Russia: Pension Fund has
Started Paying out Compensations (December 27, 2004)
(Article in Russian)
Genadyi Batanov, the head of Russia Pension Fund on
Ministry of Health and Social Development meeting said
that the Pension Fund had started paying out money
compensation to pensioners. About 15 million persons
will receive the monthly compensation payments. For
2005, the government plans to spend about 99, 9 milliard
rubles for these monthly pensions.
Russia: Putin:In Market Economy
Money Compensation is More Effective then Benefits
(December 23, 2004)
(Article in Russian)
Putin, the President of Russia talked about pension
reforms during a recent Kremlin press conference and
underlined the advantages of money compensation to
people who used to have “natural“ (or public) benefits.
He said that new market economy made the old system of
government support to pensioners ineffective. Putin also
noted that the amount of budgeted money for social
support of pensioners would be 6 times more than it used
to be. The President reminded pensioners about their
right to keep some “natural” benefits during 2005. Free
transportation and medical treatment are among them.
Serb Pension Law Rehabilitates WW2 Chetniks (December
21, 2004)
Serbia's parliament approved a law on Tuesday offering
pension rights to former members of the World War Two
Chetnik guerrilla army, which many in former Yugoslavia
remember as backing the ruthless Nazi occupation. The
ensuing debate about whether to grant or deny pensions
to older persons based on their willing or unwilling
participation in the wars of the 1940’s demonstrates the
long debate between retribution and reconciliation.
Latin America: Pension
Reforms Hit Women Hard (December 20, 2004)
Neo-liberal changes to pension systems in Latin America
have heightened gender-based discrimination and will
lead to greater poverty and vulnerability among women if
corrective measures are not adopted, according to Sonia
Montaño, chief of the ECLAC Women and Development Unit.
Women face higher levels of unemployment, earn lower
salaries and are often employed in the informal sector
so their pension payouts are also lower when they
retire. Besides, they face discrimination on monthly
payouts which are lower because they tend to live
longer.
China: It Will
be the First Time of the Year that the Distribution of
Pension is on Time (December 18, 2004)
(Article in Chinese)
Beijing – According to news from China News Daily, the
Labor Protection Department held the National Labor and
Society Protection Conference in Beijing on Dec 7th. At
the conference, they summarized what they had done in
the past year and laid out what will be done for the
coming year. Siling Zhen, the secretary for the
Department of Labor Protection, said that thanks to
greater employment, the Department will be able for the
first time to distribute pensions at the set date.
World: Age and security: How
social pensions can deliver effective aid to poor
older people and their families (2004)
This report makes a strong case for providing universal
non-contributory pensions - "social pensions" - to older
people in developing countries. It describes how social
pensions effectively target aid, reducing the poverty of
older people and the families they so often support.
Russia, Siberia: Pensioners
Apply to Human Rights Committee More Often (December
11, 2004)
(Article in Russian)
Tamara and Vladimir Chyub are among many Russian
pensioners who have recently applied to the Irkyutsk
regional human rights committee in an attempt to defend
their rights. When they came back from the little summer
house where they spend 6 months a year growing food,
pensioners did not receive the usual official
re-calculations for their winter apartment’s utilities.
It means that they have to pay for 6 months of utilities
that they did not use. These attempts to struggle for
their rights show how much the conscience of Russian
elderly people has changed. No longer will they sit and
wait patiently until somebody solves their problems.
Great Britain: Many Britons Sour on Private Pension
Experiment (December 9, 2004)
Adair Turner, a senior Merrill Lynch banker here who
once led Britain's main employer group and has now been
given responsibility for overseeing a wide-ranging
review of the country's retirement benefits, has some
advice for the Bush administration as it moves forward
with its own plans to overhaul Social Security. His
cautionary words on introducing private accounts to the
old-age pension program are noteworthy because, in
essence, Britain has been there, done that.
China: A new Guangdong Province Law Will Use Monies
Derived from a Farmers’ Sale of Land to Pay for Their
Pensions. (December 8, 2004)
(Article in Chinese)
The Guangdong Province Senators have proposed that the
pension system for farmers whose lands have been used
should be included in the social protection system and
should be connected to the basic pension system for
urban residents. At the same time, the law should be
enforced to make sure that budgeting for the farmers’
pensions should be a priority. Among the funds for the
farmers’ pension, the government investment, which will
be from lending the lands, should not be lower than 30%
of the total funding. The communal funds, which will be
from the land compensation, should not be less than 40%
of the total funding.
China: In Shanghai, Some 530,000 Farmers Participate
in the Town Social Protection System, Which Includes
the Social Protection System for the Rural Area
(December 7, 2004)
(Article in Chinese)
Yixing Yuan, the director for the rural area committee,
said that 80,000 farmers among the total of 150,000
farmers in the suburb of Shanghai, are doing non-farm
jobs. There are 15,000 farmers who moved to the city
this year. In the future, the farmers who are doing
agricultural works will continue to diminish. To
complete the rural area social protection system,
530,000 farmers will participate in the town social
protection system, which includes the social protection
system for the rural area.
Ukraine: “Aval” Explains why the Pensions were not
Paid (December 3, 2004)
(Article in Russian)
The recent delay in paying pensions in Ukraine can be
explained. “Aval” says that the Pension Fund of Ukraine
stopped the delivery of money to the bank for some time.
However, in reality, due to the recent election crisis
in Ukraine, opposition forces had blocked the building
of the Pension Ministry. The pensioners of all Ukrainian
regions began receiving money again since December 3 as
soon as the Pension Fund deposited its payments to the
bank.
Russia: In 2005 Pensions will be Increased Twice
(November 30, 2004)
(Article in Russian)
Genadyi Batanov, the chairman of the Pension Fund board
has announced the indexation of the pensions of Russian
citizens. The indexation is supposed to be conducted
twice next year- in April and in August- and the total
amount of the indexation will be 233 rubles. Batanov has
also promised that the monetary compensation (the money
pensioners receive instead of public benefits) will also
be indexed starting from January 2006.
Ukraine: Azarov: Government is Ready to Work
Constructively with Opposition
(November 30, 2004)
(Article in Russian)
Nikolay Azarov, the Minister of Finance, says that in
spite of the budget deficit, the planned increase in
pensions in 2005 will be carried out. “The deficit in
the pension fund that totals 7,5-8 milliard Ukrainian
hrivnas will be covered by of state budget,”
assures Azarov. He recently announced his readiness to
work with the opposition.
China: Enterprise Pension Market Will Have a Balance
Between Income and Investment of Rmb 1,000 Billion by
The End of This Year (November 26, 2004)
(Article in Chinese)
Hao Zhang, the vice president of Social Protection
Budget Management, which is a branch of Dept. of Labor
and Society Labor Protection, said yesterday that it is
the first time that a balance between income and
investment will reach RMB 1,000 billion by the end of
the year. In the beginning of the next year, the
industry pension management organization qualification
will come out. By then, the industry pension will be
activated. At that point, industry pensions will start
being put into the market.
Russia: What if They don’t Bring Compensation Money?
(November 26,2004)
(Article in Russian)
Mihail Zybarov, the Minister of Health and Social
Development announced the creation of the federal
register of older persons who will receive a monetary
pension instead of the public benefits. This database
includes 13 million people who from January 1, 2005,
will receive a monthly financial sum instead of the
free transportation, housing, and medical care that
they had previously enjoyed during the Soviet and
post-Soviet period.
This article provides the official table that shows
the categories of persons and the amount of money each
category will receive.
Argentina: Controversy with BNL Payments (November
18, 2004)
The Banca Nazionale del Lavoro (BNL) was told to
abstain from modifying the corresponding currency of
the country of origin (Italy) of pension payments,
unless expressly requested by the beneficiaries. The
BNL pays pensions to more than 70.000 Italian retirees
residing in Argentina which, on average, collect 300
euros monthly. Authorities accuse BNL of charging
commission for currency conversions for these
transactions, without having asked the beneficiaries.
Such commissions are doubled when the payment is
received in pesos. These amounts are calculated by the
arbitrary currency change of these pensions, first to
dollars and then to pesos, at a rate determined by the
same bank. The BNL charged an exaggerated commission
for these conversions and the retirees were neither
informed or requested such conversions.
Uruguay: World Bank
Points Out Advances in Pensions Systems (November 17,
2004)
In many Latin American countries the percentage of the
active population that contributes to the pension system
is very low, which increases the future risk of a high
number of elderly people living in poverty. This is
partly a consequence of having structured pensions
systems after European models, where the formal economy
includes more than 90% of the population, to the Latin
American reality, which is characterized by having a
high fraction of workers in the informal economy.
Obligatory contributions, another feature, is in many
cases estimated to be too high. Along with decreasing
the obligatory portion, countries want to increase the
voluntary contributions to retirement plans. The
necessity of reforms to the pension systems accompanied
with a solid fiscal position to avoid short-term
turbulence has depended on each country, but the cases
of Peru and Chile have had a positive result in growth
in volatile markets.
Venezuela: OAS Admits Claim of Viasa
Retirees (November 13, 2004)
(Article in Spanish)
The Interamerican Commission for Human Rights (CIDH)
agreed to hear the legal case involving the defunct
Viasa airline that was the most important airline in
Venezuela. The supranational Organization of American
States has been asked to protect the guarantee that
Venezuela will honor the pension requirement within a
period of 60 days. The nation’s single duty is to reach
a settlement on pensions, compensations and a guarantee
of economic stability for the future of retirees. Among
the most important aspects of the decision of the CIDH,
the State representative must recognize that there was a
violation of rights, even if he alleges that they cannot
be paid due to bankruptcy. It must be pointed out that
there are at least 1,200 workers who await justice and 8
retirees who already died without seeing it.
Burkina Faso: “The Government Exploit the Misery of
the Workers” (November 11, 2004)
(Article in French)
On Tuesday, November 10th, the deputies of the National
Assembly had a meeting to adopt a proposed law to change
three articles of the Social Security Code for workers
in the semi-public and private sector.
The President announced in his 2004 year end speech this
increase in the retirement age. If this increase in
deposited into the banking accounts of the state
employees, the private and semi-public sector will have
to wait.
China: The Standards Governing Industry Pensions
are not Available Yet but Will be Available Next
Year (November 11, 2004)
(Article in Chinese)
The Department of Labor and Social Protection and
China Securities Regulatory
Commission collaborated and released, “The Report
for Industry Pension Investment Issues,” which is
simplified as “The Report.” The Report
set off a debate among financial organizations. The
Tentative Industry Pension, the Industry Pension
Management and The Report form the industry pension
policy framework.
Russia: Single Social
Tax will be Repealed but Not Very Soon (November 2,
2004)
(Article in Russian)
Arkadyu Dvorkovich, the head of the President’s Expert
Commission, reported that the Single Social Tax which
currently finances medical, pension and the social
insurance systems was likely to be substituted for
insurance payments. The employers have wanted this
policy for three years. This will let them finance
health care and social protection of their own employees
only. So far, the money that they pay into the system
helps fund the entire system. But this contribution is
insufficient since there are 62 million working people
in Russia whereas 83 million are non-workers. So, before
making the step toward applying the money to insurance,
the government will have to locate funding for current
pensioners and to cover the health treatment of the
elderly, children and disabled.
Russia: Let’s Beat Seniority by Non-
insurance Period (November 1, 2004)
(Article in Russian)
The Russian government is planning to include the army
service period and 1.5 year of maternity list in
seniority for the account of working years necessary to
get the pension. This bill will likely be ratified
before January 1, 2005.
China: China has Increased its
Pension: Those who Retire Before the End of this
Year Will Get the Increase. (October 28, 2004)
(Article in Chinese)
The Department of Labor in China announced increases
in the old age pension. Those who retire before the
end of this year (2004) will receive the new amount.
Currently local governments are putting the new
pension provisions into effect.
Chile: Treaties for
Retirement (October 27, 2004)
(Article in Spanish)
Working for a lifetime and retiring in Chile seems
typical, but in an increasingly globalized world many
citizens work and register their provisional pensions in
other countries. For that reason, Chile maintains
bilateral treaties with various countries, which favor
those who have worked and paid pension fees abroad. They
also apply to people who are temporarily sent oversees
by their employer, so that they can keep accumulating
benefits. The importance of these treaties comes in the
case of people soliciting their minimum guaranteed
pension, after contributing for 20 years so that their
work abroad is counted.
Argentina: Retirees and State Employees will Charge to
Impulse Demand (October 23, 2004)
(Article in Spanish)
The income and pensions of December’s budget, plus the
Christmas bonus for retirees and state employees, will
be paid this month. This measure will inject $3,700
million by year’s end into Argentina’s economy. This
year retirees and state employees will claim their
pension 13 times, but will only do so 11 times in 2005.
The announcement forms part of the government’s measures
to distribute the fiscal surplus, the result of a series
of adjustments without precedents. Thus far, this year
the surplus comes to 16, 815 million and it is foreseen
that, even with these new measures, 2004 will close with
a savings of 18,000 million. This number is far above
the 10,800 million promised to the International
Monetary Fund this year.
China:
Beijing Implements the Pension System by Building up
a Multi-layer Pension System (October 22, 2004)
(Article in Chinese)
Compared to those who stop working in the civil
sector, those who retire from industries receive a
much smaller pension. Anming Sun, the vice mayor of
Beijing, reported on these issues to the City People’s
Representative Committee. He promised that the city
government will figure out a new pension system by the
end of this year.
Russia:
How to Survive? ( October 22, 2004 )
(Article in Russian)
The Ministry of
Health Care and Social Development together with the
Pension Fund is working on suggestions about
extending the pension age. The demographic situation
in Russia
calls
for this change, according to some policymakers. There are
72 pensioners for 100 workers currently and this
figure will turn into 85 till 2024. Evgenyi Yasin,
the head of the top level Russian economic policy
institute, claims that in 20 years
Russia
will
not be able to take care of pensioners at all. On
the other hand, Leonid Rubakovsky, the director of
the center of social demography at the institute of
socio-political research argues that discussing an
extension of the pension age until 63 years (men),
and 60 years (women) is not very ethical in a
country where the average life span is 58 years for
men and 63 years for women.
Germany: Germany to Deregulate
Occupational Pension Funds (October 22, 2004)
In order to transfer the EU pension directives into
Germany’s national law, the German finance ministry has
created a draft law to deregulate the country’s two
occupational pension funds known as Pensionskassen and
Pensionsfonds. Though under the current law,
Pensionskassen may invest up to 35% of their holdings in
equities, the measure will remove traditional
restrictions on how the funds invest their holdings, as
the funds will be able to operate anywhere in the EU.
