Kickstarting a Pension System Through International Aid

Overview

In this paper, we present a novel idea to address issues faced by pension systems in developing and emerging economies: direct funding of pensions through international aid. In our system, aid from domestic and international donors would be used to finance matching contributions, thereby increasing the capital saved for retirement and simultaneously incentivising individuals to save. Furthermore, aid would directly arrive in a worker’s retirement savings account without passing through government budgets, allowing for strong transparency and the ability to “follow the money” by both donors and recipients. We believe that this idea addresses some of the key shortcomings of past pension policies, as well as protects pension savings from changing government priorities.

This new paper is a revision from a previous publication from the Coller Pensions Institute in November 2023.