The Current Situation of Retirement Income Provisions in Japan: Social Security Pension Schemes and Corporate Pension Plans

Japan has been faced with rapid population ageing for decades. This has continuously reduced the level of social security pension benefits. Based on this it is often said that corporate pension plans should play a wider role forward in providing retirement benefits. However, we also have to know that there is a limit to what corporate pension plans can do in place of the social security pension schemes. In this paper we extract lessons from the history of social security pension schemes in our country and try to define the roles of corporate pension plans and social security pension schemes. In conclusion we should keep adequacy of social security pension benefits even if the contribution rate becomes a bit higher. Corporate pension plans just enrich people's life in retirement. We have to remember that corporate pension plans were not certain means for reducing the poverty in old age and that for this reason social security pension schemes by social insurance were invented.     

Reforming social security in economies in transition: Problems and policies in the former Soviet Republic of Moldova

In the Republic of Moldova, as in other former Soviet republics, a great deal of pressure has been put on the social security system by the removal of general consumer subsidies and their replacement with targeted compensation payments (assistance). The growth of assistance needs has made it difficult to reform earnings-related pension provision along "insurance" lines. There have also been adverse developments in the labour market. Large-scale open unemployment has not emerged, but insurance contributions are not being paid. Some of the measures which have been adopted to deal with the resulting financial crisis are counterproductive for the development of a social security system compatible with a market economy.     

Income security for older people: An Asian perspective

In Asia and the Pacific, as in other developing regions, the continuing growth of the aged population has a great impact on social security programmes generally and, in particular, on the income security of older persons. In societies where traditional support systems are breaking up, their need for social security protection is increasingly important. A system of social security for the elderly population exists in most countries of the region. Many are provident fund schemes, which are basically saving schemes, and their coverage is low. Where social insurance pension schemes exist, the levels of benefits provided are also low. The focus for future development, therefore, lies in converting the savings schemes into multitiered pension schemes, extending their coverage and raising the level of benefits. In this context the critical question concerns the role of the State and the type of schemes used. The need for public pension schemes is great in Asia and the Pacific, where the level of poverty is comparatively high. Building pension schemes, whether public or private, involves a set of issues that need to be addressed. This article considers the systems currently in place and the challenges and limitations faced when considering the future development of social security in this area.     

Structural pressures, social policy and poverty

The purpose of this article is twofold. The first aim is to examine 15 OECD countries from the point of view of the so-called third-generation studies, analysing if the development of poverty and income transfers has been uniform in countries classified under the same welfare state models. This has been done to test how appropriate it is to use welfare state models as an analytical tool in comparative welfare state research. The second aim is to examine the effect of different structural factors on poverty and income transfers. Obtained results indicate that two demographic variables studied behave somewhat differently. The share of older people in the population is – not very surprisingly – connected to an increase in income transfers. In the case of younger population groups, the results are the opposite. The results show that the greater the proportion of older people in the population, the lower the poverty rates. Social policy has in many countries consisted primarily of pension policy, and investments in the elderly population are now beginning to bear fruit. Good pension schemes diminish the immediate poverty risk of older people. As a consequence of their increased well-being, the overall poverty rate will fall. In addition to demographic factors, the results indicate that the unemployment rate is connected, on the one hand, to growth in income transfers and, on the other hand, also to increases in poverty. However, unemployment's effect on poverty is not straightforward. The direct effect is indeed an increase in poverty but, if income transfers are taken into account, the indirect effect is a decrease in poverty, since unemployment increases income transfers (unemployment benefits), which on their side alleviate poverty.     

Economic crisis and social policy reform in Korea

The economic crisis that broke out in Korea in December 1997 has had a chilling impact on social development in the country. Today unemployment is the highest that Korea has experienced in the past thirty years. This paper aims to examine the impact of the economic crisis on social development and the role of public policy to mitigate the problems caused by the crisis. The economic crisis has hit vulnerable groups harder, increased the proportion of part-time and daily workers, and reversed the trend of steady improvement of income distribution. The economic crisis along with the trend of aging population, globalization, and competition calls for an expanded role of social policy, which the Korean government has neglected for a long time. The main targets of social policy reform in Korea include the expansion of government programs and safety nets for the unemployed and redesigning the national pension and health insurance scheme to provide adequate income security as well as to improve the system sustainability.     