The draft law “marked a milestone in the creation of a
single European financial market,” said Barbara
Hendricks, state secretary in the finance ministry.
France: Retiree Anger: They Hold a
Demonstration To be Heard
(October 21, 2004)
(Article in French)
French pensioners held a series of demonstrations on the
21st and the 22nd of October. They organized about one
hundred demo’s throughout the country in La Rochelle,
Nimes, Toulouse, Quimper, Bordeaux, Montpellier,
Grenoble, Metz, Lyon, Rouen, Le Havre and Paris. They
protested against their loss of purchasing power due to
how pension increases are calculated and against major
changes in health insurance. Noting the sharp increases
in cost of housing, they demanded a pension increase. At
present, retirees make up one person in five among the
French population.
China: China Urged to Address Ageing
(October 21, 2004)
China has a big challenge to accommodate over the next
years: its rapidly ageing society. Indeed, by 2050 China
is expected to have 400 million senior citizens, making
up a fourth of the total population. Mr Zhao, who wrote
a book about this situation, The Silent Revolution, says
that China has to care about its older persons and to
find solutions to harmonize the increase of the ageing
population with the growth of the younger population.
UK: Government Admits Women’s
Pensions a Scandal (October 21, 2004)
Alan Johnson, the UK’s Work and Pensions Secretary,
called for a “Citizen’s Pension” in order to provide the
same benefits to women regardless of how much they work.
Women in the U.K. form the majority of the poorest
pensioners, because the state pension is based on
National Insurance contributions and many women often
stay home to raise children and look after the elderly.
As a matter of fact, 83 percent of retired women have an
income of less than £1,000 a month, compared with 58
percent of men. While many citizen groups including Help
the Aged advocate Johnson’s “Citizen’s Pension” plan,
the plan is incompatible with the UK’s traditional
pension system of means testing, which Johnson insists
to be preserved. On the other hand, experts believe that
in order to pay for the Citizen’s Pension, the state
pension age has to be raised to 67.
Peru: Kuczynsky: The Bond
Payments to Retirees is Insured (October 20, 2004) PIC
(Article in Spanish)
Pedro Pablo Kuczynski, Minister of Economy and Finance
of Peru, assured that pensions were not endangered even
when the National Public Savings Fund (Fonahpu), where
the bond payment for retirees come from, will be lacking
a mayor contribution this year. The missing support
comes from Electroperú, the main generator of
electricity of the country, due to a drought and its
consequent diminished on energy production. Nonetheless,
the pensions and bond payments are insured by the State
and therefore, will not be affected.
Israel: Court Rules Pension Funds
Discriminate Against Widowers (October 19, 2004)
The National Labor Court ruled that pension fund rates
which alloted lower allowances to widowers than those
paid to widows are discriminatory. The Labor Court's
decision came after Uri Fidelman, whose wife Tzipora
died in March 1997, appealed to the court to receive an
allowance identical to the sum a widow would have
received.
“According to the fund's Ordinance 35, widows unable to
provide for themselves receive 40 percent of the
spouse's salary, whereas the sum alloted to widowers was
set at 50 percent of the wife's pension." The judges
stated that pension fund policies "are discriminatory in
a manner which is unacceptable.”
Russia: Increase in Pension, Other
Funds to Fail Solve Social Problems (October 19,
2004)
“The budgets of the Russian Pension Fund and funds for
social insurance as well as of mandatory medical
insurance are to increase next year. However, some
social problems will remain.” Roundtable participants
tried to mediate and were dissatisfied about the change
in the payment of allowances for temporary disability,
for example. “This should not be done this way,”
claimed members of the Federation Council Committee on
Social Policy.
UK: British Pension Crisis (October 18,
2004)
A large number of British workers stop earning incomes
at a relatively young age, with the average retirement
age being 62 years old. Accordingly, the implementation
of some “radical policies” are urgently required to
solve the ongoing pension crisis in the U.K. Measures
such as substantial increases in taxation to pay for
higher pensions, compulsory savings in the private
sector, and extension of the average retirement age have
been heatedly discussed by many government officials
along with Prime Minister Tony Blair. GAA will follow
how the U.K. will address providing pension support to
its older citizens.
Venezuela: IVSS Requests Budget
Reorganization (October 14, 2004)
(Article in Spanish)
From the 2,7 billion bolívares assigned budget of the
Venezuelan Institute of Social Security (IVSS), 50% has
already been commited and part of the funds have been
used to increase salaries and pensions, cancel out debts
and fund related associations. The daily collections are
allocated to medical uses, increasing investments in
infrastructure and improving information technology.
However, the IVSS has asked the Finance Ministry for a 5
billion bolívares budget for 2005, with the objective of
improving their work. The institute has invested more
than 40 million bolívares in renovating infrastructure,
such as hospitals that did not even think they could get
air conditioning
UK: Australians Do It with Compulsion (October 13,
2004)
It has been 12 years since Australia introduced
compulsory pension saving in the private sector. Now,
more than 90% of Australian workers have about 9% of
their salary withheld for pension saving. In addition,
forced pension saving has definitely transformed the
Australian pension market in a positive direction,
supported by the fact that their household net saving as
a share of GDP now stands at about 2% higher than it
would have been without compulsion. The U.K., facing a
serious pension crisis, examines the pros and cons of
the Australian forced saving method, in order to
determine if the country should follow the similar path
to Australia.
UK: Pensions Crisis: Your Experiences (October 8,
2004)
A major government commission will report on the crisis
in the British pension system. Eight million people have
no pension or savings at all. There is also a shortfall
of £27 billion in the amount people are saving for old
age. At least half of today's pensioners don't have
enough money saved for their old age and that figure
could rise to more than 80% by 2050. Experts have warned
that the only way to balance the books will be for
people to work further into old age.
Are you worried about the pension crisis? Do you have a
story that you would like to share? Are you facing your
own pension crisis? Where did it all go wrong? What
should the Commission recommend? This article is a
collection of testimonies, of opinions about all these
questions from England.
France: Pensions : No Matter How Old You Are You, You
can Learn (October 4, 2004)
(Article in French)
A meeting planner is a good way to continue to work. On
your own rhythm. A lot of people dream about it, some of
them do it, but few are successful. Most future
pensioners think a consultancy would fill their desire
to work using their skills. However, age discrimination
abounds and most pensioners can find such positions on
ly through a personal connection. Very often, an
experienced manager succeeds with such help. But very
often too, it stops here.
Developing Countries: Age and Security: How Social
Pensions can Deliver Effective Aid to Poor Older
People and Their Families (2004)
This report from Help Age International makes a strong
case for providing universal non-contributory pensions -
"social pensions" - to older people in developing
countries. It describes how social pensions effectively
target aid, reducing poverty of older people and the
families they so often support, and much more.
UK: Raise Pension Age to 67, Say Blair Allies (October
10, 2004)
The Institute for Public Policy Research and the
Pensions Commission, closest advisory groups to Tony
Blair, have suggested that the retirement age be
increased to 67 by 2030, in return for the increase in
basic state pension payment. Even though the government
has been opposed to the idea of raising the retirement
age, Britain now faces a serious pension crisis in
financing, and a structural reform of the pension system
is needed to solve the crisis. According to the
proposal, the basic state pension will be increased by
about one-third to reach £100 a week for a single
person. The abolition of means testing tradition has
also been discussed.
Russia: Statistics’ Inaccuracy
(October 7, 2004)
(Article in Russian)
According to the last census, there are 145 million
people in Russia. Among them, 44 million live (30%)
under poverty line. These are mostly the pensioners.
Nevertheless, not all the pensioners are living in
misery. Retired high state and military officials as
well as diplomats get 9-12 thousand rubles. The
article’s author suggests conducting an experiment
requiring State officials who legislate such a low
pension to try to survive on that amount for even a
single month. Not a bad idea for all decision makers on
pension levels across the globe!
England: Tories to Restore
Pensions Wage Link (October 6, 2004)
The Nationwide building society’s research showed that
“an estimated four out of 10 people in the UK think they
will not have enough income for their retirement.”
Following this, the Conservatives pledged to reintroduce
the link between pensions and earnings, which they
scrapped more than two decades ago. Mr Willets,
spokesman of the Conservative party, added that the
biggest discrimination in the UK is not race or religion
but age. He called on charities to defend the rights and
opportunities of the older people, but didn’t explain
how his party will do the same.
Africa: Social Foresight in
Africa: Pension, a Nightmare (October 6, 2004)
(Article in French)
Depending on the country, pensions in Africa differ.
Nevertheless, a commonality exists in all African
countries: the difficult conditions for the pensioners.
While it is hard to obtain a pension in the first place,
many who have one consider it a “punishment.” Pensions
are small and don’t allow for a decent way of live.
After many years of hard work, most pensioners feel the
system doesn’t provide for a normal continuation of
their lives.
Japan: Corporate Pension Asset
Growth Slows in Japan (October 5, 2004)
Both the growth rate of corporate pension programs in
Japan slowed down and the balance assets held in those
programs declined in the second quarter of this year,
according to Asia Times. The downward drift reflects the
pause in stock prices. As of June 30, stocks represented
29.5% of the total asset balance, compared with the
rising number of 40.3% for cash and deposits. Should
stocks make up such a large percentage of the portfolio?
Paraguay: Chile Will Investigate Pensions to
Repressors (October 4, 2004)
(Article in Spanish)
Some torturers of the Chilean military dictatorship
(1973-90) are allegedly receiving special pensions for
“postwar stress”. The government has begun to
investigate these allegations and their legality,
because it is questionable whether or not one can charge
for having a stressful past, even when these individuals
were the instigators and not the victims. But
apparently, there are already ex-military personnel
benefiting from these special pensions which are almost
double the normal ones. The government has yet to
announce plans to make corrections to the aforementioned
pensions.
UK: Is Your Pension This and Weak, or Strong and
Well-Defined? (October 4, 2004)
Many large companies in the UK discourage new employees
from joining a company pension scheme in order to save
on the extra costs, according a study conducted by the
Pension Institute at Cass Business School. Employer
tactics include setting contribution levels too high for
newcomers, limiting information, and holding briefings
outside business hours. Furthermore, the level of
employer contributions into the new defined
contributions is far lower than their contribution into
its predecessor, making an annual cash difference of
several thousand pounds. “This is simply not fair,” says
Tom Powdrill, senior policy officer at the Trade Unions
Congress.
EU: Training Could Aid EU Pension
Crisis – Institute (October 4, 2004)
Life-long training process may help solve the European
Union’s pension problem, according to the European
Institute of Public Administration (EIPA). Introduction
of life-long learning program will make workers more
flexible and employable for longer, thus ultimately
improving the pension situation. In addition, Roger
Hessel from EIPA says “citizens should be given more
information about their pension entitlements,” such as
the Swedish government’s efforts to send orange
envelopes to inform workers of their pension situation.
Chile: The Roads to Pension
(October 4, 2004)
(Article in Spanish)
The Chilean pension system offers various options in a
way that at the end of a career of any number of years,
one may end with many different results. Opting for any
one of the pension modalities offered by the system
demands a careful analysis. One bad decision may
translate into a very small retirement or even losing it
all together. This system is highly complex and its
study must be done early in the career of the
individual, and not later on when retirement begins to
be considered.
Retraite: Plus de 300 000 Canadiens
de 65 ans et Plus Travaillaient en 2001 (October 4,
2004 )
(Article in French)
The notion of retirement changes quickly. More and more
Canadians choose to work during their retirement.
According to Statistique Canada, a lot of persons like
their job and want to continue to work. But there are
others who don’t stop or can’t stop for economic,
psychological or other reasons.
France: Le Minimum de Retraite de Base Auquel Vous
Avez Droit (Le 2 Octobre 2004)
(Article in French)
In spite of they worked during several years, a lot of
persons can only have a very little pension which is now
the minimum of contribution ( indeed, 40 % of the
pensions are concerned by this revaluation ). It’s
important to know the minimal level of pension that the
older persons can have, and what are the variations
about that.
Russia: Benefits for Money (October
2004)
(Article in Russian)
In a shocking development, Petersburg senior citizens
have learned that the government wants to convert social
benefits that they now receive into a monetary
compensation—which will not buy equivalent services.
Ironically titled, “On steps towards social support of
some citizens of Petersburg,” the bill has been approved
in its first reading. Russian language readers can see
the official explanations and comments from N.
Grishkevich, Manager of Petersburg’s branch of the
Russia Pension Fund, I. Timopheev, Member of the Social
Commission at Petersburg’s Legislative Assembly, and A.
Redko, Member of the Health and Ecology Commission at
Petersburg’s Legislative Assembly.
Pension de Réversion : Les Raisons
de La Colère (September 27, 2004 )
(Article in French)
Published discreetly during this past summer, this
decree modifies the way of calculating pensions
beginning in July 2006. This change worries many people.
Trade unions and organizations that represent older
persons have reacted strongly. They focus on the risk
for the middle class widowed who see their rights
threatened.
Japan: 40,000 Firms in Pension Pullout Check
(September 27, 2004)
Due to the increasing number of businesses withdrawing
illegally from their employees’ pension programs, the
social insurance agency launched a nationwide
investigation into suspected cases of those illegal
withdrawals. Under the Japanese pension system, private
companies with five or more employees and all
corporations are obliged to join the program, but more
and more companies are filing withdrawal applications
pretending they had closed or suspended their
operations, in order to avoid the premium payments.
According to the law, they have to switch to national
pension programs when companies withdraw from the
employees’ pension programs, but many of those who
illegally withdraw do not do so, and thus, employees
could end up ineligible for pension benefits.
Ireland: Bank of Ireland Warns – 1M
Have No Pension Plan (September 27, 2004)
Almost one million Irish workers do not have a provision
for a pension. Though many of those have taken up
Personal Retirement Savings Accounts that was introduced
in early 2003, they are not saving enough either, warns
the Bank of Ireland Life. “Consumers [need] to provide
adequately for their retirement in order to guard
against the financial risks of old age,” says Brian
Sullivan, pension manager of the Bank of Ireland Life.
Global Action suggests that a compulsory public social
insurance system should replace the profit-hungry
personal retirement accounts.
Colombia: Special Regimes in
Pensions will only Last until 2010 (September 27,
2004)
(Article in Spanish)
In Colombia the number of people receiving pensions is 1
million, out of the 4 million persons who are old enough
to receive it. There are 11.5 million people affiliated
with the pension program of which only 5.2 million pay
contributions to the pension system, out of a total 20.5
million people who are economically active. Why?
