World Bank2014-06-232014-06-232009-11-12https://hdl.handle.net/10986/18728The financial crisis has significantly impacted pension systems in the Europe and Central Asia region (ECA) tempting governments to make policy changes in response to the increased pension deficits they are facing. The crisis exacerbates the existing financial imbalance in the public pension systems by reducing contribution revenues sharply while leaving expenditures constant or even higher. The crisis also resulted in a sharp drop in financial asset values which affects pensions provided by funded pillars. Consequently, no pension system, however structured, has been immune to the crisis. Despite the severity of the financial crisis, it pales in comparison to the demographic crisis which the region will face. Therefore, countries are urged not to make long-term policy changes to address short-run fiscal concerns. Any short-run responses should be consistent with strategies to address the long-run challenges to the pension system. The long-run focus should include: (i) protecting the purchasing power of pensioners and fiscal sustainability of the system, both during the crisis and beyond, by shifting to inflation indexation of pensions, (ii) encouraging individuals to work more and longer by raising retirement ages, equalizing retirement ages between men and women, and curbing early retirement, and (iii) enhancing public awareness of the increasingly limited capacity of publicly provided pensions as populations age.en-USCC BY 3.0 IGOAGING POPULATIONAGING POPULATIONSASSET PRICESASSET VALUESAVERAGE WAGE GROWTHBASIC PENSIONBENEFICIARIESBENEFIT LEVELSBOND MARKETCAPITAL GAINSCAPITAL MARKETCAPITAL MARKET DEVELOPMENTCOLLECTIVE INVESTMENTCOMPENSATIONCONSUMER PRICE INDEXCONTRIBUTION RATECONTRIBUTION RATESCOPYRIGHT CLEARANCECOPYRIGHT CLEARANCE CENTERDEFICITSDEMOGRAPHICDEVELOPING COUNTRIESDISABILITYDOMESTIC CAPITALDOMESTIC CAPITAL MARKETEARLY RETIREMENT PENSIONSECONOMIC CRISISELDERLYEMPLOYEEEMPLOYMENTEQUITIESEUEXPENDITUREEXPENDITURESFINANCIAL ASSETFINANCIAL ASSETSFINANCIAL CRISISFINANCIAL INFRASTRUCTUREFINANCIAL INSTRUMENTSFINANCIAL MARKETFINANCIAL MARKET DEVELOPMENTFINANCIAL MARKETSFISCAL POLICYFIXED INCOMEFOREIGN FINANCINGFUND MANAGEMENTFUND MANAGERSFUNDED PENSION SYSTEMSFUNDED PENSIONSFUNDED SYSTEMSFUTURE PENSIONFUTURE PENSIONSGOVERNMENT BONDSGOVERNMENT FINANCESGROSS DOMESTIC PRODUCTGROSS WAGEHUMAN DEVELOPMENTILLIQUIDITYINCOME GROWTHINCOME INSTRUMENTSINCOMESINDEXED ANNUITIESINDEXED BONDINDEXED BONDSINDIVIDUAL ACCOUNTINFLATIONINFLATION INDEXATIONINSURANCEINSURANCE COMPANIESINTERNATIONAL BANKINTERNATIONAL BEST PRACTICEINTERNATIONAL PORTFOLIOINVESTINGINVESTMENT OPTIONSINVESTMENT REGULATIONINVESTMENT STRATEGYISSUANCEJUDGELABOR COSTSLABOR MARKETLEGAL STATUSLIFE EXPECTANCYLIFE INSURANCELIFE INSURANCE COMPANIESLITERACYLONG TERM SAVINGSMARK TO MARKETMARKET DEVELOPMENTMARKET SIZEMONETARY FUNDMULTIPILLAR SYSTEMNEW ENTRANTSNOMINAL WAGESNOTIONAL ACCOUNTNOTIONAL ACCOUNTSOFFSHORE MARKETSOPPORTUNISTIC BEHAVIOROUTPUTPAY AS YOU GOPENALTIESPENSIONPENSION BENEFITSPENSION CONTRIBUTIONPENSION CONTRIBUTIONSPENSION EXPENDITURESPENSION FINANCINGPENSION FUNDPENSION FUND MANAGEMENTPENSION FUND MANAGERSPENSION FUNDSPENSION REFORMPENSION REFORMSPENSION REGIMESPENSION SCHEMEPENSION SCHEMESPENSION SYSTEMPENSION SYSTEMSPENSIONERSPENSIONSPERFORMANCE MEASURESPILLAR BENEFITSPILLAR SYSTEMSPOLICY RESPONSESPORTFOLIOPORTFOLIO ALLOCATIONSPORTFOLIO DIVERSIFICATIONPORTFOLIOSPRICE INDEXATIONPRIVATE PENSIONSPUBLIC PENSIONPUBLIC PENSIONSPUBLIC SYSTEMPURCHASING POWERRATE OF RETURNRATES OF RETURNREGULATORY RESTRICTIONSREPLACEMENT RATESRETIREESRETIREMENTRETIREMENT AGERETIREMENT AGESRETIREMENT INCOMERETIREMENT INCOME SYSTEMSRETIREMENT PENSIONRETIREMENT SAVINGSRETURNSRISK TAKINGSAVINGS ACCOUNTSSECURITIESSOCIAL PROTECTIONSUBSIDIARYTAXTRANSFERABLE SECURITIESUNFUNDED PENSIONVALUATIONVICTIMSVOLATILITYWAGE GROWTHWAGE INDEXINGWILL10.1596/18728