Adequacy of Retirement Income after Pension Reforms in Central, Eastern and Southern Europe: Eight Country Studies

The former transition countries of Central, Eastern, and Southern Europe (CESE) inherited defined benefit public pension systems financed on a pay-as-you-go basis. Under central planning, these systems exhibited fiscal strains which worsened during the early years of the transition and became unsustainable under a market economy and projected population aging. All CESE countries introduced reforms that varied with regard to the choice between parametric and systemic reforms and over the introduction of funding but typically focused on issues of sustainability rather than benefit adequacy. To assess benefit adequacy of the reformed systems against the imperative of long-term fiscal sustainability individual studies for nine CESE countries Bulgaria, Czech Republic, Croatia, Hungary, Poland, Romania, Slovakia, Slovenia, and Serbia have been prepared. Benefit adequacy is thereby assessed by the gross and net replacement rates for steady state conditions approximated by the year 2040 for both income and contribution record dimension of the insured.

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