Informal and irregular collection of contributions and
bad economic times have created unemployment and
affected the trustworthiness of the pension system. The
annual payout of monthly pensions is 1.1 billion pesos.
Current pensioners will not be affected by these
proposed changes. According to actual projections, their
elimination of these categories will reduce the
operational deficit by 12.9% between 2004 and 2005.
Russia: The Elderly of Tver will Take Part in the 4th
Congress of Russian Pensioners Union( September 24,
2004)
(Article in Russian)
The Pensioners of Tver have prepared seriously to
participate in the 4th Congress of the Russian
Pensioners Union that will take place in Moscow on
September 25. They also have high expectations to
establish the status of “the children of the war” that
would be the necessary condition towards the civil
society.
Uruguay: Proposed Augmentations on Salaries for the
Calculations of Pensions for Disability and Old Age
(September 23, 2004)
(Article in Spanish)
The proposed modifications to the pension system take
into account if a person asks for a pension for
disability or old age (more than 70 years old). The
authorities will consider incomes of the family, both
those who live and don’t live with the prospective
pensioner. The State wants to change the criteria to
decide on assistance. Until now, this calculation was
done according to strictly economic and mathematical
means. Now, the State wants to impose a means test. What
will it cost the bureaucracy to implement such a means
test? Most governments find it more costly to pay for
inspectors than simply honoring the human rights of
older and disabled persons.
Russia: We Will See (September
23, 2004)
(Article in Russian)
Herman Gref, the minister of economic development and
trade, guided by “the care” for pensioners’ money
suggested launching a new State regulating agency that
actually will take all accumulated money of the Russian
citizens under the age of retirement. If this project is
ratified then Russian pensioners will not have any
choice concerning their money investments. So far they
still can choose between state and private companies.
Ukraine: 11,4 mil. Citizens of
Ukraine Get Pensions that are Under the Subsistence
Level. ( September 22, 2004)
(Article in Russian)
Boris Zaichyuk, the chairman of the Pension Fund of
Ukraine is aiming to help citizens whose pensions’
level is less than 284 hrv.69 kop. that is under
subsistence level. The money from the Pension Fund of
Ukraine as well as from the State Budget is supposed to
be used for this purpose.
Canada: Stats Can Finds More Women
Joining Pension Plans (September 22, 2004)
The number of women registered in a public pension plan
increased by 2.4 percent in 2002 and almost reached 2.57
million, according to Statistics Canada. Growing
employment opportunities for women in the public sector
explain the increase. “Women made significant gains in
public administration, educational and health care
services, retail trade and finance, insurance and real
estate,” says Stats Canada.
Russia: Highly Strict Pension
(September 21, 2004)
(Article in Russian)
More then 200 elders currently live in 3,000 so-called
eldercare institutions. The author raises the question
of who has the right to control the money of these
lonely, miserable old people. Currently the Pension Fund
transfers the money not to the pensioners directly.
Rather, it deposits their pensions and other resources
in the eldercare institutions’ accounts. It turns out
that the eldercare administration has the sole right to
decide how and when to hand the money out. For example,
the administration of Gerontology center in Krasnodar
has decided not to give the money to the old people at
all. This makes the older residents highly vulnerable to
economic abuse.
Japan: Pension Agency to Go After Deadbeats (September
21, 2004)
The Social Insurance Agency will start a “nationwide
manhunt” in October, searching for 50,000 delinquents of
their public pension premium payments. Many people who
have shirked pension payments are those who have
withdrawn from corporate pension plans after quitting or
being laid off, choose not to join the national pension
program though it is legally required. The 30,000 main
delinquents out of 50,000 that are deemed most capable
of paying the premiums may face losing their driver’s
licenses and passports. But do these persons have the
money to pay the premiums?
Ukraine: Playing Thimble with the
People or 7 Illusions about Pensions Increase
(September 21, 2004)
(Article in Ukrainian)
It is clear that the much talked about pension
“increase” is nothing but a game that the Ukrainian
government plays with its people, argues this article.
The government iappears to be misleading the pensioners.
The state’s budget, for example, allows only one-time
payments in September, October and November – there will
be no pension increase after these three months. The
illusion of improvement will disappear after November
president’s election.
Cote d’Ivoire: Toh Raymond: “ The Reform Has to Be
Ameliorated” (Septmeber 18, 2004)
(Article in French)
In this article, Toh Raymond gives his opinion about
reforming pensions in Cote d’Ivoire. There are some
advantages: first, it seems to improve the contribution
rates of the pensions for a lot of older persons. Then,
it simplifies the way to calculate a pension and creates
a pension for widowers. But there are also some
inconveniences such as the conditions of perception for
the “reversion pension," especially for the widowers.
Nevertheless, this reform has to answer to the
pensioners’s needs and expectations. It appears that the
country is on the right way and seems to be more and
more interested in older persons' needs: the possibility
for the pensioners to have advances, the creation of a
magazine for them, and the celebration of the third
world day for older persons in Cote d’Ivoire.
Venezuela: Retirements in the Central Bank of
Venezuela Generate Struggle for the Presidency of the
Institution (September 16, 2004)
(Article in Spanish)
The directors of the Central Bank of Venezuela approved
a reform which allows a minimum of 45 work years for men
and 40 work years for women to retire from the
institution, benefiting from 60% of their salary. With
this modification, 500 employees will effectively retire
including the heads of the organization. The selection
of the new coordinators and employees of key divisions,
such as monetary operations and international
investments, will have political consequences for both
the institution and the population as a whole.
UK: Employees to Have Greater Say on
Pensions (September 14, 2004)
The Work and Pensions Secretary Alan Johnson promised
the unions that they will have a greater say in the
running of their pension funds by ensuring 50% of
pension scheme trustees being member-nominated. “Our
approach is to give people greater flexibility to make
decisions about when and how long to work,” Johnson
said. He also promised the workers that the government
would not raise the state pension age to 70.Though many
of his promises are “free of new policy details,”
Johnson seeks for a new method to address ongoing
pension issues of the U.K.
Argentina: There Could be 70.000
Anticipated Retirements (September 7, 2004)
(Article in Spanish)
The initiative that is currently on the floor of the
Argentinean Congress could benefit more than 70, 000
citizens. The proposed plan provides 50% of their
pension to the currently unemployed who have contributed
for more than 20 years but, less than 30, and have
reached their retirement age – 65 for men and 60 for
women. Also, the proposal would ask the court to set a
date when the unemployed can access the benefits. The
objective of this measure is to avoid creating an
incentive for companies to fire personnel between 55 and
60 years of age since they are eligible for retirement
benefits.
Ukraine: The Americans Help
Ukrainian Pension Reform (September 13, 2004)
(Article in Russian)
The joint plan as for Pension Reform implementation is
one of the four projects that launched as a result of
the signed Memorandum and the Agreement of cooperation
between the Ukrainian Labor Ministry and US Labor
Department. No other details available.
El Salvador: Insurance of the AFP,
Additional Benefit (August 12, 2004)
(Article in Spanish)
The System of Pension Savings (SAP) only pays based on
three qualifications: old age, disability or death. A
percentage of the contributions paid to AFP goes to
cover the premiums – this complements the pensions in
case of death or disability. Statistics show that from
May 1998 until June 2004, the insurance companies paid
out more than $80.7 million to 13,935 beneficiaries
under the disability category. Today, there are 1.8
million persons affiliated with the pension system. Of
these, 500,000 effectively pay contributions and 50,000
are independent. Those affiliated with the pension
system pay $22.8 in insurance annually, or $1.9 million
monthly. Individuals who have low to minimum wage
salaries may not receive less than $114 (minimum
pension), even though the strict formula dictates that
they be given $80, for the sake of redistribution.
Canada: Pension Plans in Canada
(2003)
This document presents the results of the Pension Plans
in Canada Survey as of January 1, 2003. It gives a brief
overview of changes over time in the participation of
men and women in registered pension plans, the coverage
of the labor force by these plans, membership in defined
benefit and defined contribution plans, and total
contributions paid into these plans. The document also
briefly describes retirement compensation arrangements
with an analysis covering the period 1991 to 2001.
Ukraine: Don’t Offend Us by
Pension-Leveling! ( September 18, 2004)
(Article in Russian)
Enakievo Local Veteran Council members have sent a
petition to the Ministry of Ukraine as well as to the
Parliament expressing their opposition to the Pension
Reform. They totally disagree with the system of
pension-leveling that requires that the subsistence
level (284 hrv.) pension to include all the benefits
such as WW2 medals, donors’ blood contributions, etc.,
that had previously enhanced their small incomes.
Ukraine: The Prime Minister has
Provided Kirovograd with Transportation and Computers
(September 17, 2004)
(Article in Russian)
If there is little else for the elderly people of
Kirovograd, (a little provincial town in the center of
Ukraine) they can benefit from the numerous strategies
that current Prime Minister Yanukovich offers. He wants
to be elected president of Ukraine in November 2004. In
his last demonstration of “care” for older persons, he
provided 5 trolleybuses and 20 “Tavriya” cars to
pensioners and veterans of WW2 among the other election
year gifts to celebrate the 250th jubilee of the town.
He also apologized for delays in sending pensions. No
doubt, the senior citizens of Kirovograd will enjoy the
beautiful new trolleybuses that provide their only
affordable means of transportation. But, of course, they
understand the real reasons for such generosity as well
as its temporary character
Russia: The Pension Reform is Lagging
Behind (September 17, 2004)
(Article in Russian)
So far, the Pension Reform in Russia that started in
2003 does live up most people’s expectations. Less then
2% of the pensioners have entrusted their accumulated
pensions to private structures. The private pension
companies do not expect a great number of the clients
this year either. The main reason is that neither
citizens nor the private structures responsible for the
reform turned out to be ready to its practical
implementation. Other countries’ experience shows that
it takes 5-6 years to understand and make a
conscientious choice. Therefore, the target date seems
to be postponed for 2007-2008
China Explores Ways to Set Up Social
Security Systems For 900 Million Farmers (September
16, 2004)
(Article in Chinese)
Beginning Sept. 1, 2004, the workers who
come from the countryside and other Chinese cities to
work in Beijing will join the medical insurance system
in Beijing. This regulation means that these workers
will enjoy the same medical insurance system as Beijing
residents. The employers will pay the basic medical
costs.
Russian Experts Hope to Strengthen
Cooperation in the Pension Field with China (September
16, 2004)
(Article in Chinese)
Mr. Butanof, President of the Russian
Pension Committee, noted that Russia and China have huge
populations and both nations should strengthen their
cooperation in the pension field. Both nations should
learn from each other in developing their national
pensions. When the XinHua News reporter interviewed him
in Beijing, Mr. Butanov said that both nations are faced
with the same tasks – to protect the elders’ basic
living costs and to protect their rights. Mr. Butanof
said that good political and economic relationships
between the two nations make a good basis for the
cooperation.
Tverskaya Region. The Pensioners are
Dying in Spite of the Pension Increase (September 15,
2004)
(Article in Russian)
According to the data from the Regional Statistics
Committee, the pension level in Tverskaya region
increased by 16% during the period of July 2003-July
2004. In reality nevertheless, it is only a 5% increase
considering the hike in prices for goods and services.
At the same time, the number of the pensioners went down
to 8,200 persons.
Russia: The Failure of the Pension
Reform Suits Insurance Agents Perfectly (September 15,
2004)
(Article in Russian)
By the year 2010 the insurance market in Russia that is
currently estimates 100 mil. doll. will increase up to 1
mild. dol. The main reason to such 40% increase analysts
see in the failure of the pension reform that left
Russian elderly to face the miserable state pensions.
Philippine: “Senator Files Bill
For Pension Benefits Increase” (September 13, 2004)
Manuel Villar Jr., chairman of the Senate Committee on
Finance, proposed to increase the pension benefits of
Social Security System (SSS) members, Sun Star Journal
reported. In order to determine if the proposed increase
in pension benefits for SSS members is reasonable,
Villar has suggested a Senate to conduct an inquiry into
the agency’s performance over the years. “Members who
have contributed longer to the SSS should receive higher
pension benefits,” he added.
Experts Suggest That China
Research Separating Retirement Conditions and the
Payment (September 13, 2004)
(Article in Chinese)
Recent reports say that the Department of
Labor and Social Protection plans to postpone worker’s
retirement ages to reduce the pressure of “the white
wave” on social protection of the elders.
UK: Liberal Dems Promise Pensions
Boost (September 7, 2004)
The Liberal Democrats have pledged to restore the link
between pensions and earnings for over-75s, Party leader
Charles Kennedy announced. According to the plan, single
pensioners over the age of 75 would have an extra £25 a
week and couples £33.70 for their pension checks. In
addition, women who have stayed at home would be no
longer penalized under the plans, since the pension
would be based on residence instead of their history of
national insurance contributions. Pension Minister
Malcolm Wicks, however, opposes those plans by the
Liberal Democrats saying “their sums don’t add up…these
plans haven’t been seriously considered” and would end
up benefiting the richest of the 75 years old. The cost
of transition and the actual practice, according to
Kennedy, would be covered by measures such as abolishing
the Department of Trade and Industry, which Wicks calls
“another half-baked policy from the Liberal Democrats.”
France: The Reform of French
Pensions (September 7, 2004)
Prime Minister Jean-Pierre Raffarin has launched a
national debate on the key economic reform of the French
pensions system. His proposal includes two changes: The
first is to lengthen the contribution periods for public
employees from the current 37.5 years to possibly match
the 40 years required for a full pension in the private
sector. The second is to open personal retirement
savings account. “The reform that is before us requires
a burst of solidarity, the overcoming of selfishness,
and collective ambition” ---Raffarin has commented.
Ireland: “Pensions Board Crack Down
on PRSA Access” (September 2, 2004)
One of only a few countries, Ireland has introduced
personal retirement savings accounts (PRSAs) along with
the traditional governmental pension system. However,
many employers so far have failed in their
responsibilities to give workers access to PRSAs, and
thus, the Pensions Board is going to issue 64,000
letters to those employers, in order to promote the
compliance with their pension obligations. According to
the Board, failure to comply with their obligations is a
criminal offence that could lead to possible significant
criminal sanctions. So far, approximately 35,000 people
have taken out PRSAs in Ireland. Perhaps the Irish
experience will forewarn PRSA enthusiasts about the
dangers in the US.
Ukraine: People Born in the Period
of May 1927- May 1945 will have Benefits (September
10, 2004)
(Article in Russian)
The Parliament of Ukraine is planning to set the
benefits for the people born in the pre-war and during
the war period (WW2). Among them are: free prescribed
medicine, 50% discount on housing, utilities payments,
and free transportation.
