Summary record of the OECD/IOPS Global Forum on Private Pensions
30-31 October 2008, Mombasa, Kenya
Summary record of the OECD/IOPS Global Forum on Private Pensions
30-31 October 2008, Mombasa, Kenya
1. General Information
1.The 2008 global forum on private pensions was organised by the OECD in cooperation with the IOPS (International Organisation of Pensions Supervisors). As in previous years, the global forum was held back to back with the annual meeting of IOPS itself. It was hosted by the Retirement Benefits Authority of Kenya and sponsored by the Government of Japan.
2. Background
2.As in previous years, the Forum attracted a large number and wide range of participants, with strong representation from the host country, region and globally.
3.The Forum was attended by over 150 delegates from over 35 countries (pension regulatory and supervisory authorities, government representatives, industry representatives and private sector participants). The Kenyan and regional representatives included the following:
Kenya authorities:Assistance Minister Finance Kenya,Chairman and Board of Retirement Benefits Authority, Head of the NSSF Kenya, Head of the Capital Markets Authority Kenya.
Regional representation:Botswana, Malawi, Mauritius, Mozambique, Namibia, Nigeria, South Africa, Swaziland, Uganda, East African Community
3. Agenda Items and Points for Discussion
4.The Forum was opened with a speech on ‘The Role of Private Pension Systems in Developing Countries’, delivered by Hon. Dr. Oburu Odinga, Assistant Minister for Finance, Kenya, who also stayed for the first session discussing potential reforms for the pension system in Kenya.
5.The conference was then divided into 5 sessions – with supporting papers produced for each (which were circulated to participants before the event, were made available on the OECD website and which will be produced in a publication).
6.OECD work and good practices were presented, particularly in relation to session three and five (Good Practices for Financial Education relating to Pensions, Guidelines on Pension Fund Asset Management, OECD Principles for Private Sector Participation in Infrastructure).
7.There was good discussion and participation from conference delegates, particularly in session three and four.
Session 1: Pension Industry Development in Kenya
A paper discussing potential reforms for the pension system in Kenya was presented by Mr. Sundeep Raichura, Chairman, Actuarial Society of Kenya. Mr. Raichura praised previous pension reforms, notably those putting in place a regulatory structure for occupational pensions and strengthening the role of the Retirement Benefits Authority, and noted that this is a good time launch the next stage of reform. He stressed that this needs to tackle outstanding challenges of pension coverage and adequacy (both of which are still low in Kenya) and should be on a system-wide basis, also dealing with the Public Sector Pension Scheme and National Social Security Fund.
DiscussantsEdward Odundo, Chief Executive Officer, Retirement Benefits Authority, Kenya,Albert Odero, Managing Trustee, National Social Security Fund, Kenya, and Lazarus Mwema, Chairman, Association of Retirement Benefits Schemes, Kenya all went on to support the call for a National Pensions Policy.
Session 2: Roundtable on Pension Developments in Africa
A panel made up of representatives of pension regulatory and supervisory authorities from Botswana, Namibia, Nigeria, Malawi, Mauritius and South Africa discussed pension reform initiatives in the region. Though instituting different systems (notably the experience of introducing an individual account, defined contribution based system in Nigeria), and at different levels of development (from the developed system in South Africa to the first steps to introduce pensions in Malawi), shared trends were found in the countries’ experiences. Amongst other issues, the cost and need for a universal pension was debated, the need for financial education and pension information was raised, with coherent regulation and robust supervisory structures also were called for.
Session 3: Financial Education Campaigns and Pension Reform
The need for financial education in relation to pensions was a constantly arising theme throughout the conference. During this session representatives from Kenya, Ireland and Poland presented their experiences and lessons learnt from their training and awareness campaigns. Mr. Gerard Clarke, Assistant Head of Regulation at the Pensions Board of Ireland, explained how their on-going national pensions awareness campaign derived its success from factors such as balancing a long-term commitment to the project with keeping the message fresh and focusing and adapting the campaign for specific target groups (women, rural workers or the young). Beata Kalinowska, Director of the Pension Legal Supervision Department of the Polish Financial Supervisory Authority, highlighted the campaign which took place on the introduction of the new pension system in Poland in the last 1990s. The Polish experience stresses how it takes time for knowledge to build up and therefore any campaign needs to start well ahead of the reform process. Information (commercial, not objective) coming from the private sector also needs to be managed carefully to avoid confusion and to help individuals make optimal decisions. Nzomo Mutuku, Manager, Research and Development from the Retirement Benefits Authority of Kenya stressed the positives from the RBA’s training programmes, not just for trustees (better compliance and investment decisions) but also for the RBA - which receives useful feedback and suggestions from these sessions which can drive policy change.
