engleski

Institutional challenges for mandatory pension funds in Central and Eastern Europe

Pension funds are one of the basic contributors of the efficient financial system because of promoting long-term savings and stimulating financial development and economic growth. Strong development of pension funds in the last decades is driven by the growing demand arising from the ageing of the population in the last decades. Due to the great importance of pension funds in the social and political terms, their establishment, operations and investment structure are subject of the special interest in every country. Therefore, development of institutions is basic precondition for successful performance and meeting the specific goals of pension funds. Institutional framework include a set of laws and regulations, supervisory and regulatory institutions, organization structures, policies and procedures. In this paper we describe the intricacy of pension governance and instituional framework in the countries of Central and Eastern Europe (CEE). The comparative analysis indicates relative variation in their achieved results, portfolio structure, costs and legislative framework. Inspite of similar path of development and environmental conditions of pension system in these countries their responses to the impact of global financial crises were heterogeneous. Due to underperfomance of mandatory pension funds after 2008 and the shortfall in public fiscal revenues, confidence in the pension system and political suport weakened and triggered significant and comprehensive changes in the pension systems of CEE countries. They resulted in reduction, reform or reversal of second pillar and mandatory pension funds. The aim of this paper is twofold: to examine the diversity of formal institutional frameworks in and to point out possible indicators of institutional development that can be obstacles or incentivnes for pension funds perfomance.

Central and Eastern European countries ; financial crises ; institutional framework ; mandatory pension funds

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