Russia: In Rostov Region 7 mil.
Rubles are Provided for Citizen Social Help during
September ( September 10, 2004)
(Article in Russian)
Needy people in the Rostov region will get some social
help in September. Some 12,000 thousand persons are
expected to apply for such assistance. Officially, among
those who have a right to this state support are poor,
nonworking pensioners and people over 80s.
China: Urgent Need for China to
Adjust Pension System, Says Report (September 9,
2004)
Within the next two decades, every 10 workers will have
to support four or more retirees in main land China,
according to Hu Xiaoyi, spokesman for the Labor and
Social Security Ministry. China currently exercises a
“pay as you go” system, in which contributions from
current workers are used to pay out pensions to the
retirees. However, this model has to be changed more
towards building up funds for current workers, Hu
insists. Government officials, on the other hand, have
not started discussing how a change might be made. With
hundreds of millions of people working in both urban and
rural areas, the Chinese government has to decide what
measures it should take, in order to avoid future
difficulties.
UK: Pensions Will Be Someone
Else’s Problem (September 9, 2004)
A heated discussion over the future of the UK’s pension
systems has followed the resignation of Andrew Smith,
the Works and Pensions Minister of British government.
Whoever succeeds Smith’s position, many point out in the
article, will have to face one of the most complex jobs
in the government. With a huge funding gap of £54bn in
the current pension system and the increasing aged
population, what would be the best decision for the
British government to take? Many working class
pensioners see their employers funding hefty pensions
for company directors while forcing cuts on lowly
working stiffs.
Colombia: After more than a
Decade the Government Divulged that 409 Pensions had
Anomalies (September 8, 2004)
(Article in Spanish)
The local administration discovered 409 pensions with
irregularities that add up to 3.747 million pesos. Three
ex- deputies and one ex-manager of the Beneficencia are
under investigation. Additionally, a large number of
public sector former employees receive payments from the
pensions in question. Maria Elena Castrillón, the lawyer
who led the state investigation, has stated that she
fears for her life and possible attempts against her.
The Colombian government has already made the necessary
adjustments to the pensions.
Poland: Some 2 Mln Poles Expected
to Open Individual Retirement Accounts, 32% Seek Bank
Offers (August 31, 2004)
On September 1, individual retirement accounts in which
Polish people may set money aside became available in
some banks and insurance companies. Still, a poll
conducted shows that 40% of those polled are undecided
about the managing institution and 48% do not know how
much they would be willing to save in those retirement
accounts. In addition, only 4% expressed their
willingness to save 80% or more of the maximum legal
amount, which is defined as 150% of the average Polish
yearly salary. People in many countries, including the
US, are discussing private retirement accounts.
Observers will watch this Polish government attempt to
“privatize” with great interest. Who will benefit? Who
will lose?
China: World Forum on Social
Security to Be Held in Beijing (August 30, 2004)
The 28th International Social Security Association
General Assembly is meeting in Beijing, from September
12th to 18th. About 1,500 delegates from 149 countries
are attending the Assembly, with the theme of the
Assembly entitled as “Social Security: Securing Social
Justice.” Important social security problems common to
many countries will be discussed there, including social
protection of migrant workers, investment of social
security, etc.
Argentina: Crisis in
Security: an Indirect Answer to Blumberg’s Critics
(August 28, 2004)
(Article in Spanish)
The leaders of Mothers and Grandmothers of the May Plaza
met with President Néstor Kirchner to receive a
ratification of Human Rights from the government.
Specifically, the new compensation law will cover those
who were born while their mothers were detained, or
those who remained in prison or clandestine centers with
their parents during the last dictatorship. Victims of
identity substitution may also request compensation.
Both groups expressed satisfaction with the law and,
relief with the existence of processes that safeguard
civil liberties. Yet, the Mothers continue their
preoccupation with kidnappings that still occur in
today’s Argentina.
Mexico: Elderly: Business
or Pension? (July 7, 2004)
(Article in Spanish)
The Mexican Government’s Federal District offers loans
to help citizens start small businesses. Approximately
33% are for adults over the age of 50 and 70% of those
are women. These loans represent an investment of 91
million pesos, close to a third of the total fund
budget, and they have a return rate of 82%. Also, a
“White Revolution” program calls other elderly concerns
to the government’s attention. Such issues include
family abandonment, lack of medical attention and
opening the doors of schools so that older persons can
finish their studies.
The Yearly Pension Income is Low
and the Retirement Age for Employees should be
adjusted (September 3, 2004)
(Article in Chinese)
Dehai Pi, the associate director for the Chinese
Department of Labor and Social Security, suggested
adjusting retirement ages for all employees and that
women should retire before 55 years old. He also said
that the yearly pension income continues at a low level.
Japanese pension has about 300
billion Japanese currency deficit (Aug31, 2004)
(Article in Chinese)
Tokyo – A report by the Department of Labor in Japan
released information that the Japanese pension system
incurred a 300 billion Japanese currency deficit between
April 2002 and March 2003.
U.K.: “Pension Panel Opts For
Forced Saving” (August 30, 2004)
A government pension panel is planning to file a
recommendation that says pension savings should be
compulsory through workplace schemes. Currently,
employees can choose whether or not they want to join an
occupational pension scheme. But “compulsion [is]
necessary to help plug the £27bn gap between what is
saved and what is needed for old age,” according to Mary
Francis, director general of the Association of British
Insurers (ABI). The ABI survey reveals that only 26% of
working adults in U.K. support compulsion while 17%
oppose to the idea. The recommendation is due to be
submitted by the end of this year.
Nigeria: Workers Applaud
Pension Scheme Computerisation (August 26, 2004)
The Nigerian government has initiated the
computerization of the pension scheme, in order to
reduce bureaucracy to a minimal level. With
computerization, information such as workers’ names,
fingerprints, and photographs are now stored
electronically, and local governments can log on to the
computer to access the necessary information through the
Internet. Most Nigerian workers, according to All
Africa, are so far willing to cooperate with the system,
since many have been worried about the “genuineness and
transparency” of the pension scheme. The computerization
was realized as a part of government’s efforts to
“ensure that workers in the state have a future they can
look up to.”
Russia: Minimal Wages, Pensions to
Be Increased in Russia in 2005 (August 23, 2004)
The Russian government is going to increase its pension
payments by 250 roubles in 2005, ITAR-TASS News has
reported. According to Minister of Public Health and
Social development Mikhail Zurabov, the proposed
increase is because of the increasing inflation rate,
which is estimated to stand at 7.5-8.5 percent in 2005.
As a result, pensions will exceed the subsistence level
of Russian workers by about 5-6 percent.
India: UN Pension Fund Gets FII
Status (August 22, 2004)
The United Nations Joint Staff Pension Fund (UNJFPF) has
registered with the Securities and Exchange Board of
India, in order to operate as a foreign institutional
investor (FII) in the country. As on December 2003,
UNJFPF had assets over $26 billion, which were invested
in 46 different countries including the emerging
markets. Along with UNJEPF, many foreign funds have
expressed interest to invest in India in recent years,
including California Public Employees’ Retirement System
(Calpers) which is the largest public pension fund of
the United States. It seems like the Indian capital
market has started generating a great interest among
foreign investors.
Zambia: Two Pension Funds
Under Threat (August 26, 2004)
The existence of Zambia’s traditional pension systems --
the Public Service Pensions Fund (PSPF) and the Local
Authorities Superaanuation Fund (LASF) --have been
threatened because of a drastic loss of membership since
the National Pension Scheme Authority (NAPSA) was
created in 2000. According to the NAPSA Act, all new
civil service employees except for teachers and security
personnel are to affiliate to NAPSA. Many, including the
World Bank Economist Aniruddha Bonnerjee, demand the
government give more careful coordination between NAPSA,
PSPF and LASF especially in terms of funding. Others,
like the International Social Security Association
representative, point out that, in order to make profit
off the pension systems, public pension funds of Zambia
need more improved investment techniques. It also
appears that government officials may have interfered
with pension investments.
Australia: Super Fund Shortfall
Fears Grow (August 26, 2004)
As a result of growing shortfall in pension funds, more
and more Australians are considering working longer than
the so-called retirement age, according to a survey
conducted by the Association of Superannuation Funds of
Australia (ASFA). In a few decades, the aged population
in Australia is estimated to rise to 25% of the total
population, which means there will be only 2.5 workers
for everyone aged 65 or over, in order to fund the
government pension. More people will face “a gap between
their retirement savings and their desired lifestyle in
retirement,” according to ASFA pension executive
Philippa Smith.
Czech Republic: Czechs Eye Mid-2006
For Pension Reform (August 26, 2004)
The Czech Parliament approved a proposal for a
government pension reform that is to be prepared by
mid-2006, IPL reported. In the new system, individual
income and pension contributions are going to be
reflected more, while the existing pay-as-you-go system
will be maintained. In addition, the new government
wants to encourage volunteer pension insurance and
include employee pension schemes. The new system “should
bring financial stability and long-term functionality,”
commented Martin Jahn, Vice Premier for Economic Issues.
The fund to cover the transition costs to the new
pension system, according to Czech Finance Minister
Bohuslav Sobotka, will most likely be financed by
privatization revenues and dividends from large
companies. This privatization strategy may prove
illusory as the companies insist on profit margins that
a public system does not require. For certain, sharp
disparities in income levels between retirees will
occur.
Ukraine: Long Waited Duty Stimulus
Has Shown Up (August 14, 2004)
(Article in Russian)
While overcoming the problems that brought the pension
reform, Ukrainian pensioners have suffered from
humiliating and inhuman service at the local branches of
the Pension Fund of Ukraine. Vitalyu Leonidovich
Avgustimov was trying to appeal against the legitimacy
of sadly known resolution of the cabinet № 1783 from
November 20, 2003. He was able to find neither justice
in Kiev Pecher Court nor in the Capital Courts of
Appeal. Still, the Supreme Court of Ukraine and The
European Human Rights Court are waiting to intervene in
the problems of the Ukrainian elderly.
Ukraine: Yushenko has brought to
Shame to the Yanukovich Pension Reform (August 12,
2004)
(Article in Russian)
Viktor Yushenko, the presidential candidate has
criticized pension reform by the Yanukovich government
for creating hardship for the elderly people who have
been working for their whole life. He also called the
tradition of giving some extra money to the pensioners
before the election campaign a “disgrace.” Yushenko
suggested that the criteria for the pension should be
continuity of employment and the salary level received.
Taiwan: Activists Demand New
Labor Pension Plan Be Postponed (August 12, 2004)
Worried about the negative outcomes that may be brought
about to Taiwanese workers, Labour groups have
petitioned the government to postpone the introduction
of its new labor pension plan. According to the new
plan, once an employee reaches the age of 60 after
working for at least 15 years, he or she will receive a
monthly pension payment. “Salary cuts, lay-offs and
outsourcing” that will be used by companies to combat
this new pension plan, the Association for Middle Aged
and Senior Employment indicates, will be very
disadvantageous to the 3 million Taiwanese elderly who
are currently unemployed. In addition, according to the
104 Job Bank chairman Rocky Yang, between 5 and 10
percent of small and medium businesses may end up
closing as a result of increased labor costs brought on
by the new system.
Japan: Gov’t To ‘Force’ Job
Leavers To Join Public Pension Program (August 12,
2004)
Beginning the next fiscal year, the Japanese government
will make it compulsory for job leavers to join public
pension programs. The Ministry of Health, Labor, and
Welfare and the Social Insurance Agency decided to do
so, in order to increase the number of paying policy
holders which will eventually improve the status of the
public pension fund. While under the current system,
people who failed to sign up for the pension program
after the agency notifies them twice will be ineligible
for future benefits, the new system will automatically
register them and mail them an invoice for national
insurance payments. Furthermore, low-income earners can
be exempt from the payment obligation and still can
receive benefits, if they join the program. While many
call for a drastic pension reform of Japan, we will see
if this reform was a right action for the government to
take.
Nigeria: Military Pension: FG May
Seek N15Bn Supplementary Budget (August 11,
2004)
In the country of Nigeria where accumulation of arrears
for military retirees has been a big issue, Minister of
State for Defense Roland Oritsejafor recently announced
that the government is planning to present a N15 billion
supplementary budget at the National Assembly. If the
plan is carried out, the seven months’ arrears of
military pensions will be finally offset. Oritsejafor
also expressed his confidence in the newly proposed
contributory pension scheme, saying that when it comes
into operation, “all the problems encountered by his
Ministry with regards to military pensions would be a
thing of the past.”
U.K.: Ombudsman Poised To Launch
Inquiry Into Pensions Advice (August 5, 2004)
Following the allegations that the U.K. Treasury had
been falsely advising consumers saying that their
retirement savings were guaranteed by legislation, the
Parliamentary Ombudsman decided to launch an inquiry
into the accuracy of Government advice over the security
of occupational pension schemes. The investigation is
estimated to last up to a year, and according to the
campaigners, the Government may have to face as much as
£2.2bn to cover the compensation payments for those who
lost all or some of their occupational pension savings
after their companies went bankrupt. The inquiry is to
be launched in early September.
Japan: Public To Get Notice Of
Pension Payment Status (August 11, 2004)
Following Sweden, the Social Insurance Agency of Japan
will begin mailing out records to the taxpayers, as to
how much they can expect to receive from the government
pension programs after the retirement age. The age limit
to access this information was lowered from those aged
58 to 55 in January 2004, but beginning the fiscal year
of 2008, everyone including non-payers will be able to
receive this reliable information. These changes in
pension-payment-notification system, according to Asahi
Shimbun, were made because most people want to make sure
if they have kept up with their pension premium
payments, and more importantly because the agency wants
to raise public awareness, particularly among
non-payers, about the need to pay into the pension
system.
India: Indian Pros Lose Security
Benefits in US (August 10, 2004)
While many temporary Indian workers in the U.S. are
obliged to pay for Social Security retirement benefits
through deductions from their paychecks, most of them
get zero benefits as they return to India before they
become eligible for the benefits. “The US issues only
temporary work permits for 3-6 years,” a Bangalore-based
software engineer from India, who lost six years of
Social Security contributions, points out the unfairness
of the system. His claim is understandable since
American workers in India, on the other hand, are
eligible to have their pension contributions back when
they leave the country. Manmohan Singh, Prime Minister
of India, is to discuss this issue with the U.S. federal
government when he visits the States in September.
