Recommendations For Reform Of Pension System In Iraq

(MENAFN- Iraq Business News) By John Lee.

The International Monetary Fund (IMF) , International Labour Organization (ILO) , and World bank have issued a detailed report on the reform of Iraq's pension system.

The report, titled "Towards an Inclusive, Equitable and Sustainable National Pension System in Iraq ", highlighted the following key points:

Importance of Pension Systems:

  • Central to social protection.
  • Ensures income security for older persons and vulnerable groups.
  • Prevents poverty and reduces inequality.
  • Facilitates consumption smoothing.
  • Influences labor market choices and has fiscal implications.

Current State of Iraq's Pension System:

  • Highly fragmented, inequitable, and inefficient.
  • Inadequate income protection for the elderly and other vulnerable groups (e.g., survivors, persons with disabilities).
  • Public sector pension strains the budget and is potentially unsustainable.
  • Creates an uneven playing field between public and private sectors.
  • Hinders economic diversification and private sector growth due to an oversized civil service.

Need for Comprehensive Pension Reform:

  • Urgently required to address current system's shortcomings.

Goals of the Policy Note:

  • Assessment:
    • Evaluate existing public and private pension systems on fiscal sustainability, labor market implications, coverage, and benefit adequacy.
  • Development of Options:
    • Propose adjustments for a fiscally sustainable, inclusive, and adequate pension system.
    • Promote private sector development and labor market formalization.
  • Stakeholder Engagement:
    • Engage workers, employers, and civil society in developing an inclusive system.
    • Focus on including informal economy workers, female workers, workers with disabilities, and other disadvantaged groups.

Click here to download the full 71-page report

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