boosting prosperity at all levels of development. The demographic transition that has already transformed most high-income societies will exert similar and growing pressures on others, reinforcing the role of pensions and savings for old age as a central pillar of social protection systems. One possible solution that has emerged in recent years that offers the potential to overcome this challenge is the provision of contribution matches to provide an immediate and powerful incentive for participation in pension saving systems. Originating in several high-income settings there are now a number of innovations and substantial experience in low-income countries in using this design to stimulate coverage and savings. This experience now provides a rich opportunity for learning, not just from the longer experience of a few high-income countries but also the more meaningful South-South learning across developing countries.This volume, which reviews the experience with matching pension contributions across the range of countries that have used the design, makes an initial, but critically important investment in this learning process. The description and analysis of this experience which is the product of partnership and collaboration across many public and private institutions provide an invaluable early assessment of the design to inform policy makers and practitioners as well as serve as a model for the kind of cooperation that will be required to address this difficult challenge. At the World Bank, we look forward to being part of this learning process of how to best provide old-age security for all.
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.
New Ideas about Old Age Security : Toward Sustainable Pension Systems in the 21st Century

(Washington, DC: World Bank, 2001) Holzmann, Robert ; Stiglitz, Joseph E. ; Holzmann, Robert ; Stiglitz, Joseph E.

Given the impact of the multipillar approach to pension reform and the diversity of its implementation, the authors, who presented papers at the 1999 conference on "New Ideas About Old Age Security," re-examine the evidence and thinking on pensions and retirement security. This report examines global issues on pension reform which help put in perspective three major sets of questions. A first set of questions deals with generic issues that concern policymakers worldwide, almost independently of apporaches to reform. Most prominent but also least understood are the economic policy questions regarding the economic circumstances that are most conducive to the initiation of a reform and to its eventual success. Equally important are questions relating to the coverage of the labor force under a reformed system. Other questions concern the distributive effects of reformed systems with respect to generation, income group, and gender. A second set of questions is linked with a move toward funded provisions under a multipillar approach. A third set of questions concerns the multipillar reform approach itself. A wide consensus has emerged inside and outside the World Bank about the multipillar framework, but that consensus does not extend to several key issues regarding how the framework should be implemented in practice. The introduction to this report sums up each chapter in the report and concludes with a discussion of policy issues and on areas requiring further research.
Global Pension Systems and Their Reform : Worldwide Drivers, Trends, and Challenges

(World Bank, Washington, DC, 2012-05) Holzmann, Robert

Across the world, pension systems and their reforms are in a constant state of flux driven by shifting objectives, moving reform needs, and a changing enabling environment. The ongoing worldwide financial crisis and the adjustment to an uncertain 'new normal' will make future pension systems different from past ones. The objectives of this policy review paper are threefold: (i) to briefly review recent and ongoing key changes that are triggering reforms; (ii) to outline the main reform trends across pension pillars; and (iii) to identify a few areas on which the pension reform community will need to focus to make a difference. The latter includes: creating solutions after the marginalization or, perhaps, demise of Bismarckian systems in countries with high rates of informality; keeping the elderly in the labor market; and addressing the uncertainty of longevity increases in pension schemes.
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.
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.
Aging Population, Pension Funds, and Financial Markets : Regional Perspectives and Global Challenges for Central, Eastern, and Southern Europe

(World Bank, 2009) Holzmann, Robert

Population aging is a worldwide phenomenon, but it is particularly advanced in highly developed northern countries. The retirement of the baby-boom generation in these rich countries will impose additional, albeit temporary, pressure on their pension systems. To cope with this pressure, reforms have been introduced that have lessened the generosity of publicly provided pension benefits. By design and by implication, this change increases the importance of mandatory and voluntary funded retirement schemes in smoothing consumption across the life cycle. The first three chapters of this book investigate questions germane to pension systems in the Central, Eastern, and Southern Europe (CESE) economies: the extent to which pension systems were prepared to deal with multi pillar pension reform, how to foster the development of financial systems so that they can better support funded systems, and how ready the systems are for the approaching payout of benefits as the first participants in the funded pillar approach retirement age. The remaining three chapters investigate broader questions facing pension systems in both developed and emerging countries: the capacity of the financial markets to deliver sufficiently high net rates of return, the benefits and disadvantages of investment in emerging markets, and the effect of aging on the rates of return afforded by funded and unfunded schemes.
Adequacy of Retirement Income after Pension Reforms in Central, Eastern, and Southern Europe : Eight Country Studies

(World Bank, 2009) Holzmann, Robert ; Guven, Ufuk

All of the former transition economies in Central, Eastern, and Southern Europe (CESE) inherited from the era of central planning traditional defined-benefit pension systems financed on a pay-as-you-go basis. Like many pay-as-you-go public pension systems elsewhere in the world, CESE pension systems were in need of reforms to address short-term fiscal imbalances and longer-term issues relating to population aging. Reforms were also needed to adjust benefit and contribution structures to meet the challenges of-as well as to take advantage of opportunities relating to the transition to a market economy, including the widespread adoption of multiplier designs with improved risk-sharing across funded and unfunded pillars. By 2006, most countries in Europe and Central Asia had introduced a voluntary private pension scheme. By 2008, 14 countries roughly half of all countries in the region had legislated mandatory private pension schemes, and all but one of those schemes (the one in Ukraine) had been introduced. These reforms shared a number of common objectives, in particular putting the systems on a sounder financial footing and better aligning them with the (very different) incentives of a market economy. This report is organized as follows. The first section discusses the motivation for reform across the eight countries included in the study against the backdrop of the regional (and global) trend toward multiplier pension arrangements. The second section summarizes the key provisions of the reformed systems in the eight countries within the World Bank's five-pillar framework for pension system design. The third section summarizes pension system performance against the two crucially important dimensions of adequacy and sustainability. The last section provides some policy recommendations for addressing gaps in reforms and taking advantage of further opportunities.