Philippine: Villar: Gov’t Can’t
Afford P15B Early Retirement Program (August 10, 2004)
The government of Philippine is facing a serious
financial crisis. They are planning to borrow P15
billion (approximately US$270 million) from the World
Bank in order to fund its early retirement program, but
Sen. Manuel Villar points out that the government
already has a lot of foreign debts and it “needs to save
and reduce the budget deficit.” He has also suggested a
series of program reforms, including reassignment of
governmental jobs and restructuring of government
corporations.
Russia: Russia Welfare Bill Sparks
Anger (August 3, 2004)
About 200 Russians have been protesting near the Duma
against President Vladimir Putin’s welfare system
reform. Under the plan, the Soviet-style system of
automatic benefits, such as free transport and
subsidized medicine, would be replaced with cash
compensation for pensioners, the disabled, and war
veterans. However, even those who receive these new cash
benefits are against the reform, saying that “the new
law would make them worse off” because of the possible
inflation and instable Russian economy. A large portion
of Russian population is increasingly becoming Putin’s
opponents.
Mexico: Proposed Mexican Social
Security Overhaul Sparks Violent Protests, Late-Night
Senate Debate (August 5, 2004)
More than 11,000 Mexicans blocked main avenues across
Mexico’s capital and caused huge traffic jams, in
protest over the governmental proposal for changing
Mexico’s Social Security Institute’s pension system. The
proposal would prohibit the institute from using its
operating budget to fund pensions and require that
retirement funds be financed entirely by deductions from
the pay checks of its employees. “The government’s
intention is to privatize social security and break all
the unions,” union representative. Beatriz Arenas said
furiously at the protest site. Lower House has already
approved the proposal, and if the Senate votes in favor,
it becomes law. Stay tuned!
Ghana: Presidential Commission
On Public Services Pension Schemes Inaugurated (August
4, 2004)
Responding to the Teachers and Civil Servants’ public
demonstrations and pension worries, John Agyekum,
president of Ghana, addressed the country’s need for a
new Pension Scheme at the August 4th Presidential
Commission on Public Service Pensions Schemes at the
Castle, Osu. Agyekum demanded that the Commission take a
comprehensive look at the current workers’ conditions on
salaries and wages, and then to come up with
recommendations to the government as to what needs to be
done to implement a new Pension Scheme. The Teachers and
Civil Servants, a Ghana’s leading civil organization,
will follow the proposals closely.
Russia: Pensions To Increase By
130 Roubles On Average; The Rise Will Embrace All
Pensioners Or 38.2 Million People (August 1,
2004)
Russian pensions will increase by 130 roubles (approx.
US$4.50) on average, according to the Russian Pension
Fund. This means that the average Russian pensioner will
receive 2,195 roubles (approx. US$75.00) a month to
support their basic living expenses. This pension reform
is particularly aimed to raise the pensions of those
with handicaps and veterans who served in the Great
Patriotic War.
Japan: Most Japanese Distrust Pension
System: Survey (August 1, 2004)
Japanese are putting intense pressure on Prime Minister
Junichiro Koizumi to reform the national pension
structure. According to the survey conducted by Yumiuri
Shimbun, up to 71% of eligible voters expressed their
distrust toward the current national pension system of
Japan. Though the Koizumi cabinet endorsed reforms in
June, the bills’ primary objective would add premiums
and cut benefits over the next decade. The public and
the opposition parties oppose this idea. With the
skyrocketing number of the elderly in the national
background, what can Koizumi do to regain the trust of
citizens?
Aiming to Perish the Pension Reform, Government Made
the Pension Fund of Russia (PFR) Monopolistic (August
2, 2004)
(Article in Russian)
The Government of Russia made the Non-state Pensions
Funds (NPFs) very unattractive to the retired citizens.
Existing laws will never let NPFs compete with the
Public Pension Fund of Russia (PFR). If retirees want to
transfer their accumulated pensions to the private
(non-state) pension fund, they must pay 24% of this
amount to the Government! Not a good deal!
Italy: Italy To Raise Retirement Age Under Pension
Reform (July 29, 2004)
By a margin of 333 positive votes to 148 negative and
one abstention, Italian Prime Minister, Silvio
Berlusconi, won a vote of confidence to overhaul Italy's
pension scheme. Under the new bill, Italian workers will
now either have to pay social security for 40 years or
be older than 60 and have paid social security for 35
years to be eligible for full pension benefits. This is
a marked change from the current pension bill which
qualifies Italians for full pension after 35 years if
they are older than 57. Prime Minster Berlusconi has
argued that the reform is a crucial step towards meeting
EU Stability Pact rules.
Japan: Vision Necessary for Future
Social Security (July 27, 2004)
Japan is taking several steps to ensure that a
proportionately large growth in the aging population
does not adversely affect its economy. A conference was
held in Tokyo recently to encourage dialogue about the
future of the country's Social Security. The forum was
appropriately titled, "Vision for an Aging Society with
a Declining Birthrate-Overcoming the Generational
Conflict of Interest" and was sponsored in part by the
Tokyo Colloquium and the Yomiuri International Economic
Society. Among the distinguished panelists were; Japan
project manager of the Swedish Care Institute, Gustav
Strandell; Professor Toshiaki Tachibanaki of Kyoto
University and House of Representatives member, Yuji
Tsushima.
UK: Borrowing To Solve The Pension
Fund Problem (July 27, 2004)
For an increasing number of pension schemes in crisis in
the UK the proposed solution seems almost as precarious
as the problem itself: borrow money to pay debt. WH
Smith is the latest company in the UK to join the
bandwagon of organizations trying to plug the hole in
their pension bucket with newly-borrowed funds. Kate
Swann, Chief Executive Officer for the company, agrees
that, "in reality, it is just moving money from one part
of the balance sheet to the other." For the time,
however, there are no other solutions. WH Smith has a
pension deficit of estimated £220 million (US $400
million).
Australia: Property Threat To
Pensions (July 21, 2004)
Maybe it does not pay to keep with the Joneses after
all. In another of several crackdowns by the Australian
government in recent weeks, old-age pensioners and other
welfare recipients who own a second house may lose a
portion of their benefits or have to forfeit them
altogether under the Howard Government’s new assets
scheme. Owing to Australia’s so-called property boom,
authorities have indicated that for many pensioners, the
value of assets such as a second home may supersede the
pension cut-off point and cause them to be eligible for
benefits they currently receive. President of
Australia’s Pensioners and Superannuants Association,
Morrie Mifsud, has made clear his strong opposition to
the possible changes, and maintains that, “not everyone
who has a second home is rich. Some people are assets
rich but finance poor.” But, how does a government
balance the needs of poorer older persons with those who
have been fortunate enough to acquire the “wealth” of a
second home?
Zambia: 90,000 Pensioners to Lose
Their Benefits (July 20, 2004)
The Zambian pension crisis graduated from bad to worse
for 90,000 retirees. The Public Service Pension Fund
(PSPF) has acquired a debt of K1 trillion (US $205
billion) and has found no foreseeable way to eliminate
it. Beginning next year, the organization will be unable
to pay close to 100,000 pensioners what it owes them.
Though the Fund will be restructured between 2004 and
2008, there appears no clear-cut plan to erase
debt.
The Public Service Pension Fund borrowed K20 billion
towards debt consolidation from the Finance Ministry but
is now unable to account for the money. What a violation
of public trust when the government borrows recklessly
without means to re-pay the loans.
Jamaica: We Need More Money! (July
20, 2004)
There appears to be no easy solution for the pension
crisis among retired teachers in Jamaica. President of
the Retired Teachers Association, Leo Williams, recently
offered an impassioned plea to the Jamaican government
to help the nation’s retired teachers and, in
particular, those who stopped working before the pension
law reform in 1997. “Teachers who stopped working
between 1986 and 1995 [are] at a disadvantage,” notes
Williams, because of the diminutive pensions they
receive. The average monthly allowance for persons who
retired prior to 1995 is between $10,000 and $13,000
(US$164 -$213). For those who retired after 1995, the
monthly pension is upward of $20,000 (US$ 328). The
Jamaica Government Pensioners’ Association (JPGA) and
Jamaica Teachers' Association's Co-operative Credit
Union both contribute heavily to pensions funds but both
organizations maintain that it is merely a drop in the
bucket. As many groups continue to advocate for pension
increases, it is clear that, in many respects, what is
needed is to, "analyse the past, appreciate the present,
[and] anticipate the future.”
Russia:
Russian Pension Funds To Merge (July 20, 2004)
In compliance with reforms approved by Russian President
Vladimir Putin, Vneshtorgbank and Vnesheconomicbank, two
of the country’s leading financial institutions, have
merged their pension funds. The union is expected to
prove beneficial for both parties involved, in
particular because of Vneshtorgbank’s extensive
experience with pension funds on the world market. The
proof will be in its performance and the eventual
payouts to Russians who lost their benefits after the
change from the Soviet Union’s government.
Namibia: Request To Retire At 50 (July
20, 2004)
What social factors, if any, should influence the
retirement age? One Namibian writer argues that the
prevalence of HIV/AIDS and the high death rate in
Namibia are reason enough to lower the country’s
retirement age from 55 to 50. Persons may continue to
work even after 60 years old but should not be required
to. A lower retirement age may also mean that younger
persons will enter the job market in larger numbers at
an earlier stage. In the end, this may prove beneficial
to Namibia both economically and socially.
Australia: Pensioners Lose
Concessions (July 20, 2004)
The Australian government has rescinded some 34,000
concession cards in what is being dubbed, “an
unprecedented crackdown on Australia’s elderly and
disabled.” The country’s Social Security department
recently reassessed the status of over 37,000 pensioners
and has since argued that an estimated 15,400 retirees
have been receiving $39 million that they were not
entitled to. The concession cards qualify holders to
benefits averaging between $750 and $1000 per annum and
the change is expected to cut government expenditure by
$241 million over the next four years. The transition
will undoubtedly be very difficult for much of
Australia’s elderly population.
Scotland: CBI Calls For Raising Of State Pension And
Retirement Age (July 19, 2004)
Scotland has joined the league of countries searching
for a solution to their pension issues. Recently, the
Confederation of British Industry's (CBI) Pension
Strategy Group suggested that the retirement age in the
UK be raised in stages to 70 years old. The proposal is
one of several changes recommended by CBI to help the UK
meet its current pension challenges. The raise would
take place over the course of ten years and would
significantly reduce the state's dependence on
means-testing low-paid workers.
Poland: Poland Prunes Costs, Limits Regular
Adjustments To Pension & Disability Benefits -
News Analysis (July 19, 2004)
Poland is taking several steps to eliminate national
debt. The latest such proposal to gain approval from
parliament prohibits the systematic adjustment to
pension and disability benefits and also limits
indexations to one every three years or whenever
cumulative inflation is 5 percent. The reform is
expected to increase overall pension payouts over the
next six years and save the state budget PLN 8.9 billion
(approximately US$2.4 billion) between 2005 and 2007.
Talks are currently underway to reform farmer social
security and to assess Poland’s public finances.
Nigeria: 17 Private Sector Unions
Reject Pension Scheme (July 19, 2004)
In a somewhat gutsy move, seventeen unions from the
Nigeria Labour Congress (NLC) opted not to participate
in the country’s new pension reform bill. In a closed
meeting at the national secretariat of the Food Union,
the 17 groups decided to show their opposition to the
reform by refusing to take part in it. The unions attest
that the new reform does not serve their interest and,
according to Bright Anukuru, leader of the private
sector group, “it does not have a future for our people.
The law does not take our interest into consideration.
What it did was to devalue the already existing scheme
to make us poorer.” President Olusegun Obasanjo’s
administration received a 30-day ultimatum from the
Unions to withdraw the law before its passage.
Colombia: Colombia's Uribe To
Present Legislation To Cut Pension Deficit (July 19,
2004)
The number of pensioners living in Columbia has grown
but the money available to support them has almost
disappeared. Recent reports indicate a steady decline in
government resources available for pensioners so much so
that it is feared that they may be fully exhausted
within the next month. Columbian President, Alvaro Uribe
has proposed to cut expenditure to help resuscitate the
Country’s dying pension scheme and will ask congress for
a constitutional amendment to cap monthly payments at 9
million pesos (US$3300). In addition, Uribe is also
advocating for a 4 percent sales tax on commodities such
as food as well as taxation on rent. The patchwork
system required a state subsidy to private pensions, a
pension for political figures 50 times more than the
least pension, and permitted an early retirement age.
Hopefully, the new system will be fair, universal, and
sustainable.
Australia: 'Lack Of Vision' In
Pension Reforms (July 19, 2004)
Opposition Employment Services spokesman, Anthony
Albanese has cited the Australian government’s response
to the pension crisis as evidence of a greatly
“misunderstood” problem. Reports from Australia’s Bureau
of Statistics indicate that 1.6 million Australians aged
45 to 64 years are either unemployed or not in the
labour force. Additional data also suggests that a
significant portion of older Australians have been
forced into early retirement because of job losses.
Albanese concludes that when the government finally
decides to put measures in place to counter the
unemployment and pension crisis, it may very well be too
late.
Japan: Pension Bills Littered With
Errors (July 17, 2004)
The Japanese government dealt another blow this week as
it is revealed that the recently passed and widely
unpopular pension bill is “littered with errors.” Though
authorities insist that the flaws are minor and will not
necessitate a review by the Diet, the ministry has
expressed outrage at the findings. All responsible
parties will be forced to take a 10 percent pay cut for
4 weeks as reproval for the errors. The new pension bill
proposes to increase pensions every year until 2017
while simultaneously cutting benefits to cut
expenditure. Most critics of the reform argue that it is
both burdensome and
inconsistent with the country’s changing demographics.
Canada: Canada May Introduce New Retirement Savings
Plans, Post Reports (July 15, 2004)
Talks are now underway in Canada to introduce a tax-free
retirement savings plan. The scheme, which was first
discussed during the last fiscal year, would be fueled
primarily by after-tax investments and returns from
interest payments. All subsequent withdrawals would be
tax-free. It has been rumored that Canada’s Finance
Department supports the proposal and believes that it
would prove highly profitable for some Canadians and the
Canadian economy alike. What are the equity issues? Will
rich older Canadians simply get richer and avoid taxes
and let the poor elderly stay poor—or get poorer— in old
age? Aren’t taxes supposed to support a better life for
all?
Trinidad And Tobago: TSTT Playing
Games On Pensions (July 14, 2004)
One of Trinidad's leading corporations, Textel
Communications, has failed to deliver on yet another
promise to pay overdue pensions to former employees.
Court appointed spokesman for the group, Eugene Lopez,
reminded Communication Workers Union (CWU) members of
the Chief Justice's 2000 response to the issue, "the
company could afford to wait till all the Textel
employees died and then keep the surplus." An irate
Lopez also argued more recent talks with Textel has
yielded an equally disconcerting response.
