Creation of a Reformed Pension System for Civil Servants in Timor-Leste

In February 2011, the government of Timor-Leste (GoTL) enacted a law creating a pension system for civil servants. However, the government now wants to repeal and replace this pension law as it deems it too broad in scope, coverage and cost, and it contains several non-standard design features. In its place, the GoTL wants to consider creating a reformed permanent civil service pension program covering all civil servants. Within a few years thereafter, the government also wants to implement a national social security system. This system will cover formal sector workers, and it is likely civil servants will also participate. Consequently, civil servants may get benefits from both the national social security system and the civil service pension system. Timor-Leste has many civil servants with long service both before and after independence. The reformed pension system for civil servants will give the government a method of honorably allowing its elderly civil servants to exit the work force. At this time, the primary method of caring for elderly civil servants is to continue salary payments. This is because there is no mandatory retirement age for civil servants and the government does not yet have effective procedures for compelling older workers to retire when their productivity level declines. Consequently, the government has informed us that the civil service pension is unlikely to pay benefits to any civil servants until such time as these two issues are resolved. The government estimates this will take five years (until 2018). Until that time, elderly civil servants will continue to receive their salary and will not receive a pension from the reformed civil service pension program.

Bibliographic Details

Main Author:	World Bank
Language:	English en_US
Published:	Washington, DC 2014-02
Subjects:	ACCOUNTING, ACCRUAL RATE, BANKRUPTCY, BENEFICIARY, BENEFIT FORMULA, BENEFIT FORMULAS, BENEFIT LEVELS, BENEFIT PAYMENT, BENEFIT PAYMENTS, BREADWINNER, CAPITAL MARKETS, CASH TRANSFER, CIVIL SERVANT, CIVIL SERVANTS, CIVIL SERVICE, CIVIL SERVICE PENSION, CIVIL SERVICE PENSIONS, CIVIL WAR, COMPENSATION, CONSUMER PRICE INDEX, CONTRIBUTION RATE, CONTRIBUTION RATES, DECENTRALIZATION, DEFINED BENEFIT, DEFINED BENEFIT PLAN, DEFINED BENEFIT PLANS, DEFINED CONTRIBUTION PENSION, DEFINED CONTRIBUTION PLAN, DEMOGRAPHIC, DEPENDENCY RATIO, DEVELOPING COUNTRIES, DISABILITIES, DISABILITY, DISABILITY PENSION, DISABILITY PENSIONS, DISABILITY RETIREMENT, DIVIDEND, EARLY RETIREMENT PROGRAM, ECONOMIC CRISES, ECONOMIC DEVELOPMENT, ELDERLY, EXPENDITURE, FAMILIES, FEMALE, FEMALES, FERTILITY, FERTILITY RATE, FERTILITY RATES, FINANCIAL INFRASTRUCTURE, FINANCIAL MANAGEMENT, FINANCIAL STATEMENT, FUNDED BASIS, GOVERNMENT BORROWING, GOVERNMENT BUDGET, GOVERNMENT EXPENDITURES, GOVERNMENT POLICY, GOVERNMENT REVENUES, GROWTH RATE, GROWTH RATES, HEALTH CARE, HOME, HUSBANDS, INDIVIDUAL ACCOUNTS, INFLATION, INFLATION RATE, INFLATION RATES, INFORMAL SECTOR, INITIAL RETIREMENT AGE, INTERNATIONAL STANDARDS, INVESTMENT INCOME, LABOR FORCE, LABOR FORCE PARTICIPATION, LABOR LAW, LAWS, LAYOFFS, LEGAL RIGHTS, LEGISLATION, LIABILITY, LIFE ANNUITY, LIFE EXPECTANCIES, LIFE EXPECTANCY, LIFE INSURANCE, LIVING STANDARD, LOCAL CAPITAL MARKETS, LOCAL GOVERNMENT, LONG-TERM PROJECTIONS, MACROECONOMIC ENVIRONMENT, MACROECONOMIC VARIABLES, MANDATORY RETIREMENT, MARRIAGES, MORTALITY, NATIONAL PENSION, NATURAL DISASTERS, NOTIONAL ACCOUNTS, NUMBER OF BENEFICIARIES, OLD AGE SUPPORT, OUTPUT, OUTPUTS, PENSION, PENSION AGE, PENSION BENEFIT, PENSION BENEFITS, PENSION EXPENDITURES, PENSION FUND, PENSION FUND ASSETS, PENSION LAW, PENSION PAYMENTS, PENSION PLAN, PENSION PLANS, PENSION PROGRAM, PENSION PROGRAMS, PENSION REFORM, PENSION SCHEME, PENSION SYSTEM, PENSION SYSTEM REFORM, PENSION SYSTEMS, PENSIONABLE EARNINGS, PENSIONERS, PENSIONS, PROVIDENT FUND, PURCHASING POWER, RATE OF RETURN, REAL GROWTH RATE, REPLACEMENT RATES, RETIREES, RETIREMENT, RETIREMENT ACCOUNT, RETIREMENT AGE, RETIREMENT AGES, RETIREMENT BENEFIT, RETIREMENT BENEFITS, RETIREMENT PLANNING, RETIREMENTS, SAVINGS, SEX, SOCIAL ASSISTANCE, SOCIAL INSURANCE, SOCIAL INSURANCE SYSTEMS, SOCIAL PENSIONS, SOCIAL PROTECTION, SOCIAL SECURITY, SOCIAL SECURITY BENEFITS, SOCIAL SECURITY SYSTEM, SOCIAL SECURITY SYSTEMS, SUPPLEMENTAL BENEFITS, SURVIVOR PENSION, SURVIVOR PENSIONS, WAGE GROWTH, WAGE INDEXING, WIDOWS, WILL, WITHDRAWAL, WORKER CONTRIBUTIONS,
Online Access:	http://documents.worldbank.org/curated/en/2014/02/20425276/creation-reformed-pension-system-civil-servants-timor-leste https://hdl.handle.net/10986/21120
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