The FINANCIAL — Aging populations and revenue shortfalls from low levels of formal employment are straining public pension systems in Pacific countries, an Asian Development Bank (ADB)-supported workshop heard on November 2.
“In Pacific island countries, national pension funds are managing a transition from traditional, informal old age support networks to nationally funded models; yet these systems often struggle to reach their beneficiaries, provide adequate support, and do so sustainably,” said Ganeshan Wignaraja, Advisor with ADB’s Economic Research and Regional Cooperation Department. “Raising the retirement age, encouraging private pensions, and adopting robust regulatory standards can help address these challenges.”
The workshop, titled Strengthening Pension Systems and Health Coverage in the Pacific, is being hosted by ADB and the Fiji National Provident Fund (FNPF). It aims to help identify policies Pacific island countries can pursue to secure and expand their pension systems.
A key aspect of the workshop is a review of the FNPF, which, like ADB, celebrates its 50th anniversary this year. Presentations will examine reforms enacted in 2011-2012 to secure the sustainability of the fund and the lessons these can offer other Pacific countries, according to ADB.
The workshop is also examining the merits of pension funds providing additional benefits to members, such as health insurance and loans, in addition to retirement benefits. The regulatory implications of providing such services will be discussed and contrasted with trends in developed countries, where pension funds tend to focus solely on retirement products.
The workshop is being supported by the Economic Research and Regional Cooperation Department and the Pacific Private Sector Development Initiative (PSDI), a technical assistance facility cofinanced by the Government of Australia, the Government of New Zealand, and ADB. PSDI supports ADB’s 14 Pacific developing member countries to improve the enabling environment for business and to support inclusive, private sector-led economic growth. The support of the Australian and New Zealand governments and ADB has enabled PSDI to operate in the region for almost 10 years and assist with more than 280 reforms.
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