India: Gov’t To Launch Savings
Scheme For Elderly On Aug 1 (July 14, 2004)
India’s elderly population will soon have another
savings scheme to choose from. The Indian government has
promised that as of August 1, a new five-year pension
plan will be put into effect. The tax-deductible plan
will be available to persons 60 years of age and older
and will penalize pensioners for premature withdrawal.
Smaller plans are traditionally very popular in India
and will continue to be sold in many non-fiduciary
institutions.
India: Pondy Govt Hikes Old Age
Pension (July 13, 2004)
Following deliberations lasting two days, the Congress
government in Pondicherry, India has okayed an increase
in the old age pension. The pension will go up to RS 225
for retirees and to Rs 425 for physically handicapped
persons. Talks are also underway to renew the inclusion
of destitute women in the pension bill. Adjustments will
be made to the 2004-05 budget to accommodate the pension
increase.
Macedonia: The Number of
Social Security Beneficiaries Rapidly Increases (July
13, 2004)
More people receive Social Security benefits, reports
the Macedonian Ministry of Labour. The increased
distribution of payments from 61,700 households last May
to 64,832 households for the same period this year is
largely the result of job losses. In Macedonia,
employment payments last between 3 and 14 months,
depending on the duration of work and experience, after
which Macedonians are eligible for Social Security
benefits. The recent closure of factories and mines
contributed to the country’s mounting unemployment. The
Ministry estimates that by the end of this year the
number of unemployed will grow to 65,000.
India: Government Modifies Pension Scheme For Widows
(July 13, 2004)
The name of India’s Pension’s Scheme for Women is not
the only thing being changed by the organization. The
newly titled, ‘Rehabilitation Scheme for Widows,’ has
resolved to eradicate the loopholes in its current
scheme and discontinue benefits to some 27,000
unqualified recipients in the future. Other extensive
changes to the scheme include a policy ratification to
exclude divorcees and destitutes (women separated from
their husbands but not divorced) from the plan as well
as mandatory training for all beneficiaries in a
government-recognized trade. The scheme’s management
will also undergo a significant shake-up. Under the
revised plan, the Directorate of Social Defence will be
replaced by the Revenue Department as the primary
authority in the implementation of the scheme’s
policies. Will the Revenue Department want to keep costs
low or help women?
Australia: Retirement Blues For
Bosses (July 10, 2004)
A recent study reveals that Australian businessmen are
"afraid" to disclose information about their retirement
to coworkers. Data gathered from several companies
suggests that fear of marginalization drives the
hush-hush attitude among executives. Several of the
study's participants describe the findings as related to
the unavailability of part-time or casual work for
employees in transition to retirement.
Japan: Painful Pension Reform In
Japan (July 9, 2004)
The state of Japan's pensions may tilt the upcoming
elections in favor of the country's opposition
Democratic Party. Prime Minister Junichiro Koizumi's has
faced increasing unpopularity through his handling of
the nation's pension scheme, which many retirees fear
will force them to leave retirement to take up part-time
jobs. Koizumi's proposal maintains that in order to
boost Japan's two largest pension plans, the government
must reduce payments and raise contributions. Koizumi's
Pension Reform Plan has been the cause of several
protests and has cost him the support of voters such as
62-year old Terubumi Nakada who fears that the new
scheme will rob him of as much as one sixth of his
pension.
Ecuador: Ecuador's Social Security
Board Members Appeal Their Removal (July 9, 2004)
Ecuadorian seniors continue to protest the nation's
diminutive pensions. Despite the recent approval of a
nationwide pension increase and a "shake-up" of the
Social Security board, Ecuador's elderly are still
pushing for more to be done. Policy makers are meeting
with demonstrators in hopes of reaching a tentative
agreement and quelling the uprisings. Former Social
Security board members who are also dissatisfied at the
unfolding of events in the pension crisis have appealed
their job termination but an equally frustrated
superintendent has refused to retract his decision.
Japan: Wealthy Retirees Boost
Demand For Luxury Goods (July 9, 2004)
Japan's moneyed elders have mastered the art of living
well and in style. The recent upsurge in the purchase of
luxury goods in Japan has been directly tied to the
increase in the number of wealthy seniors. One report
indicates, for example, that the average passenger on
the Tokyo-based Asuka, 35, 000 yen (US $319) per day
cruise, is 70 years old. The increase in the sale of
luxury goods such as the notoriously pricey Maserati
Quattroporte car and Audemars Piguet watch has also been
attributed in part to wealthy retirees. As the demand
for luxury goods grows, businesses such as American
Express seek to capitalize on new demands by introducing
products to make it easier for individuals to spend
large sums of money.
El Salvador: New Retirement Law
(July 8, 2004)
As of 2005, Pensions will have a new face in El
Salvador. The Legislative Assembly has approved a
retirement law that will equate eligibility to retire
with age and years of service rather than solely the
latter. Under the current law, Salvadorean workers are
able to retire after 30 years of service regardless of
age. The new law, however, stipulates that a Salvadorean
retiree must have completed at least 25 years of labor
and be a minimum age of 60 for men and 55 for women.
Israel: Treasury Praises
Histadrut's Change On Pension Fees (July 8, 2004)
Israel's Histadrut labor federation has decided to
cancel a policy that would subject pensioners to
additional member fees. The fees, which would be
directly deducted from member accounts, will be replaced
by a free support service. Attorneys representing the
pensions and insurance company announced, "a substantive
decision has been made that any money coming in from
management fees will be rolled back to members, without
taking any sums out." The initial proposal to charge
retirees member fees is believed to have been a part of
a larger scheme by Histadrut to profit from member
pensions.
Italy: Diliberto: Berlusconi Cuts
Pensions And Taxes For The Rich (July 8, 2004)
In an apparent bid to regain "consensus," Italian Prime
Minister Silvio Berlusconi has embarked on a scheme to
bring about large scale tax cuts. The country's
opposition leaders argue, however, that it is too late.
PDCI Secretary, Olivioero Dilberto, contends that,
"given the current state of affairs, Mr. Berlusconi
should really resign from his office and make room for
early elections." Dilberto goes further to suggest that
the proposed tax cuts will only benefit society's elite
and will bring Italy one step closer to becoming a
"post-feudalistic" country.
Nigeria: Implementation Of New
Pension Reforms Begin (July 8, 2004)
Nigeria has put into effect the recently passed Pensions
Reform Bill. Officials this week marked the introduction
of the scheme by stressing its benefits and long term
goals for implementation. Several of the nation's banks
will participate in the scheme though many others that
are unable to foot the N500 million initial deposit will
be denied an operating license. All policies in the
Pensions Reform Bill are effective this month.
UK: Pensions Rethink Urged For
Younger People (July 6, 2004)
Britain's biggest pension advisers have suggested that
younger people switch back to the state pension. They
argue that recent changes in government strategy geared
towards increasing retirement income from private
savings and reducing state contribution to pension
funds, mean that it may no longer prove advantageous to
avoid state schemes. Insurers are also advising older
persons to reconsider joining government schemes.
China: It Will Take A Long Time For
China To Marketize The Current Pension
System (July 6, 2004) (Article in Chinese)
A report that investigated an effective "free market"
pension system published on July 2nd attracted a lot of
attention. The Division of Financial Research at China
National Development and Research Center published the
report. However, China is in the process of changing
from a public to a market system but the transition is
not complete. A "free market" requires laws to assure
fairness. China needs to discuss further how a
market-based pension will be developed in China.
Japan: Baby Boomers' Retirement Poses Problems (July
6, 2004)
In 2007, the first generation of Japan's baby boomers
will turn 60. The group, which currently accounts for 5
percent of Japan's population and 1.09 million of the
country's workforce, has many economists fearing that
their retirement will seriously damage the Japanese
economy. Predictions so far estimate a 7 trillion yen
drop in earned income, as well as a large-scale decrease
in consumption and a 16 million yen fall in the
country's gross domestic product. Several tactics have
been suggested to help curb possible damage. There are
others still who speculate that detailed planning,
pension reform and graduated reduction in employment
will wholly prevent negative impacts on the country's
economy.
Germany: German Pension
Measures Insufficient - Report (July 6, 2004)
German President and former head of the International
Monetary Fund, Horst Köhler, contends that Germany's
welfare state has not been adjusted to meet population
ageing. The comment comes in the wake of the IMF's
latest publication on Germany in which the country's
statutory retirement age and long-term unemployment
among elderly were cited as cause for "major concern."
The report went on to highlight several positive changes
in the Germany economy such as the introduction of hedge
funds, asset-backed securities and inflation-indexed
government bonds.
Russia: Zurabov Says Pension
Rise Is Affordable (July 6, 2004)
The Russian pension system continues to receive a major
boost. On April 1 the pension indexation grew to yield a
rise of 125 rubles ($1 equals about 29 rubles) of the
average Russian employee's pension. Another increase is
likely, and the country's Minister of Health and Social
Development, Mikhail Zurabov, has dispelled some doubts
by publicly stating that the raise will be affordable.
This year, the minimal pension in Russia went up to 944
rubles and the maximal pension increased to 2,243
rubles.
Turkey: World Bank Advises on
Social Security Reforms (July 5, 2004)
Turkey's economy will not be affected by the US Federal
Reserve's 0.25 percent increase on interest rates,
reports World Bank's Turkey Director, Andrew Vorkink.
The comment comes after Vorkink's announcement of
Turkey's "good work" with its social security reforms.
Turkey, which boasts one of the highest economic growth
trends of the world's developing nations, is also
expected to attract increased foreign investment in the
coming year.
UK: Government 'Is Ignoring Pension
Scheme Victims' (July 1, 2004)
Leading pensions expert, Ros Altmann, concludes, "the
Government is simply trying to exclude as many people as
possible from the assistance." Altmann's response, like
that of many, appears to be one of frustration at the
British government's handling of the nation's pension
system. The administration has been criticized
innumerable times during the last two weeks for its lax
and irresponsible tactics and these latest complaints
offer a similar assail. A newly published report shows
that an estimated 54 percent of employees who find
themselves in wound-up pension schemes lose at least
half of their retirement income. The figure does not
account for the some 10,000 persons have lost less then
£5 a week or those receiving a pension from a scheme in
wind-up. Workers fear that the government's proposed
plan to compensate these workers is both ill-conceived
and "woefully inadequate."
UAE: Pension Benefits
and Omani Older Persons (July1, 2004)
(Article
in Arabic)
The Public Association of Pensioners
organized, along with the Oman Oil Company, has
organized a seminar about the pension benefits
that serve Omani older persons. The article also
details how it is managed by the three parties.
Slovakia: Parliament Turns Down
Social Security Revision (June 30, 2004)
Much to the disappointment of the Slovak Labour
Ministry, Minister Ludovít Kaník, will not be receiving
a "free hand" in the administrative dealings of social
security provider, Sociálna Poisťovňa. The Slovak
Parliament has rejected the petition to allow Kaník the
authority to appoint and dismiss the directors of the
Social Security company. The nonacceptance of the bid is
due largely to opposition from the country's New Citizen
Alliance Party, Hungarian Coalition Party and Christian
Democrats Party. A positive vote would have led to the
retraction of the Slovak legislative code that documents
the basis for the dismissal of the provider's directors.
Switzerland: Swiss MPK Mulls Raising
Retirement Age (June 30, 2004)
Swiss trade unions are calling Migros' bid to increase
the retirement age from 62 to 63, "unnecessary and
wrong." Migros, one of Switzerland's well known pension
fund wholesalers, argues that the change is intended to
help the company keep up with nation's new demographic
trends. So far, a reported 90 percent of the
wholesaler's delegates have consented to the increase.
The organization also purports that, because the
employer bears two thirds of the costs for pension
funds, workers' contributions will essentially remain
the same.
Canada: Old Age Security Benefits
to Rise Slightly On July 1 (June 29, 2004)
Canadian retirees now enjoy slightly more lucrative
pension benefits, states Social Development Canada.
Since July 1, there has been a 0.7 per cent increase in
pensions for people 65 and over so that the average
pension has changed from $463.39 to $466.63. Guaranteed
income supplement and monthly allowance payments have
also increased by 0.7 per cent. Pension benefits in
Canada have been adjusted every January, April, July and
October since 1973 depending on consumer price index
changes.
China: Huaicheng Xiang, the
President of the Social Protection Pension
Association, Talks About The Issues of Taking Care of
the Elders (June 28, 2004)
(Article in Chinse)
Beijing - Taking care of elders will be a tough problem
that will face Chinese society and its economy
development. On June26 at the pension conference that
was held in Beijing University, Huaicheng Xiang, the
president of the Social Protection Pension Association
talked about the issues of taking of the elders.
Israel: HCJ: No Old Age Pensions For Non-Residents
(June 28, 2004)
Israel's High Court of Justice on June 28 rejected a bid
for former residents to receive a pension from the
country's National Insurance Institute. According to the
High Court, the NII will not be required to pay pension
to non-residents regardless of contribution to the fund
while living in Israel. The ruling is strongly supported
by the country's Minister of Social Welfare, Zevulun
Orlev.
Ireland: Irish Neglect Retirement
Plans (June 28, 2004)
Research shows that a large percentage of Irish are not
saving for their retirement. According to a recent
study, a significant portion of the country's adult
population is neither a part of a pension scheme nor has
given any consideration to how they will support
themselves after retirement. The study also reveals that
though 30 percent intend to rely on the state pension,
most agree that it will not be enough to live on. The
Bank of Ireland Life suggests that "greater awareness"
is needed to combat the problem.
Australia: Free To Choose, As Well As
Lose (June 26, 2004)
With choice of superannuation fund a fast-approaching
reality in Australia, some warn that pension schemes
that allow employees the privilege of open schemes are
at a great risk of "mis-selling". As was evidenced with
Britain's installment of a similar plan in 1988,
"pension mis-selling" stands to effect escalating fees
and poor investment returns in Australia's retirement
sector. Supporters of the change argue, however, that
Britain's problems with superannuation are not
indicative of problems to be experienced by the land
down under. To help ensure a smooth crossover, officials
plan to introduce a "substantial education campaign"
that will "encourage people to take an interest in their
superannuation and carefully consider any decision to
change funds". Still, the parallels between the British
and Australian introduction of the system have some
speculating that the new system will cause more harm
than good.
