ERSTE Stiftung Studies

Adequacy of Retirement Income after Pension Reforms in Central, Eastern and Southern Europe

The populations of the Central, Eastern and Southern European countries are ageing very quickly. ERSTE Stiftung Study # 006 is the result of a cooperation project with the World Bank within the scope of the Generations in Dialogue series. It summarizes individual evaluations of the adequacy of retirement income in nine middle-income countries, including Bulgaria, Czech Republic, Croatia, Hungary, Poland, Romania, Serbia, Slovakia, and Slovenia.


All of 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 that worsened during the early years of the transition and became unsustainable under a market economy. Recognizing that short-term fiscal pressures and incentives would worsen over the long term as a result of population ageing, many CESE countries introduced reforms. While approaches varied in all cases, reform typically focused on issues of sustainability rather than benefit adequacy. The World Bank has prepared individual studies for nine CESE countries with the objective of (i) identifying their motivations for reform against the backdrop of the trend toward multi-pillar arrangements, (ii) documenting their key provisions and comparing them in the context of the reformed pension systems in the face of population ageing, and (iv) providing a basis for recommendations to address gaps and take advantage of opportunities for further reforms. This report summarizes these studies and the broad conclusions that emerge from them.