Session 4: Pension Fund Coverage and the Informal Sector
Yu-Wei Hu of the OECD presented a overview paper on the topic of how to extend pension coverage to informal sector workers, stressing the need for some form of universal pension in developing countries such as those in the African region, combined with other innovative practices – from flexible terms of informal sector participants (as is the case in countries such as Chile and Hong Kong, China), to utilizing non-pension infrastructure and participants (as is being tried in India and Bangladesh). Gonzalo Reyes, Head of the Studies Division at the Pension Supervisory Authority in Chile, explained how recent reforms of the pension system in his country have been designed to extend coverage. His key message was that the reasons for non-coverage first need to be established (e.g. self-employment for men, non-participation in the labour force for women) before appropriate and targeted policy responses can be devised (e.g. making contributions compulsory for self-employed workers, introducing a non-contributory, solidarity pillar into the system). Rob Rusconi, and independent consultant from South Africa, then presented a holistic view of the problem, stressing that policy makers first need to understand the people they are trying to reach, before joining up a range of flexible, coordinated solutions (from social security, to community efforts, to financial sector access in general).
Session 5: Pension Funds in Capital Market and Infrastructure Development
Juan Yermo from the OECD presented the Organisation’s work on pension fund investment, before opening the session up to a discussion on pension fund investment in infrastructure. Mr. Angel Melguizo from BBVA, explained the experiences with infrastructure projects across Latin America, with the success of pension fund participation in such projects in Chile, vs. Peru and Mexico, explained by factors such as supportive regulation, strong governance, well developed financial instruments and a long-term commitment. Mr. Nick Rouse of the Africa Infrastructure Fund then highlighted the opportunities for infrastructure development in Africa (which have so far been concentrated in the telecom area, but with sectors such as energy and transport now opening up). The discussants for the session, Mr. Japheth Katto and Ms. Stella Kilonzo, who head the Capital Markets Authorities in Uganda and Kenya respectively, stressed not only the need but also the appetite for such infrastructure projects in their countries, including the current interest of governments in issuing infrastructure bonds.
4. Evaluation
8.A wide range of OECD publications (working papers, guidelines, background on OECD pensions and other work) were made available to conference participants and were eagerly taken up.
9.A summary of responses to the questionnaire on the conference submitted by participants follows:
Over 50 responses were received to the questionnaire (more than 1/3 of the participants).
The general assessment of the conference was excellent from 20% of respondents, very good from 60% and good from 20%. Only 1 person rated the conference as satisfactory.
2/3 of responses rated the content of the conference as very good (again only 1 response of satisfactory)
Almost ¾ of respondents rated the speakers as excellent or very good.
The discussion was rated somewhat lower (50% good, 1/3 very good).
The organisation of the event was rated no lower than good, and as very good or excellent by 85% of respondents
The background documents produced by the OECD were also generally rated as very good.
In terms of relevance of the topics covered to the policy debate in participants’ countries, 23% responded as very significant, 61% as significant and 10% as moderate. Only 1 participant felt the topics were unimportant and not of relevance to policy makers in their country.
32% of respondents indicated that the information, good practices etc. presented at the event would be very significant for their future work, 42% significant and 26% moderately so.
5. Follow up
10.The Global Forum generated strong interest in the OECD commissioned paper on the Kenyan pension system (with the Assistant Finance Minister staying for the discussion on this paper).
11.A continuation of dialogue was requested from the East African Community and SADC (Southern African regional development group). Follow up will be undertaken with these African regional groups to ensure wider circulation of OECD standards throughout the continent.
12.Requests were received from regional participants for follow up as they reform their pension systems. OECD private pension recommendations and guidelines were circulated to countries undergoing pension reform to ensure OECD standards are implemented globally.
13.A strong interest in the OECD financial education project was expressed from all participants. Participants will be included in future communications on OECD financial education work.
