Pension Reform in the Baltic Countries

image of Pension Reform in the Baltic Countries

Reform of the pension regime is continually evolving in the Baltic countries.  This publication contains individual country reports, comparative analysis from a regional perspective and examines key policy issues in the private pension sector.  It includes perspectives on these issues debated during the Pension Conference organised by the OECD in co-operation with the EU in April 2003 in Tallinn, Estonia.  The analyses benefit from in-depth knowledge of OECD experience in these sectors, as well as from experience in other emerging market economies.



Developments in the Estonian Pension System

This paper provides a description of the reform of the Estonian pension system with a focus on the operation of the new funded scheme. One interesting aspect of the Estonian funded scheme is that it involves centralised contribution collection, account management and record keeping. The Tax Board collects contributions while the Central Registrar for Securities houses the central database where all information on members, their choices, and transactions is gathered. The mandatory pension funds are also protected with a guarantee fund that covers losses in the event of bankruptcy of the fund manager or losses generated by violations of regulations. After one year of operation of the industry, the fund industry shows patterns that are typical in other countries that have introduced such schemes, in particular a high degree of market concentration and investment portfolios invested predominantly in bonds...


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