2003年-世界发展银行全球_The_Pension_System_in_Iran___Challenges_and_Opportunities_Volume_2_Technical_Appendix_34页_2mb

Summary of the Pension System in Iran: Challenges and Opportunities (Volume II: Technical Appendix)

Core Content

This technical appendix provides a detailed methodology for financial projections of the pension systems in Iran, specifically the Civil Servants Retirement Organization (CSRO) and the Social Security Organization (SSO). It is part of a broader report analyzing the challenges and opportunities for pension reform in the Islamic Republic of Iran.

Main Features of the PROST Model

The Pension Reform Options Simulation Toolkit (PROST) is a computer-based pension model developed by the World Bank. It is used to simulate pension system behavior and assess financial sustainability under various assumptions over a long time horizon. PROST can model different reform options, including:

• Pay-As-You-Go (PAYG) defined benefit (DB) schemes
• Fully Funded defined contribution (DC) schemes
• Notional Defined Contribution (NDC) schemes

The model is adaptable to different country contexts and can project outcomes up to 100 years. It tracks age/gender cohorts, generating population and labor market projections, and calculates revenues, expenditures, contribution rates, replacement rates, and implicit pension debt.

Key Assumptions

Demographic Assumptions

• Base year (2001): Population is 63.9 million, with a labor force of 17.1 million.
• Fertility rates are projected to decline from 250% in 2001 to 212% in 2010 and further to 207% by 2070.
• Mortality rates are assumed to decrease over time, with females having lower mortality rates than males.
• Life expectancy at birth is projected to increase by about 10 years for men and 20 years for women over the next 70 years, leading to a growing old age dependency rate, which is expected to rise from 13% to 60% by 2070.
• Population pyramids (Figure 4) illustrate the aging trend.

Economic Assumptions

• Real GDP growth is projected to be 6% for the first 10 years, then gradually decline to 3% by 2025 and remain constant thereafter.
• Labor share of GDP is expected to increase from 25% to 45–47% over the next 40 years.
• Productivity growth is assumed to be 4% for the first 10 years, then 2.5% for the next 15 years.
• Inflation is assumed to be zero for all calculations.
• Real interest rate is fixed at 5% throughout the simulation period.
• Unemployment rates are estimated using a Cobb-Douglas production function, with total unemployment rate at 15% in 2001. It is expected to remain relatively stable.

Labor Force Participation

• Male labor force participation is assumed to remain at 60%.
• Female labor force participation is projected to increase from 10–12% to 35% by 2035 and remain stable thereafter.

Modeling of the CSRO Pension System

• Contributors: Based on CSRO data, the number of contributors is expected to increase from 1.6 million in 2001 to 2.1 million by 2070. However, the coverage rate in terms of the labor force is projected to decline over the next 35–40 years and stabilize at about 4%.
• Wage distribution: Assumed to be similar to the SSO system, with women's wages at about 40% of men's wages.
• Beneficiaries:
  • Three categories are modeled: old age pensioners, disabled, and survivors/orphans.
  • The number of new retirees is calculated based on the length of service and annual accrual rate (3.3%).
  • Replacement rates for new retirees are modeled based on average wages, with the assumption that pensions are fully indexed to inflation.
  • The initial replacement rates for old age pensioners and disabled are derived from 2001 data and adjusted for future changes.
  • Survivorship benefits are assumed to remain constant at 57% of the average covered wage.

Modeling of the SSO Pension System

• Contributors and beneficiaries are modeled using the "Flow" method, which calculates inflows first and then derives stocks.
• Expenditures include long-term payments to old age pensioners, disabled, and survivors, as well as child and family allowances.
• Revenues are based on contributions to the SSO pension fund, with a 18% contribution rate out of the total 33% paid to the SSO fund.
• Non-pension-related expenditures (e.g., social assistance and health) constitute about 20% of long-term expenditures and are assumed to remain constant.

Key Financial Indicators

• Replacement rates for new retirees are calculated as a percentage of average wages. These vary by age and gender.
• Implicit pension debt is calculated to assess the financial sustainability of the current system.
• Fiscal balances are projected to show the impact of different reform scenarios on the pension system's financial health.

Conclusion

The PROST model provides a comprehensive framework for analyzing the long-term sustainability of Iran's pension systems. It highlights the challenges posed by an aging population, declining fertility rates, and the need for pension reforms to ensure financial viability. The model also allows for the comparison of different reform options, such as moving towards a multipillar system with defined contribution components, to assess their impact on replacement rates, coverage, and implicit pension debt.