Recent developments in China's social security reforms

China is one of the few developing countries which have managed to establish a comprehensive social security system encompassing social insurance (for pension, medical care, unemployment, employment injury and maternity), social assistance and a housing provident fund. The past two decades have witnessed a continuous process of reform in the Chinese social security system. This article highlights the latest developments in each of the schemes and offers some insights into the problems confronting the system and the prospects for the reform.     

Changing the Financing of the Lithuanian Pensions System

After the first pension reform in Lithuania, in 1995, the reforming process must continue. Important changes are needed, based on principles of old age security financing. A three-tier system has been drafted and approved by the government as a Concept of the reform. The main change proposed as a first tier is the introduction of a national pension based on the residence principle, instead of the existing basic pension based on the insurance principle. It is expected that in this way the problem will be solved of providing protection against poverty for the increasing number of people who do not have the necessary insurance record. The second tier should be a compulsory funded system based on privately managed pension funds. Several important goals would thus be achieved: diversifying the old age security risk between pay-as-you-go and funded schemes; boosting investment opportunities and encouraging financial markets to develop; offering improved incentives for the working population to contribute; and so on. The main obstacle to the introduction of the second tier is the high transition cost. The third tier would comprise voluntary pension funds: their activities should be liberated and the severe constraints on investment return removed.     

The Politics of Public and Private Pension Generosity in Advanced Democracies

The quantitative strand of social policy research suffers from a triple deficit: analyses of aggregate expenditure dominate, most of the few studies of replacement rates focus on unemployment or sickness benefits while pensions are excluded, and the interdependence between public and private pension plans is often ignored. This article addresses the said deficits, first, by discussing the pension sectors' theoretical peculiarities and by proposing two hypotheses: one on the role played by political parties in implementing public pension retrenchment, and the second on their role in extending private pension plans. Second, the article presents regression results of public pension replacement rate changes in 18 developed democracies. The findings show considerably smaller cuts to pensions than to unemployment or sickness benefits, and striking differences regarding partisan effects between the sectors. Lastly, the article assesses partisan effects on private pension plans, detecting some rather surprising effects. Most noteworthy is the fact that those parties which reduced public pension generosity during the 1990s (i.e. Social Democrats) cannot claim responsibility for compensating these cuts by eliciting higher private engagement.     

Equity and Redistribution Between Generations: A Challenge for the Future of Pensions and all Social Protection Schemes

Throughout Europe today, the problems of employment and the prospects of pronounced demographic ageing combine to raise a number of questions on the future of pensions and on the underlying principles of redistribution between generations. Everywhere a new debate has arisen on intergenerational equity. It has often served as the justification for pension scheme reforms introduced or pending in most countries. Some clarification is needed on what is actually meant by intergenerational equity, all the more so with the ongoing complexity of the scientific and political arguments on the subject. In this paper I attempt to show, on the basis of information derived from my research, why a financial view of intergenerational redistribution seems inadequate and how, in discussing the future of such redistribution, there are new forms of life cycle organization and redistribution of worktime and compensated inactivity across this life cycle that need to be considered. This paper aims to show that in considering the future of pension schemes and the prospects of a contract between generations one must take into account the manner in which the distribution of work operates between all ages and across the whole life cycle, in relation to the structure of social security. Welfare states today constitute an inextricable tangle of risks and coverage systems. In such circumstances it would seem rash to countenance the kind of public pension reforms that have been envisaged by a number of member countries of the European Union, not leastFrance, without taking into account the close relationship that now exists between pensions, unemployment insurance and disability. Reform in one sector cannot meet the challenge of the ageing population in our developed societies.     

Developmentalism in Korea: A Useful Tool for Explaining the Role of Social Security in the Reduction of Poverty and Inequality