Indonesia: Delay Sought For Social
Security Bill (June 26, 2004)
Indonesian authorities are currently debating the
implementation of a new Social Security Bill that will
make it mandatory for all workers to enroll in a
universal government-run scheme. The Bill stipulates
that all state-controlled businesses with private
policies will also have to adopt the national plan. The
Indonesian Employers Association (Apindo) as well as
Indonesian labour unions strongly oppose the
introduction of the new bill, claiming that more
desirable results would be achieved by amending the
specific legal code that deals with employee benefits.
Apindo's secretary-general, Djimanto argues that, if the
new bill were adopted, "in the next 25 years, 25 percent
of employer's total costs would be labor costs, which
would overburden them." Djimanto also warns government
officials that the new bill would force the Indonesian
government to subsidize a greater portion of the costs
for unemployed persons facing "economic hardships."
Canada: Conservatives Target Martin
Over Pension Legislation (June 25, 2004)
Paul Martin's questionable business moves as Canada's
finance minister have many Conservatives calling for
justice. The party recently released several documents
which it claims demonstrate that Martin did something
"really suspicious" while in office in 1995. The
accusations surround Mr. Martin's shipping company,
Canada Steamship Lines, which stood to gain
significantly from the pension legislation being
deliberated at the time. Conservatives argue that,
despite warnings to "stay way from the file," a memo
obtained by the party suggests that following the
warning, Martin was still involved in the debate. Canada
Steamship Lines profited more from the pension changes
than any other company. The ongoing discussion over
Martin's corruptibility is, to many, evidence of how
"fierce" and "personal" the Canadian elections have
become.
India: Trade Unions Press for Higher
Pension Fund Rates (June 24, 2004)
Newly elected Prime Minister of India, Manmohan Singh is
under pressure to increase the rate of return for the
nation's largest government-run pension fund scheme. The
CITU, the Centre for Indian Trade Unions, voiced its
opposition to the country's decreased interest rates and
workers' inability to strike and demanded that the prime
minister "initiate immediate action in this regard." In
recent times the Indian government has cut rates on
several schemes that are popular with pensioners and
workers. The CITU is also pushing for a halt on the
government's bid to privatize India's two largest
airports.
Japan: Japan's Pension Problem May
Hurt Finances, S&P Says (June 24, 2004)
Japan's pension system stands to deal another blow at
the country's national debt. Major changes to the
scheme, which were scheduled to have begun already, have
been postponed for an undisclosed period of time.
Analysts worry that the delay will have adverse effects
on the country's finances, economy and sovereign
ratings. As it stands, Japan's government will need to
put up 2.7 trillion yen ($24.9 billion) by 2009 to fund
the state's contribution to the pension system. As
Japan's aging population grows, it is estimated that the
nation's retirees will increase by 40 percent to 34
million by 2018. In order to meet new demands, Standard
& Poor analyst Takahira Ogawa posits that, the
government will have to "push through drastic and
comprehensive reform, as well as a review of the
population policy".
UK: Workers Urged To Join Pension
Schemes (June 24, 2004)
British authorities have expressed concern over the
decreasing number of British nationals joining pension
schemes. TUC General Secretary, Brendan Barber, calls
the situation a "time bomb" and explains that, "unless
[young people] take out pensions, a generation faces
poverty in old age". Statistics show that 62 percent of
persons born in the 1950s and 72 percent of persons born
in the 1960s started a pension plan before the age of
30. Today's trends indicate that less than 50 percent of
persons of the same age have started saving for their
pensions. The TUC advises that as life expectancy
increases it becomes more important to start early
pension schemes. Would a voluntary pension system urge
younger workers to save?
Nigeria: House Passes Pension Bill
(June 23, 2004)
Nigeria's National Assembly has elected to accept and
put into effect the Contributory Pensions Bill. The new
bill was adopted by the House under the heading, "bill
for an Act to Repeal the Pensions Act, 11990 and to
Establish a contributory Pension Scheme for Employees in
the Public Service of the Federation, Federal Capital
territory and the Private Sector in the federal Republic
of Nigeria and for Matters Connected Therewith, 2004."
The committee accepting the bill was keen to point out
that the new act differs from the country's older
pension acts largely because of its pertinence to both
private and public pension sectors. The new pension's
bill entitles all Nigerian government officials and
private sector workers to a pension plan.
South Africa: Increased Number of
People Covered by Social Security Net (June 22, 2004)
The number of South Africans receiving social grants has
grown dramatically from April, 2002 to March, 2003. The
findings were outlined in the South African Human Rights
Commission's (SAHRC) Economic and Social Report,
published on June 21. The organization asserts that the
accrual is reflective of the "increased registration of
Child Support Grants for children up to the age of
seven." SAHRC extolled the government for its efforts in
children's rights advocacy but claimed that other
problems such as poor conditions, corruption and
improper documentation also needed attention and were
impediments to the provision of adequate social services
in other regions. The report also cited improvements in
land delivery claims from the government.
Israel: Israel
Sets Pension Sale (June 22, 2004)
Israeli government officials plan to capitalize on the
"renewed interest in the Israeli economy" by offering
pension funds of net worth 15 billion shekels, for
sale. The auction by Israel's Finance Ministry is an
effort to cut debt and boost Israel's attractiveness
to foreign investors. Yair Seroussi, who heads the
committee preparing the sale, describes the endeavor
as "a unique investment opportunity - a shortcut to
the Israeli market and access to many customers." The
three funds for sale, Mivtachim, the New Makefet fund
and Meitavit were seized by the government last year
and are closed to bidding from all Israeli banks that
have operations in underwriting, share brokering and
portfolio management. Israel's four largest insurance
firms have also been prevented from competing. Bidding
begins on June 22 and the winner will be announced on
September 9.
Brazil: Brazil Pension Funds
Double Bond Holdings in 10 Yrs, Folha Says (June 21,
2004)
Bloomberg News Agency reports a marked increase in
pension fund investments in Brazil. In ten years the
South American country has seen an increase of more
than twice the bond holdings for both corporate and
government bonds. In 1994, pension funds in Brazil
represented a mere 30 percent of investments in
government bonds. Current figures however, indicate
that pension funds in Brazil reached a record 140
billion reais during the last decade.
Malaysia: Self-employed laud
private pension scheme (June 21, 2004)
In Malaysia's current pension system, self-employed
workers are not eligible for the same tax benefits as
their counterparts in the Employee's Provident Fund
(EPF) scheme. The EPF affords workers tax exemption
from both their contribution to the unit trust schemes
and their income. Though self-employment offers
fiduciary advantages over other positions, many
workers still welcome a legislative change granting
self-employed persons a tax break. The Malaysian
government is now examining the prospect of such a
resolution, though authorities insist talks are still
in the beginning phase. There are several concerns
associated with the extension of the scheme to include
the over 1 million self-employed workers in the
country. The largest issues cited thus far are (1) the
possible need to change existing laws to incorporate
the new system and (2) the moderation of the new
scheme to stimulate a trickle down effect on the
Malaysian economy.
Ghana: SSNIT Pension Scheme Worse
Than AIDS-Teachers (June 21, 2004)
Hundreds of teachers from the Ghanaian district of
Krachi protested last week against what some call a
"suicidal" pension plan. The Social Security and
National Insurance Trust (SSNIT), Ghana's premiere
pension scheme, affords teachers approximately ¢100,
000 for every year they spend teaching. Incensed
teachers argued the country's retirement scheme is the
"worst thing to happen to mankind" since the AIDS
pandemic. The system, they complained, exists as a
painstaking way to "kill" retiree teachers. The
teachers, who acted in accord under the Ghana National
Association of Teachers, GNAT, later became near
riotous when they learned that neither of the
forewarned district officials was present to meet
their assembly. Teachers who participated in the
demonstration advocated for justice and equity to be
brought to the Ghana's pension system. They seek to
bring about the reenactment of the Teachers Pension
Ordinance of 1955 and the Government Pension Law of
1946, also known as CAP 30.
India: Family Pension To
Challenged Children Of Defense Personnel (June 20,
2004)
The Indian government wants to amend the law to grant
mentally and physically challenged persons, rights to
the pensions of their deceased parents. The moot is
reliant on several conditions such as the submission
of a certificate of guardianship from a caretaker and
a medical form proving the death of the involved
party's parents. Several ambiguities remain however.
The Mental Health Act of 1987, for instance, poses a
problem for older, mentally retarded persons who are
under the care of a guardian- categorized under the
law as "major". It indicates that once these
challenged persons make the transition from "minor"
status to "major," their guardianship is voided. A
mentally retarded person would subsequently not be
eligible to receive pension from their deceased
parents. It has since been proposed that Indian
Government simplify the law to make pensions more
accessible to mentally and physically challenged
persons.
United Kindgom: Fun And Anger On
Pensions March (June 20, 2004)
Thousands of screaming Britons marched through central
London to support the "Pay Up For Pensions" rally.
Retirees organized to protest what some call
unfulfilled promises by Prime Minister Tony Blair to
improve England's current pension scheme. Other
demonstrators, such as retired joiner Terry Hutt, were
more partial in their opposition and cited problems
such the heavy taxation on individual state pensions.
The dissolution of the state's retirement earnings
link was also identified as a major contributor to the
"pension crisis". The seriousness of the
demonstrations highlights the growing ire over the
country's weakened pension scheme.
Sweden: Sweden Shelves Plan to Use
Pension Money for Debt (June 16, 2004)
The Swedish finance minister, Bosse Ringholm, in tandem
with Swedish opposition leaders, this week rejected a
proposal to use 96 billion kronor from the retirement
fund to help curb the country's 1.3 trillion kronor
debt. Though Sweden is considered the least likely of
its European Union counterparts to be at risk for
poverty, Ringholm maintained that the decision was
final. Henrik Mitelman, chief bond analyst at SEB
Merchant Banking in Stockholm suggests that Ringholm's
conviction in the matter is in response to the party's
recent decline in popularity. With general elections
being held in 2006, "a debate on pension reductions is
the last thing [the Social Democrats] need.''
United Kingdom: Pension Crisis In
Store For Young UK? (June 15, 2004)
"Young people have started a slow pension time bomb." As
student loans and increasing housing costs force persons
under 30 to spend significantly more than their
counterparts of the 1950s and 1960s, fewer still are
investing in pension schemes. As people live longer,
they need larger pensions to help support them during
old age. This fact, coupled with the high cost of living
begs the question: will the youth of today become the
poor generation of tomorrow? Maybe it's time to
re-consider an augmented public pension program rather
than relying on personal willpower.
China: Businesses Grumble Over New
Pension Law (June 15, 2004)
The recently passed Laborer's Pension Law in Taiwan
continues to meet strong opposition from small and
medium-sized business owners alike. However, SME's have
a shocking record of collecting less than 10% of the
required allocation for their workers' pensions under
the current law. The law which goes into effect next
July raises the current 2 percent retirement pension
fund allowance per employee to 6 percent. Taiwanese
companies argue that they will have to increase their
current retirement reserve by NT$2.6 trillion over the
next few years to adjust to the new system. Many fear
that the new law will have even greater repercussions
for the Taiwanese economy. Business owners threaten that
a 4% increase in the pension fund translates to an
increase in labor costs which in turn may lead to
outsourcing, layoffs and devaluation of the New Taiwan
dollar. What about income support for their retired
workers?
Scotland: 1 In 4 Will Die Before Pension At 70 (June
14, 2004)
In Scotland, where the life expectancy in some areas is
as low as 63, many have expressed outrage at the bid to
raise the retirement age to 70. Union leaders have been
particularly outspoken about the matter noting that,
"with one in four Scots dying before they reach 70 they
would literally work until they dropped". Other
arguments against the proposed change in law maintain
that if the age of retirement rises, the quality of life
will deteriorate. Others argue that this suggested
change would have a crippling effect on the elderly in
more disadvantaged areas. In less privileged communities
it is estimated that 50 percent of the population would
die before reaching retirement age.
Russia: Thousands Rally Over Social
Policies (June 11, 2004)
Many trade union supporters took the street last week to
protest against the government's new plans. It would
replace healthcare and transportation benefits for
socially vulnerable groups with nonindexed cash
payments. Pensioners fear that the proposed 800 to 3,500
ruble monthly supplement to pensions and allowances will
not cover the value of privileges they receive today.
Inflation could eat away their income so they could not
pay for basic utilities like electricity or gas
supplies.
Barbados: 'Assess' Pension Plan
Risks (June 7, 2004)
Renowned Barbadian actuarial consultant, Charles
Herbert, warns of the need for Bajan authorities to
"assess pension plan risks". He maintains that there is
a problem of unawareness plaguing the nation whereby
many persons are duped into accepting poorly designed
pension plans. Benefit pension schemes, he explains,
qualify its benefactors for fixed contributions and the
employer bears greater liability. Contribution pension
plans on the contrary, do not offer standard benefits
and place the onus on the employee to save for
retirement. Herbert also counters that, if properly
managed, national pension plans will not be adversely
affected by changes in the foreign market. He
substantiates this claim by citing trends in neighboring
Caribbean territories such as Guyana where, in spite of
the dollar's devaluation, pension funds have seen huge
gains.
Japan: Pension Values to Fall by 14% in 20 years (June
4, 2004)
The real value of retirees' pension benefits will
decline by 13-14 percent over the next 20 years after
the pension reform proposals are put into practice. The
drop in real terms is the consequence of the benefit
adjustment system tied to fluctuations in the labor
force. The system, also called the "macroeconomic
slide," will be in place between fiscal 2005 and 2023.
The government incorporated this system into its reform
proposals to curb benefits as the labor force shrinks
due to the aging population and the low birthrate.
Taiwan: Ninety Percent of People in
Taiwan Worry that they Will not be Able to Support
their Children and to Save for their Life after
Retirement. (May 31, 2004)
(Article in Chinese)
One recent report showed that 84.1% people who are
working in Taiwan worry that they will not be able to
support themselves after retirement. More than 91%
people think that the Labor Protection Law cannot help
retirees afford to have a basic livelihood.
China: The Social Insurance
Pension Trials in LiaoNing Province - from "Company
Insurance Protection" to "Social Insurance Protection"
(May 31, 2004)
(Article in Chinese)
ShenYang City of LiaoNing Province is the only province
that has a complete social protection pension system in
China. The Government changed the social protection
pension system for some 2,900,000 retirees: 1,750,000
had been employees in nationally - owned companies, as
well as more than 1,000,000 people who were living in
cities but had a low standard of living. Reporters have
tracked this major transition for 3 years and outline
the difficulties of constructing a new system for
"social insurance protection".
South Korea: Fix Pension Scheme
Now (May 29, 2004)
A civic campaign against the new national pension scheme
is spreading on the Internet. Korean workers are
fighting the proposals of the top government
policymakers to increase contributions and cut back
benefits. To prevent street demonstration President Roh
Moo-hyun encouraged a publicity campaign to explain the
changes in detail.
