As well as reforming the banking industry, the government is pushing ahead with reform of the pension and insurance sectors and trying to develop a long-term capital market. The passage of the Pensions Act in June 2004 was long overdue, as the old system was essentially a non-contributory, pay-as-you-go defined-benefit scheme, which was bankrupt, and its burgeoning cost and administrative weaknesses meant that it failed to make all the payments it should. Under the new act it is mandatory for all federal government employees and private-sector firms with five employees or more to pay into a pension fund. Employees provide an amount equivalent to 7.5% of their salary, which employers match. State and local government employees are excluded but may join voluntarily. A 20-year contribution guarantees a minimum monthly pension. Private schemes can continue to exist, but their assets need to be held by a Pension Fund Custodian; otherwise, they must apply for a license to a closed Pension Fund Administrator. The system will be regulated by the recently created National Pensions Commission (Pencom). 

Full text of the article is available at http://www.tmcnet.com/usubmit/2006/06/14/1683319.htm