It is conventional wisdom that universalism is more effective than selectivism in addressing the problems of poverty and inequality. In providing income security for the elderly, retirement pensions calculated on the principle of social insurance represent universalism and social assistance benefits on the basis of means-test selectivism. Korea has both a contributory pension scheme and social assistance program for the elderly. The social assistance began in 1961. The contributory scheme, the National Pension, started belatedly in 1988 and its coverage expanded to the entire population in 1999. We can, therefore, expect that the social security system, especially the universal pension scheme based on social insurance, has some positive impacts on the reduction of poverty and inequality. This paper, however, raises doubt as to the conventional wisdom and thus reviews the developmental process of the Korean social security system for the aged. It was found that the dominant ideological controversy revolved, not around universalism versus selectivism, but around the option between developmentalism and other strategies. Our empirical analysis showed that the public pension had little impact on the reduction of poverty and inequality, particularly in comparison with advanced welfare states. This is not surprising at all, since poverty eradication and redistribution were not major objectives of the Korean social security system. The controversy between universalism and selectivism was relatively unfamiliar in the policy process of the Korean social security system. Even though the redistributive effect is getting larger as the National Pension system becomes mature, the developmentalist model has been proved to be a more useful tool for explaining the limited role of Korean social security.     

Welfare municipalities: economic resources or party politics? Norwegian local government social programs of the 1920s

This article analyses the introduction of Norwegian local government social security programs for the elderly, disabled persons, widows and single mothers in the 1920s. The role of local government as an agent and initiator of welfare state development has been for the most part neglected within the welfare state literature. Indeed, the first social security programs in Norway were introduced by local governments, affecting nearly half of the population. Even if these programs were not very generous compared with the social security programs of our time, many of them were equal to, or even more generous than, the national pension scheme introduced in 1936. This article examines what distinguished the social security municipalities from those that did not implement such programs, and the variation in generosity profiles. The conclusion is that the main determinant regarding the implementation and generosity of the local social security programs is the political strength of the two Norwegian socialist parties at the time – the Social democratic party and the Labour party – both being too impatient to wait for a national social security plan, and both being willing to mobilise economic resources through taxation and borrowing.     

Pension Provision for Specific Risk Groups: The Japanese Case

The growing variety of possibilities in one life course raises coverage, fairness and social adequacy questions about existing public pension provision. This paper examines problems of drop-out, full-time housewives, carers, divorced or remarried people and those engaged in atypical work in Japan. A possible solution will be a universal basic pension financed by a consumption-based tax. It is also advisable to expand social security coverage of the earnings-related pension to any earners irrespective of their earnings amount, if any. In implementing this provision, an integrated single social security pension number for each person is required, and this has already been introduced in Japan. The 1999 government reform plan for pensions is also mentioned.     

论养老机构中社会工作的介入——基于南通市养老机构的实证调查

随着我国人口老龄化趋势的日益加剧,养老问题逐渐成为一大社会问题,而且影响着经济社会的持续快速发展。但在当前形势下,居家养老模式已经受到现代社会发展的严重冲击和挑战,社区养老模式才刚刚起步,各种机制设施还有待进一步健全、完善。在新旧模式的转换过渡中,机构养老便成为解决养老问题的重要力量。本文通过对南通市养老机构的实证调查,发现了南通市机构养老存在的一些问题,提出了在养老机构中介入社会工作的设想。     

The social protection of the unemployed

Unemployment is the most basic risk covered by social security. Sickness, accident, maternity, incapacity, old age or even death can be considered as special cases of interruption of earnings. Unemployment is the standard case, where a worker loses earnings simply because he or she is unable to find gainful employment, without reference to any particular causality. Nevertheless, the unemployment branch is very often treated rather poorly, in comparison with other branches of social security. In most countries – except the United Kingdom – it was created much later than other branches, and it involves a larger part of assistance, as opposed to insurance. Usually, fewer people are covered against the risk, the conditions for entitlement are stricter, the benefits tend to be lower and shorter in duration, and controls and sanctions are more severe.¹ People are generally worse off when their loss of earnings is the result of a dismissal rather than disease or accident. In this contribution we try to analyse the reasons why unemployment has such a relatively poor status in social security. And we examine the extent to which this difference of treatment can be considered a form of discrimination and, in some cases, contrary to the basic principles of international social law.     

The challenge of pension reform in Georgia: Non‐contributory pensions and elderly poverty

Georgia's national social security system offers almost universal non‐contributory basic pension coverage. The basic pension has, to date, proved effective in dealing with old‐age poverty. But Georgia's fiscal constraints and ageing population also highlight the importance of improving the pension system, in order to ensure its sustainability. This article presents policy reform choices, which suggest that, in Georgia, pension reform might include increasing the statutory retirement ages and reducing the generosity of benefits through means testing. The case of the Georgian non‐contributory basic pension might hold value for some low‐ and middle‐income countries that are considering the implementation of, or expanding coverage under, a non‐contributory pension programme.     

