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.     

Pension reforms in EU11 countries: An evaluation of post‐socialist pension policies

This article evaluates the pension policy pathways of the 11 former state socialist nations that have joined the European Union since 2004. Focusing primarily on the post‐2004 period, the analysis discusses the most important measurable outcomes of these countries’ pension reforms, in terms of poverty alleviation, pension adequacy and fiscal sustainability. Going beyond the quantifiable concepts, we also investigate the quality of the 11 countries’ pension systems in terms of equity as well as efficiency, emphasizing the less conspicuous design errors present in these systems. Although these errors have received little attention to date, they may harm pension schemes along several dimensions, including their fiscal sustainability.     

The Retirement Provisions in China,Hong Kong,Singapore and Taiwan: Perspectives on Policy Inputs and Social Outputs

This paper aims to develop an integrated policy index system using a Surface Measure of Overall Performance (SMOP) approach to comprehensively evaluate and compare the policy input and social output of the retirement payment system in urban and rural China, Hong Kong, Singapore and Taiwan. With this, a tool may be developed to help insightfully examine the old‐age income policies and appropriately, and perhaps theoretically in the future, categorize the types of retirement provisions or social security policies as a whole in the East and West. The results indicate that, particularly in urban China, Hong Kong, Singapore and Taiwan, a low level of de‐familization and medium and high levels of gender equality are the common features of these five pensions in China, Hong Kong, Singapore and Taiwan. Furthermore, it is found that the retirement provisions in China, Hong Kong, Singapore and Taiwan can well be divided into two groups based on the level of pension right protection and illustrate different characteristics between them accordingly. In addition, policy implications and suggestions for further reforms of these retirement payment schemes are elaborated in the light of the findings of this policy index system.     

Social security for China's rural aged: a proposal based on a universal non‐contributory pension

Yang Y, Williamson JB, Shen C. Social security for China's rural aged: a proposal based on a universal non‐contributory pension Int J Soc Welfare 2010: 19: 236–245 © 2009 The Author(s), Journal compilation © 2009 Blackwell Publishing Ltd and the International Journal of Social Welfare. China's relative lack of social security coverage for rural elders exacerbates the already severe rural–urban economic disparity, slows the rate of rural poverty reduction, and raises social justice concerns. Our analysis draws on evidence from a number of sources including interviews with experts on China, Chinese government documents, Chinese newspaper accounts, and other sources from other countries. Based on our analysis of what has been tried in other countries and the current situation in rural China, we offer some suggestions for Chinese policy makers. We suggest that, for rural China, a universal non‐contributory old‐age pension deserves serious consideration, and refer to our proposed model as a Rural Old‐Age Social Pension. It will reduce the level of poverty in rural areas and the degree of income inequality between rural and urban areas while simultaneously promoting social and political stability.     

Left to Market and Family – Again? Ideas and the Development of the Rural Pension Policy in China

The rural pension policy in China is characterized by a high degree of instability. In the past 15 years since the introduction of pilot schemes in some regions, the state has been unable to establish a stable institutional framework for rural old‐age security. This article seeks to integrate the theoretical insights from a growing body of international literature on the role of ideas in social policy reform in order to shed new light on the study of Chinese rural pension policy. I argue that the rise of the rural pension scheme and its eventual failure to make consistent progress towards a comprehensive system is directly related to conflicting ideas among bureaucrats with respect to what sort of welfare provision the rural elderly actually need. The fluctuations in this policy realm vividly illustrate the predominance of the policy idea that peasants could still rely on their land and family, supplemented by private commercial insurance, in their old age. Given this alleged self‐reliance on the part of rural residents, the state is very reluctant to set up a comprehensive rural pension scheme. As a result, the old‐age security of the peasants in rural China is standing on very thin ice, and the prospect for more active state involvement in the near future remains dim.     

Implicit debt in public‐sector pension plans: An international comparison

Most countries have separate pension plans for public‐sector employees. The future fiscal burden of these plans can be substantial as the government usually is the largest employer, pension promises in the public sector tend to be relatively generous, and future payments have to be paid out directly from government revenues (pay‐as‐you‐go) or by funded plans (pension funds) which tend to be underfunded. The valuation and disclosure of these promises in some countries lacks transparency, which may hide potentially huge fiscal liabilities to be passed on to future generations of workers. In order to arrive at a fair comparison between countries regarding the fiscal burden of their public‐sector pension plans, this article recommends that unfunded pension liabilities should be measured and reported according to a standard approach for reasons of fiscal transparency and better policy‐making. From a sample of Member countries of the Organisation for Economic Co‐operation and Development, the size of the net unfunded liabilities as of the end of 2008 is estimated in fair value terms. This fiscal burden can also be interpreted as the implicit pension debt in fair value terms.     

