02063cas a2200277 a 4500 AALejournalIMF005298 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451870534 1018-5941 BD-DhAAL BD-DhAAL Cuevas, Alfredo. Pension Privatization and Country Risk / Alfredo Cuevas, Maria Gonzalez, Arnoldo Lopez-Marmolejo, Davide Lombardo. Washington, D.C. : International Monetary Fund, 2008. 1 online resource (25 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper explores how privatizing a pension system can affect sovereign credit risk. For this purpose, it analyzes the importance that rating agencies give to implicit pension debt (IPD) in their assessments of sovereign creditworthiness. We find that rating agencies generally do not seem to give much weight to IPD, focusing instead on explicit public debt. However, by channeling pension contributions away from the government and creating a deficit of resources to cover the current pension liabilities during the reform's transition period, a pension privatization reform may transform IPD into explicit public debt, adversely affecting a sovereign's perceived creditworthiness, thus increasing its risk premium. In this light, accompanying pension reform with efforts to offset its transition costs through fiscal adjustment would help preserve a country's credit rating. Mode of access: Internet Gonzalez, Maria. Lombardo, Davide. Lopez-Marmolejo, Arnoldo. IMF Working Papers; Working Paper ; No. 2008/195 Full text available on IMF http://elibrary.imf.org/view/journals/001/2008/195/001.2008.issue-195-en.xml IMF e-Library