2007年-世界发展银行全球_Bosnia_and_Herzegovina_Pension_System_Note_71页_5mb

Bosnia and Herzegovina: Pension System Note Summary

Core Content

This report evaluates the current pension system in Bosnia and Herzegovina (BH), which consists of two pension funds: the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS). Both systems have undergone significant reforms with World Bank support, but structural challenges persist and are expected to worsen over time. The report outlines current parameters, demographic data, financial outcomes, and proposes reform options to address sustainability and fairness.

Main Points

• Pension System Structure: BH has two pension funds, one for each entity (FBiH and RS), with different parameters and financial outcomes.
• Contribution Rates: Both entities have a contribution rate of 24% of gross wage (FBiH) and 24% of net wage (RS), which are relatively high compared to OECD countries.
• Benefit Accrual: Benefit accrual rates are more generous in BH, with individuals earning more than 2 percentage points of net wage per year of contribution for the first 20 years.
• Retirement Age: The official retirement age is 65 for both entities, but many individuals retire earlier, especially women in RS who can retire at 60 with 35 years of contributions.
• Informal Labor Market: The pension system design encourages short contribution careers, increasing the prevalence of informal labor. This is due to higher accrual rates in the first 20 years and the lack of benefit increases beyond 40 years of contributions.
• Disability and Survivor Pensions: Disability pensions are more generous than old age pensions, and eligibility is based on inability to perform the last job. Survivor pensions have different criteria between the two entities.
• Financial Challenges: Both pension funds face financial constraints. The Federation is expected to pay lower benefits over time due to revenue limitations, while RS requires substantial budgetary support.
• Demographic Trends: The old age population dependency ratio is projected to increase significantly by 2075, indicating growing pressure on the pension system.
• System Dependency Ratio: This ratio is much higher in BH than in OECD countries, primarily due to the high proportion of survivor pensions.
• Contributor and Pensioner Coverage: Contributor coverage is low (25.5% of working-age population), and pensioner coverage is also low (only 2/3 of the elderly receive pensions).
• Reform Proposals: The report suggests parametric reforms to harmonize parameters across entities, remove disincentives, and align with international standards. These include:
  • Equalizing contribution rates to 24% of net wage.
  • Removing the early retirement option for women in RS.
  • Lowering the annual accrual rate to 1.5% for all years.
  • Indexing pensions to inflation instead of using a coefficient system.
  • Reducing the number of disability and survivor pensions by 50% in 20 years.

Key Information

• Current Parameters:
  • FBiH: Retirement age 65 for both genders with 20 years of contribution; accrual rate 2.25% for first 20 years, 1.5% for next 20 years, and 0 beyond 40 years.
  • RS: Retirement age 65 for men and 60 for women with 35 years of contribution; accrual rate same as FBiH.
• Financial Outcomes:
  • FBiH: Surplus of 52 million KM in 2003.
  • RS: Deficit of 66 million KM in 2003.
• Demographics:
  • Contributors: 465,998 in FBiH and 294,044 in RS.
  • Beneficiaries: 293,348 in FBiH and 173,784 in RS.
  • Old Age Beneficiaries: 119,263 in FBiH and 79,606 in RS.
  • Disability Beneficiaries: 65,128 in FBiH and 32,313 in RS.
  • Survivor Beneficiaries: 108,957 in FBiH and 61,865 in RS.
• System Dependency Ratio: 62.95% in FBiH and 59.10% in RS.
• Old Age Dependency Ratio: 15.5% in both entities.
• Pension Expenditures: 5.3% of GDP in FBiH and 2.4% in RS.
• Long-Term Challenges: The pension system is expected to face significant deficits, even after reforms, due to demographic aging and low contribution rates.
• Proposed Reforms:
  • Harmonizing parameters across the two entities.
  • Moving toward a funded pension system (second and third pillars).
  • Ensuring financial market stability to support long-term pension investments.
  • Creating a legal and institutional framework for a healthy non-bank financial sector.
  • Providing a social pension for all elderly to reduce reliance on contributory schemes.

Conclusions

• The BH pension system is under financial strain due to low contribution coverage and high pensioner dependency.
• Parametric reforms can improve fiscal sustainability and reduce disincentives for long-term contributions.
• A social pension for all elderly could be a viable long-term solution, reducing the burden on the contributory system.
• The development of a funded pension system requires careful evaluation of financial market conditions and long-term macroeconomic stability.
• The government should focus on reforming the current system to create fiscal space for future changes and to support a more sustainable and equitable pension framework.