基本养老保险覆盖面扩展决定因素实证研究

扩大基本养老保险覆盖面是我国社会保障制度改革的优先目标之一。本文通过对19982003年分省数据的实证分析,发现各省之间的基本养老保险覆盖面的差异,主要是由它们的经济发展水平和市场化程度这两个宏观经济因素与基本养老金给付标准和财政对社会保障补助支出这两个政策因素共同决定的。基于这些发现,考虑到我国经济持续发展和市场化改革深化的趋势,我们对我国社会保障事业的发展持谨慎乐观的态度,并认为在目前,“低水平、高覆盖”仍然是一个符合国情、必须坚持的合理政策选择,地方政府应当在财力许可的范围内,增加对社会保障事业的财政投入。     

Poverty Reduction: The Missing Piece of Pension Reform in Latin America

Employment‐based pension plans constitute the main form of pension provision in Latin America. Although recent pension reform in the region has focused on strengthening these, old‐age poverty remains high in most countries in the region, with older people over‐represented among the poor. The article argues that ensuring old‐age support for poor and vulnerable groups involves a different set of priorities and options for pension reform, namely a strong focus on tax‐financed public cash transfer programmes. Cash transfer programmes focused on poor older people are the missing piece of pension reform in the region. The article examines the experience of the handful of countries with such programmes in place, and draws the lessons for the future of social policy in the region.     

Public Attitudes towards Income Redistribution: Evidence from Hong Kong

The drivers of public support for redistributive policy have stimulated academic debate around the world. The majority of studies use cross‐country surveys conducted in the Organisation for Economic Co‐operation and Development countries to contribute to the debate on whether self‐interest or social values have more influence on public attitudes towards redistribution. Drawing on a phone survey conducted in 2013, this study advances the discussion by investigating public attitudes towards redistribution and social policy changes against the backdrop of buoyant government revenues in Hong Kong. The Hong Kong welfare model, best seen as a parallel to the liberal welfare state, is selective and residual. Contrary to the usual assumption, the social values hypothesis, viewing poverty as societal problems instead of individual reasons, has been supported in the Hong Kong context. It lends support to greater redistribution in a residual welfare state. The policy implications of the findings are also discussed.     

Public pension institutions and old‐age mortality in a comparative perspective

Norström T, Palme J. Public pension institutions and old‐age mortality in a comparative perspective Int J Soc Welfare 2010: ??: ??–??© 2010 The Author(s), Journal compilation © 2010 Blackwell Publishing Ltd and International Journal of Social Welfare. The aim of the study was to estimate the impact of changes in pension rights on old‐age mortality. We made a distinction between two dimensions of pension benefits, one of providing basic security (BASIC), and the other of providing income security (INCOME). Analyses were based on data for 18 OECD countries during the post‐war period. The outcome comprised old‐age excess mortality, defined as the ratio of the mortality rate 65+ to the mortality rate in the age group 30–59 years. The latter was regarded as a proxy for unobserved factors potentially related to old‐age mortality as well as pension rights. The pooled cross‐sectional time series data were analysed through fixed effects modelling. The results suggest that BASIC (but not INCOME) has a beneficial impact on old‐age excess mortality, which was statistically significant. We interpret the results in terms of the poverty‐reducing effects of pension entitlements with a basic security orientation.     

Voluntary affiliation to Peru's individual accounts pension system

One important aspect in the design of social protection is coverage. In Peru, as in most Latin American countries, social security coverage is mandatory only for workers in the formal sector. This article investigates the determinants of voluntary affiliation to Peru's individual accounts pension system. It is found that married males with more than high-school level education living in high income households and with other family members already affiliated to the individual accounts pension system have a higher likelihood of voluntary affiliation. Although the results suggest that family-based safety nets might be substitutes for voluntary participation in the individual accounts pension system, nonetheless, extending pension coverage and addressing poverty remain as challenges for government involvement.     

Pensions in Nigeria: The performance of the new system of personal accounts

In 2004, Nigeria copied the 1981 Chilean pension reform and established a funded system based upon personal accounts. The new system was neither appropriate for a country such as Nigeria, nor did it meet aspirations of improving pension coverage or helping economic growth. The current financial and economic crisis hit the scheme in so far as it hit stock values. However, more important has been the negative real interest rates that can be earned on government bonds and on bank deposits — where the majority of contributions are invested. Bank scandals and rising fiscal deficits do not breed confidence in the system or the government's ability to deliver meaningful benefits in old age.     

Low Public Expenditures on Social Welfare: Do East Asian Countries have a Secret?

This paper explores the sources of low public expenditures on social welfare in Japan, Korea, Taiwan, Hong Kong and Singapore. Six factors are analysed based on aggregate data: the public/private mix of welfare programmes, the age structure, the maturity of old-age pension schemes, the population coverage of social security, the relative generosity of social security and the role of enterprises and families as alternative providers of welfare. The evidence allows putting some conventional statements about the virtues of East Asian welfare states into questions. Public expenditures on welfare are bound to rise a lot in Japan, Korea and Taiwan, while the level of protection in Hong Kong and Singapore is well below the standards of Western countries.     

