'Over the past decade the World Bank has promoted pension reforms entailing the introduction of multi-pillar pension systems. Multi-pillar pension reforms typically included the introduction of a second pillar, in which mandatory savings are accumulated in individual accounts. The new second pillars were expected to contribute to the primary objective of a more diversified and sustainable pension system but secondary benefits hoped for - higher savings ratios, faster capital market development and improved growth performance - have not materialised in some of the countries that have implemented these reforms.

This note adds to existing literature by examining the enabling conditions for the creation of mandatory funded pension funds, and identifying additional factors that are important to consider in the early stages of reform.'