2003年-世界发展银行全球_Pensions_in_Palestine___Reform_in_a_Context_of_Unrest_Voume_2_Technical_Annex_52页_3mb

Summary of "Pensions in Palestine: Reform in a Context of Unrest" (World Bank Report No. 25046-GZ)

Core Content

This report examines the current pension and income security systems in the West Bank and Gaza (WBG) and evaluates the financial sustainability of these schemes. It highlights the urgent need for pension reform due to the growing elderly population, increasing fiscal deficits, and the broader economic and social challenges faced by the Palestinian Authority (PA) and the population.

Main Points

• Economic Context: The WBG has experienced a severe economic downturn, with GDP contracting by 10% in 2001 and a significant rise in unemployment and poverty rates. The elderly, especially widows, are identified as one of the most vulnerable groups.

• Demographic Trends: The population of the WBG is expected to double in two decades, and the elderly population will increase by over 200% by 2050. This necessitates a more robust pension system to support the aging population.

• Current Pension Systems:

  • Civil Service Pensions: Two separate schemes exist for the West Bank and Gaza, with the Gaza Scheme being more recently established and less financially sustainable.
  • Gaza Scheme (Ten Percent Scheme): Administered by the Gaza Pensions and Insurance Corporation (GPIC), it is a partially funded Defined Benefit (DB) scheme. Workers and employers contribute 10% and 12.5%, respectively.
  • West Bank Scheme (Two Percent Scheme): Financed from general revenues, it is a Pay-As-You-Go (PAYG) DB scheme with lower contributions and higher deficits.
  • Security Forces Scheme: A new pension scheme covering all security forces, including those who joined before the law was enacted. Benefits are generous, with 80% of basic wage and additional allowances.
  • Municipal Employees: Covered under the Gaza Scheme or local schemes, with limited coverage in the West Bank.
  • Private Sector: Very few private employers offer pension schemes, and benefits are generally modest and not well-developed.

• Financial Challenges:

  • The Gaza Scheme is projected to face significant deficits within five years.
  • The West Bank Scheme will continue to accrue liabilities for current employees and must pay pensions until the last retiree dies.
  • The financial burden of pension schemes is increasingly affecting public finances and limiting resources for other development priorities.

• Equity and Sustainability Concerns:

  • The current system has a regressive bias, placing the financial burden on the private sector and households.
  • The lack of insurance and alternative financial mechanisms exacerbates the vulnerability of the elderly.
  • The report argues that the PA should prioritize the elderly, who are often uninsured, in pension reform.

Key Information

• Coverage Rates:

  • In 2000, approximately 30% of full-time workers had access to pension schemes, mostly through the PA.
  • The Gaza Scheme covered 39,000 government workers with 6,500 beneficiaries.
  • The West Bank Scheme covered 24,000 workers with 5,200 beneficiaries.
  • The Security Forces Scheme covers around 40,000 members, possibly growing.

• Retirement Benefits:

  • Gaza Scheme: Monthly pension is 2.5% of final wage per year of service, up to a maximum of 50% for 20 years of service. Additional lump sum and monthly allowances are available.
  • West Bank Scheme: Benefits are 2% of final wage per year of service, with a maximum of 50% for 20 years of service. A small lump sum allowance is provided.
  • Security Forces: Pensions are more generous, with 80% of basic wage plus 70% of that amount regardless of retirement age.

• Contribution and Funding:

  • The Gaza Scheme is partially funded, while the West Bank Scheme is fully funded from general revenues.
  • The new Security Forces Scheme is based on a Defined Contribution (DC) model, with contributions managed in interest-bearing accounts.
  • Private sector schemes are mostly Provident Funds with modest contributions and benefits.

• Reform Recommendations:

  • The report emphasizes the need for financial sustainability and affordable solutions.
  • It suggests that reform should begin with the most vulnerable groups, particularly the elderly, who are currently underrepresented in the pension system.
  • A national pension scheme is proposed as a long-term solution, with a conceptual framework to guide future policy development.

Conclusion

The report underscores the critical need for pension reform in the WBG due to demographic shifts, financial sustainability issues, and the increasing vulnerability of the elderly population. It calls for a coordinated and comprehensive approach to pension systems, with a focus on creating a more equitable and sustainable framework that addresses the needs of the aging population and supports the PA's long-term development goals.