The older we get, the more we worry about our
pensions. For most of us, just the thought of
sorting out the complexities puts us off. So imagine
living in a country that has just reformed its
state-owned and previously socialist era system.
Imagine being told you need to make important
decisions that could affect your future. Where
do you turn for help?
Gabriela Sekulovska found herself in just this
situation. She wasn’t sure whether the new alternative
was suitable for her or whether she should stick
with her current plan. All she’d heard were rumors
which made her head spin.
So she was delighted to find a full page ad in
the newspaper explaining her options, written
in a straight forward way, and best of all, listing
a website where she could get more information.
"The idea that my own savings will go for
my own pension benefit is wonderful! The website
clearly explained that I would have my own individual
account,” says Gabriela. “I told Altay, my colleague
about this new pension scheme and we both explored
possibilities and made calculations using the
website calculator. It helped us to decide to
join the new pension system."
Macedonia is embarking on a bold reform of its
pension system that will give workers a choice
about how their retirement benefits are invested.
Workers are being asked to choose whether to join
a privately managed pension system or remain in
the old state-owned system. A USAID sponsored
website allows workers to access an actuarial
model to help them determine which system is best
for them.
Negative demographic trends will cause the state-owned
pension system to come under financial stress,
as the number of new pensioners drawing benefits
from the system are outpacing the number of new
workers contributing to it. In response, a reform
program designed and implemented with World Bank
and USAID funded assistance over the last five
years has been launched.
The new system allows workers employed before
Jan 1, 2003 to decide whether to stay in the old
state-run system or split their contributions
between the state run pillar and a new pillar
that will be managed by two private pension funds.
These funds will collect and invest pension contributions
and gradually build up a retirement nest egg.
The question is: which system will produce a bigger
retirement benefit?
To enable workers to make an informed decision,
USAID created a website to inform them about the
pension reform and give them access to a “pension
calculator” based on an actuarial model developed
with World Bank assistance. The website was created
by the Financial Services Volunteer Corps (FSVC).
The calculator allows workers to enter their individual
biographic data to the model and receive a recommendation
whether to join the new system or stay in the
old one.
The website has proved to be a valuable resource
to workers who otherwise would not have access
to actuarial models. The website received over
15,000 “hits” and over 100,000 page views in the
months leading up to the start of the reform,
demonstrating that a large number of individuals
who were undecided relied on the website for information.
. The website is also being used by pension fund
agents as a tool to educate workers on their rights
and benefits under the new system.
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