The impact of international migration on the public pension system: The case of Portugal

This article analyses the impact of replacement migration on the financial sustainability of the old‐age pension system in Portugal, a country with one of the largest ageing populations in Europe. We do this using demographic forecasts and prospective exercises for the evolution of the Portuguese economy. During the 2015–2060 period, our results evidence the positive impacts of international migration on old‐age pension system financial balances, reaching over 3 per cent of GDP after 2045. Moreover, even when taking into considering the low dynamics for the Portuguese economy, replacement migration is an important input to improve pension system financial sustainability.     

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.     

Comparing income poverty gap and deprivation on social acceptance: A mediation model with interpersonal communication and social support

In many developed countries or regions, wide income disparities increase the difficulty in reducing poverty. In their day‐to‐day lives, poor people often feel less accepted by the society. The failures in communicating with social groups and receiving social support lead to negative consequences on individual well‐being and higher level of social exclusion. Based on the debate upon alternative approaches to conceptualizing and operationalizing poverty, this study attempts to verify a mediation model with data from a household survey (N = 1,202) in Hong Kong. The results of structural equation modelling reveal that deprivation is a more powerful indicator than income poverty for specifying the negative relations of poverty with interpersonal communication, social support, and social acceptance; the negative impact of deprivation on social acceptance can be reduced by two significant mediators of interpersonal communication and social support. The results are discussed in terms of directions for future research and policy and welfare intervention.     

An actuarial balance sheet of the Swiss old‐age pension scheme

Following the recent update of the international System of National Accounts (2008 SNA), internationally comparable estimates of accrued‐to‐date pension liabilities (ADL) of unfunded social security pension schemes will soon be available in the supplementary table to the National Accounts. Against this background, this article analyzes the medium‐term sustainability of the Swiss old‐age pension scheme (Alters‐ und Hinterlassenenversicherung – AHV). This is achieved by estimating a “Swedish” actuarial balance sheet, which compares pension liabilities with the explicit and implicit assets of the pension scheme. Our results show that the current financing of the AHV is unsustainable, with about 30 per cent of the liabilities not backed by corresponding assets. In order to close this financing gap either the contribution rate should rise from 8.4 per cent to 12 per cent or all pension liabilities should be cut by about 38 per cent.     

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.     

Ending poverty in Mongolia: From socialism to social development

While recent literature on social welfare has included Asian countries, less is known about low‐income and former socialist countries in Central Asia. This article combines a documentary‐historical method with a value‐critical approach to analyze Mongolia's social policy response to poverty. Mongolia is unique in Asia because it transformed from nomadic pastoralism to socialism without a phase of capitalist industrial development. The case study found that Mongolia lost social welfare when it transitioned from socialism, a statist model, to market liberalism and multiparty democracy. In the 21st century, Mongolia has been aspiring to promote social development by redirecting mining revenues to a human development fund. Mongolia is potentially an exemplar of social development strategies affirmed at the United Nations Conference for Social Development (Rio+20) regarding a green economy for inclusive growth and poverty elimination. Future social welfare research should consider the importance of sustainability. Key Practitioner Message: ● Global standards for tracking poverty alleviation will be integrated with sustainability measures beginning in 2015; ● Mongolia hopes to foster social development and sustainable livelihoods by reinvesting revenues from mining into human capital and health care; ● To sustain future generations, social policy needs to consider the relationship between natural capital, social capital, and financial capital.     

Public Satisfaction with the Health System and Popular Support for State Involvement in an East Asian Welfare Regime: Health Policy Legitimacy of Hong Kong

The legitimacy of social policies has gained increasing attention in the past decade, against the backdrop of fiscal austerity and retrenchment in many nations. Policy legitimacy encompasses public preferences for the underlying principles of policies and the actual outcomes as perceived by citizens. Scholarly knowledge concerning the legitimacy of health policy – a major element of modern social policy architecture – is, unfortunately, limited. This article seeks to extend the scholarly debates on health policy legitimacy from the West to Hong Kong, a member of the East Asian welfare state cluster. A bi‐dimensional definition of health policy legitimacy – encompassing both public satisfaction with the health system and the normative expectation as to the extent of state involvement in health care – is adopted. Based on analysis of data collected from a telephone survey of adult Hong Kong citizens between late 2014 and early 2015, the findings of this study demonstrate a fairly high level of satisfaction with the territory's health system, but popular support for government responsibility presents a clear residual characteristic. The study also tests the self‐interest thesis and the ideology thesis – major theoretical frameworks for explaining social policy legitimacy – in the Hong Kong context. Egalitarian ideology and trust in government are closely related to both public satisfaction with the system and popular support for governmental provision of care. However, the self‐interest thesis receives partial support. The findings are interpreted in the context of Hong Kong's health system arrangements, while implications for the territory's ongoing health policy reform are discussed.