OECD/IOPS global forum on private pensions
30-31 October 2008
Mombasa, Kenya
AGENDA
OECD/IOPS Meetings: 28-31 October 2008, Sarova Whitesands Hotel, Mombasa, Kenya
14.00-18.00OECD/IOPS Global Pensions Forum
‘Pension Development in Africa – Opportunities and Challenges’
Opening Remarks
14.00-14.30Ambrogio Rinaldi, Chairman OECD Working Party on Private Pensions
Ross Jones, Deputy Chairman of the Australian Prudential Regulatory Authority, President, IOPS
Edward Odundo, Chief Executive Officer, Retirement Benefits Authority, Kenya
14.30-15.00 Opening Speech
‘The Role of Private Pension Systems in Developing Countries’
Acting Minister for Finance, Kenya (tbc)
Session 1:Pension Industry Development in Kenya
15.00-16.00Moderator:
Tharcisse Kadede, Principal Economist (Fiscal and Monetary), East Africa Community
Speaker:
Sundeep Raichura, Chairman, theActuarial Society of Kenya
Discussants:
Edward Odundo, Chief Executive Officer, Retirement Benefits Authority, Kenya
James Akoya, Managing Trustee, National Social Security Fund, Kenya
Lazarus Mwema, Chairman, Association of Retirement Benefits Schemes)
16.00 – 16.30Coffee Break
Session 2:African Pensions Roundtable
16.30 – 18.00: Moderator:
Fiona Stewart, IOPS/OECD
Panel:
Muhammad Ahmad, Director General/Chief Executive Officer, National Pensions Commission, Nigeria
Jurgen Boyd, Deputy Executive Officer, Retirement Funds, Financial Services Board, South Africa
Tabrez Ahmad Lallmahomed, Senior Examiner, Financial Services Commission, Mauritius
Sophia Amoo-Chimunda, Manager, Pension Funds, Namibian Financial Institutions Authority
Patrick Mhango, Chief Examiner, Insurance and Pensions, Reserve Bank of Malawi
Elaina Gonsalves, Director of Insurance and Pension, Ministry of Finance, Botswana
EveningCocktail Reception – Hosted by National Social Security Fund, Kenya
Friday 31stOctober
Session 3: Financial Education Campaigns and Pension Reform
9.30-11.00Moderator:
André Laboul, Head, OECD Financial Affairs Division, IOPS Secretary General
Speakers:
Irish Experience (National Awareness Campaign), Gerard Clarke, Assistant Head of DB Supervision, The Pensions Board, Ireland
Kenya Experience (Training Trustees), Nzomo Mutuku, Manager,Research and Development, RBA, Kenya
Polish Experience, Beata Kalinowska,Director of Pension Normative Supervision Department, Poland
11.00 – 11.30Coffee Break
Session 4: Pension Fund Coverage and the Informal Sector
11.30 -13.00Moderator:
N.R.Rayalu, CEO of the NPS Trust under PFRDA, India
Speakers:
Yu-Wei Hu, OECD – OECD paper on coverage
Chile/ Latin American Experience:Gonzalo Reyes, Superintendencia de Administradoras de Fondos de Pensiones, Chile
Rob Rusconi, Researcher, South Africa
13.00 -14.30Lunch
Session 5: Pension Funds in Capital Market and Infrastructure Development
14.30 – 16.30Moderator:
Juan Yermo, OECD
Speakers:
Infrastructure Investment in Latin America, Angel Melguizo, BBVA
Emerging Africa Infrastructure Fund, Nick Rouse, Managing Director of Frontier Markets Fund Managers
Discussants:
Japheth Katto, Chief Executive, Capital Markets Authority, Uganda
Stella Kilonzo, Chief Executive, Capital Markets Authority, Kenya
Closing Remarks
16.30-16.45Edward Odundo, Chief Executive Officer, Retirement Benefits Authority, Kenya
Ross Jones, Deputy Chairman of the Australian Prudential Regulatory Authority, Presidentof IOPS
Ambrogio Rinaldi, Chairman OECD WPPP
André Laboul, Head, OECD Financial Affairs Division, IOPS Secretary General
Evening”Kenya’s Diverse Heritage” Dinner at Fort Jesus, Mombasa – Hosted by Retirement Benefits Authority, Kenya
Saturday 1st November
14.00 – 16.00Optional Excursion for IOPS members to Haller Park and Nature Trail, Bamburi
Saturday November 1 – Sunday November 2, 2008 – Retirement Benefits Open Day Exhibition (Aga Khan Hall Moi Avenue, Mombasa)
Saturday 1st November
9.00Doors to Exhibition Open to the public
11.00Official Opening Retirement Benefits Open Day – Joseph Kinyua, Permanent Secretary, Ministry of Finance.
14.00 – 16.00Stakeholder Presentations
17.00Exhibition Closes for the Day
Sunday 2nd November
9.00Doors to Exhibition Open to the public
10.00 –12.00Stakeholder Presentations
17.00Exhibition Closes for the Day
18.00Closing Reception for Exhibitors
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