Eastern Caribbean Currency Union: Selected Issues

International Monetary Fund

No 2024/094, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper on the Eastern Caribbean Currency Union (ECCU) focuses on efficient, sustainable, and fair pension schemes. Despite recent reform efforts, the financial sustainability of the ECCU’s defined benefit social security schemes remains under strain, largely reflecting the still relatively low contributions and generous payouts. This, coupled with a rapidly ageing population and high labor market informality, increases the need for a comprehensive review and adoption of further parametric and non-parametric reforms of the pension systems to avoid abrupt and more sizable adjustments in the future as well as to reduce the risks of old-age poverty. This annex reviews pension schemes in the ECCU, with a focus on assessing their design and performance and identifying policy options to improve their efficiency, fairness, and sustainability. Key recommendations include swift adoption of further comprehensive reforms to address design weaknesses, improving coverage, investment strategy, administrative efficiency, and transparency, and establishing automatic adjustment mechanisms.

Keywords: NIS pension schemes Overview; labor market performance; public sector pension schemes; labor markets in the ECCU; ECCU migration; Pensions; Pension spending; Aging; Retirement; Labor markets; Caribbean; Global (search for similar items in EconPapers)
Pages: 27
Date: 2024-04-25
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