Pension systems in the Middle East and North Africa (MENA) are under growing financial stress and urgently need reform, according to a new World Bank report released called Pensions in the Middle East & North Africa: Time for Change.
The report–a regional review of more than 30 pension systems in 13 countries–calls for a series of measures that would allow governments to gradually reform their unsustainable pensions systems, and thus avoid future crises.
According to the new report, pension systems in the region face problems in terms of limited coverage, fragmented administration, and system design that negatively affect incentives and equity. The report suggests that pensions systems try to offer too much in terms of benefits. On average, full-career workers would receive a pension of nearly 80% of earnings before retirement.
This is much higher than the pension promise in 24 high-income countries (as well as 10 countries in Eastern Europe and Central Asia and 9 countries in Latin America and the Caribbean), where pension represents on average 57% of pre-retirement earnings.