Transferring from the poor to the rich: Examining regressive redistribution in Chinese social insurance programmes

Social insurance promotes progressive redistribution through risk pooling and cross‐subsidy. However, in China, risks and protection are mismatched, with benefits and protection accruing to the privileged while high‐risk groups are inadequately protected. This article reports on a study of the sources of regressive redistribution in Chinese pension, health and unemployment insurance programmes, and discusses the possible cause of this redistribution paradox. It argues that the government has adopted different strategies for welfare reform towards different socioeconomic groups. For the core groups, such as public employees, reform has been characterised by replacing old programmes with new (i.e., a replacement strategy). For marginal groups, the government has handed off its responsibilities to individuals and the market (a retrenchment strategy). This political pecking order of welfare reform is the cause of distorted distributional outcomes. As social policy programmes continue to spread in developing countries, China's case illustrates that they may reinforce existing disparities rather than realise progressive redistribution, risk management and social inclusion.     

Challenging Solidarity? An Analysis of Exit Options in Social Policies

Processes of adverse selection are generally considered as challenges to the viability of the solidarity that has been institutionalized in insurance schemes in the social domain. This article analyses to what extent the introduction of free choice in social policies might trigger processes of adverse selection in modern welfare states. Free choice not only concerns the choice between different providers or different types of services, but also creates possibilities to exit or partially exit social policies that previously were mandatory. Free choice in social policies might contribute to increasing responsiveness in service delivery. However, when the decisions to exit social policies are not distributed equally among the participants in social policy schemes but are related to participants' risk profiles, adverse selection might occur. The common response to the challenge of adverse selection is obligatory and universal participation in health insurance schemes, pension schemes and other social policies. The introduction of exit options as part of free choice strategies thus might threaten solidarity. Although the issue of free choice in social policies has received considerable scholarly attention, the introduction of exit options and its consequences have been analysed less extensively. This article sets out to fill this gap by exploring to what extent the introduction of free choice in modern welfare states has created exit options, and to what extent this triggers processes of adverse selection in health policies, unemployment policies and pension schemes in four European countries: the Netherlands, Spain, Sweden and the UK.     

Hybridization instead of Clustering: Transformation Processes of Welfare Policies in Central and Eastern Europe

Welfare state theories tend to use concepts of clustering for defining the affiliation of national social security systems to overarching worlds of welfare. A closer look at the transformation processes of welfare policies in Central and Eastern Europe shows a great variability among those countries in approximating their welfare states to Western European standards. In the design of their pension systems, their health care provision and their unemployment protection, Central and Eastern European Countries (CEEC) follow different reform paths. Welfare clusters in Western Europe are used as reference models, but no single example applies to all sectors of social security. Thus, a generalizing picture of welfare provision cannot be drawn for Central and Eastern Europe. Instead of constituting a new individual type of welfare arrangement, a hybridization process is observable.     

近十年我国社会保障改革的历史进程与经验总结

近十年来,我国面临的国际国内形势出现了新的变化,社会保障改革在此背景下也进行了新的道路选择并取得一系列成就。2011年开展城镇居民社会养老保险试点工作,这与2009年建立的新农保制度初步构成了我国养老保障制度的基本框架,标志着我国覆盖城乡居民社会保障体系的主要制度都建立起来,是我国社会保障改革和全面建设小康社会的重大进步。总结近十年来我国社会保障改革的基本经验,有益于我们更明确的认识改革的历史与现状,为继续推进社会保障改革、发展社会保障事业奠定重要基础。     

Extending coverage under the Argentinian pension system: Distribution of access and prospects for universal coverage

One of the main challenges facing social policy in Latin American is to guarantee social security coverage for the entire population in the presence of a large informal sector. In Argentina, a regional pioneer in terms of the development of its pension system, more than one third of those of retirement age were without benefits in 2005. Since then, considerable progress has been made in extending coverage thanks to the introduction of a programme that has reduced contribution requirements and allocated benefits to a large number of seniors previously excluded from the system. This article analyzes the impact of this process in Argentina on the level and distribution of coverage, identifies changes in socio‐demographic factors which affect inclusion/exclusion in the social security system, and discusses remaining obstacles to the provision of universal coverage in the medium and long term.