China: There will be 1,500 million
Retirees in China in the Year of 2030. China Intends
to Build a New Social Protection System to Meet their
Needs (May 28, 2004)
(Article in Chinese)
Experts who are participating in the social protection
pension research association agreed that China will
build a new, typically Chinese, social protection
pension system through the cooperation of business, the
public social protection pension, business banks and
individuals. The new system will smooth out some of the
over-reliance on the government and the
under-participation of individuals, they say.
Canada : Pension Plan Overhaul
Needed to Fix Problems, Consultants say (May 27, 2004)
Canada's private pension plans seems to need reform in
order to fix the problems aggravated in recent years by
patchwork measures. These measures were introduced to
meet the needs of a rapidly changing work force. Many
company plans were originally built with the idea that a
worker spent his or her entire career in that company
and retired at the age of 65. Nowadays these plans
reveal that workers follow a different career path. More
flexibility, fairness and simplicity need to be
incorporated into the private pension system.
Malta: Pensions Reform to Come
into Force by End of December (May 27, 2004)
Prime Minister Lawrence Gonzi stated that his Government
is resolute to pass the new pension reform by the end of
this year. The reform would bring, according to Mr.
Gonzi, a sustainable economic basis and adequate
pensions.
Japan: Millions of
Citizens Entangled in Pension ID Befuddlement ( May 27, 2004
)
Just to make
Japan's situation more complicated, it
was revealed that about 7 million people may still
have more than one pension identification number. This
mistake could lead to smaller payouts for pensioners.
If correct procedures are taken and payment records
under the different numbers integrated, then
pensioners should receive their full benefits.
However, this might not happen for everyone. Each
person, switching from one pension program to another
has to do the necessary paperwork to ensure a smooth
change and prevent "double registration" into the
pension system. The multiple registration problem is
confusing for social insurance offices and it is
likely to take years to sort out the mess.
Germany: Germany 's 'Grumpy Old
Man' Fights Pension Cuts ( May 26, 2004 )
Walter Hirrlinger, the leader of
Germany
's most powerful lobby is strongly criticizing the
government for cutting pensions and increasing health
care cost as part of the "Agenda 2010" reforms. His
VdK pensioners lobby movement has 1.3 million members
and represents some 20 million retirees, a third of
the electorate. Mr. Hirrlinger does agree that some
cutbacks are necessary. However, many different cuts
here and there affecting the small incomes of older
Germans who helped built up the country after the war
is scandalous.
South
Korea : Pension
Contribution to Rise Sharply ( May 25, 2004
)
The South Korean government approved a new
pension plan starting in 2010. The plan will increase
workers' contributions into the national pension plan
and reduce pension benefits. The measures aim to
financially stabilize the pension scheme and prepare for
an aging society. However, the population is fiercely
protesting the new plan that will aggravate the
financial situation of elderly Koreans. President Roh
Moo-hyun recommended that the plan be implemented
smoothly through publicity campaigns persuading the
public of the necessity of the pension reform.
United Kingdom : Property 'is no
Substitute' for Pension ( May 25, 2004
)
An independent pension research group reports in
a new study called "Property or Pension," that a third
of the population is saving in property hoping it will
provide future retirement income. Despite the soaring
market, property will at best be a complement to
occupational or personal pension but not a substitute.
Older people need to live somewhere. Owning a home
reduces living costs in retirement by forty-five percent
compared with renting. However, people cannot rely
solely on their equity.
Japan: Poll: 70% Want Drastic
Reforms to National Pension System (May 25, 2004)
The Yomiuri Shimbum conducted a nationwide survey on
3,000 people. Seventy percent of eligible voters
declared they wanted to see the national pension system
drastically reformed. Another seventy percent of those
surveyed also declared they did not trust the pension
system. This dissatisfaction was accentuated when it was
publicly revealed that the nation's lawmakers failed to
join or pay into the national pension system.
China : There are more than
100,000,000 Elders in
China who have
Life Insurance ( May 24, 2004 )
(Article in Chinese)
Beijing - There are more than 100,000,000 Chinese
elders who have life insurance. The National Statistics
Bureau revealed that there are 155,600,000 who joined
the life insurance program by the end of the year 2003,
which is 7,700,000 more than the last year.
Japan: Confidence Crisis Hits Pension Scheme (May 24,
2004)
The continual raising of premiums and lowering of
benefits worry young people. When it is their time to
retire, will there be any money left? The recent scandal
of politicians not having paid their compulsory premiums
exacerbated the lack of trust in the pension system. As
a whole, the Japanese pension system is very complex. It
is composed of three different schemes: Kosei Nenkin for
salaried workers, Kyosai Nenkin for government officials
and Kokumin Nenkin for everyone else. With the low birth
rate and the aging population the pension systems are
becoming financially strained and if people do not pay
their contributions then the system could go
bankrupt.
India: Dada-Dadis Relax, Bonds On
Track (May 24, 2004)
The new government is about to launch dada-dadi bonds.
These bonds for senior citizens age 60 and above will
carry a higher interest rate than other saving plans.
Greater flexibility in terms of exit options will also
be available through premature encashment and
transferable bonds.
India :
PFRDA to Allow 6 Firms To Manage Pension Funds (May
22, 2004)
To promote competition and ensure higher returns
to senior citizens, the Pension Fund Regulatory and
Development Authority (PFRDA) will allow six companies
to manage long-term savings of over 300 million
employees in the country. The new pension system should
start after the interim PFRDA appoints a central
record-keeping and accounting agency and pension fund
managers by December.
Japan: Au Japon, le
Scandale des Retraites Provoque des Démissions en
Cascade (May 19, 2004)
(Article in French)
After the government passed an unpopular pension reform,
it was revealed that political leaders themselves had
not been paying into the compulsory pension scheme. This
new scandal in Japan is devastating for all political
leaders, including Prime Minister Junuchiro Koizumi. Mr.
Koizumi declared that his case did not present any legal
problem and that he was not going to resign.
Nonetheless, to create a diversion, the Prime Minister
suddenly announced an official visit to North Korea.
Nigeria: 'Why Pension Schemes Fail
in Nigeria' (May 18, 2004)
In Nigeria, the pension scheme fails to help retirees.
It suffers from poor administration, poor supervision,
corruption and inadequate build-up of the fund. At the
2nd Biennial Pension Schemes Seminar in Abuja,
Commissioner of Insurance, Dr. Oladipo Bailey said that
without reform, the annual pension bill could exceed the
annual wage bill of the active workforce. To prevent a
funding shortage, Dr. Bailey recommends shifting from a
non-contributory to a contributory pension scheme in the
public service.
United Kingdom: Protection at a
Price for Pensions (May 17, 2004)
The British government will provide four hundred million
pounds in compensation to workers who lost their
pensions when their employers went bust. This action
will however provide only limited relief for many
workers involved. Instead, the writer argues that reform
should focus on improving the running occupational
schemes with tax simplification, raising trustee
standards and new regulation. The government hopes
nonetheless that the gesture will help rescue
improvident employers who failed to honor their
employees' pensions.
Africa: Les Africains Encaissent mais n'Oublient pas
(May 19, 2004)
(Article in French)
The African veterans who fought for France during the
Second World War are finally getting a raise in their
pension benefits. Their pensions were frozen in 1961 as
French colonies were becoming independent. This French
government raise recognizes the men that fought for
France but it cannot erase the pain and the years of
silence that preceded it.
Germany: German Lawmakers Send
Pension Bill To Mediation Committee (May 14, 2004)
The upper house of Parliament rejected a bill that would
have changed how pensions are taxed. A mediation
committee will now discuss the bill before resubmitting
it to the lower and upper houses. The law will tax
pensions at retirement instead of when people pay into
the public system. The government hopes the law will
ease the tax burden for workers and encourage them to
use their tax savings to build up private retirement
assets.
China: No Pension Payment to
Retired Teachers in China (May 12, 2004)
The Taiwan Ministry of Education published new rules for
retired schoolteachers. They said that Taiwanese
retirees are not entitled to monthly pension payments if
they stay in China more than 183 days. Schoolteachers
who now reside in China and receive a monthly pension
are required to apply for a lump sum pay out, which will
be about half that given to a new Taiwan resident. Since
this provision does not apply to retirees living
elsewhere than China, it seems to continue the legal
battle between Nationalists in Taiwan and Communists in
China.
China: Guangzhou - RMB 890,000,000 in
Pension Monies was Diverted to Other Uses and
Considered a "Legal" Mistake. (May 12, 2004)
(Article in Chinese)
JieMing Zhang, the director for Guangzhou Labor and
Social Protection Department, told reporters that the
fact that pension money was diverted to other uses is
related to a special historical background. In 1993 the
China Labor Department released a file that the local
government should invest its pension money to other uses
to gain extra value after keeping certain amount on
hand. Thus it was legal according to the national policy
at that time.
Switzerland: Controversial Pension
Cuts Come Under Fire (May 10, 2004)
On May 16, Swiss voters will decide whether or not they
support the new pension plan approved last year by
Parliament. This plan would raise women's retirement age
to 65. Benefits for widows and pensions would only be
corrected in line with inflation every three years
instead of every two years. The Left is strongly
criticizing the plan. They argue that the state pension
is still strong and that it is wrong to weaken the most
important pillar of the social security system. Measures
to make retirement more flexible should be discussed
instead.
Japon: Scandale des
Retraites au Japon : le Chef de l'Opposition
Démissionne à son Tour (May 10, 2004)
(Article in French)
The leader of the opposition, Naoto Kan and the Prime
Minister's first advisor Yasuo Fukuda resigned because
they had not paid their contributions for some time.
This new scandal emerged as the government and the
opposition finally reached an agreement regarding the
new pension bill.
Pakistan: Pension Funds Scheme: World Bank Opposes
"Half-Baked Scheme" (May 7, 2004)
The World Bank asked the Pakistani Ministry of Finance
to postpone the announcement of its new pension fund
scheme for government employees. Instead, the Ministry
should put in place the required infrastructure, prepare
a comprehensive legal framework, engage professionals
and then make it public. Three retirement options are
considered: guaranteed return, defined contribution and
defined return. The type of pension fund should be
decided on at the end of May.
United Kingdom: Pensions
Complexity 'Unfathomable for Consumers' (May 6, 2004)
According to Christine Farnish, chief executive of the
National Association of Pension Funds, the United
Kingdom has one of the most complex state pension
systems in the world. This makes it difficult for
consumers to make informed choices about saving for
retirement. The industry should make a better use of its
£1.4 billion marketing budget to help educate
consumers.
United Kingdom: Pressure Grows for Payout on Pensions
(May 5, 2004)
The former UK welfare minister Frank Field and the Labor
Member of Parliament Derek Wyatt laid an amendment to
the pension bill. It would ensure retrospective payment
to the 60,000 workers who have lost out on their
pensions after their former employers went bust. This
new amendment puts fresh pressure on Prime Minister Tony
Blair to pay compensation to thousands of people facing
poverty in retirement.
Mexico: Mexico Loosens
Pension-Fund Rules (May 5, 2004)
The Mexican government will allow the nation's pension
funds to invest part of their $38 billion of assets in
global stock markets and bonds. They hope that
diversifying investment options will help provide better
returns for the savings of 32 million workers. With the
reduction of the direct correlation between investments
and the Mexican economy, lawmakers also hope to make the
system more secure.
United Kingdom: Lost Pensions
Payouts 'Peanuts' (May 5, 2004)
According to Kevin Brennan, Cardiff West Member of
Parliament, the money needed to compensate workers who
lost their pensions after their firms went bankrupt is
"peanuts." Research by two trade unions show that the
amount needed - £76 a year for 30 years - is
significantly lower than previously thought. This money
could help restore confidence in the British pension
system.
Japan: A Tough Sell: Japanese Social
Security (May 5, 2004)
In Japan, almost 40 percent of young workers are not
paying their social security contributions. To encourage
payments, the government launched an advertising
campaign. However, reporters discovered that the actress
featured in the ad was not paying her contributions
either. Now, reporters revealed that seven ministers,
one third of Prime Minister Junichiro Koizumi's cabinet,
neglected to pay into the National Pension Plan.
Furthermore, the leader of the opposition Naoto Kan also
neglected to pay his contributions for nine months in
1996 when, as health minister, he was in charge of the
national pension system. With all these scandals, how
can the younger generation have any confidence in the
system?
Europe: Britain Scores Well in Pension Study (May 5,
2004)
According to a EU report, the new nations entering the
EU face a pension catastrophe. High unemployment rates
and generous early retirement dates make the pension
systems unsustainable. However in the new EU nations,
relatively low state pensions soften the economic impact
on the country's budget whereas in other EU countries
like France and Italy, state pension benefits are a far
greater burden on the public purse.
China: About 1,400,000 Peasants
Start Receiving Pension (May 3, 2004)
(Article in Chinese)
Beijing - By the end of the year of 2003, about
60,000,000 peasants had bought old age insurance. The
money accumulated to around RMB 26,000,000,000. About
1,400,000 peasants have started receiving their
pension.
China: US-Based Conservative
Organization says China should Reform Pension system
to Prepare for the "Tide" of Older Persons in the Year
2015 (May 3, 2004)
(Article in Chinese)
Washington's conservative International Strategy
Research Center recently released a report showing that
the aging population in China will increase dramatically
in the future 10 years. But Chinese who read the article
must examine whether the Chinese government should
reform its public pension system. What kind of changes
can improve the pension system in China to benefit all
older persons, rather than a few private
companies?
Wales: Pension Changes Stir Union
Members Into Action (April 29, 2004)
Teachers in Wales are thinking about protesting against
losing a large proportion of their pension if they
decide to take early retirement. This pension system
change will affect all public workers but teacher unions
claim it is of particular concern for their members.
Teachers in their 60's can have difficulties dealing
with the stress and work that come with a
classroom.
Japan: Japan Lawmakers Disclose
Pension Payments (April 29, 2004)
Three Cabinet members were found to have failed to pay
their premiums for years. In response, lawmakers decided
to disclose how faithful they have been in paying their
own premiums. More and more Japanese workers are
opting-out of the system because they think it is too
expensive and are concerned that they might not see any
money when they retire. The Parliament with its pension
bill is trying to ease people's fears and reduce the
number who opt out. In 1995, sixteen percent of the
self-employed individuals of eligible age failed to pay
their contributions. In 2002, they were thirty-seven
percent.
Taiwan: HuaLian County will Amend
a Helpful Policy that Lets Elderly and the Disabled
Take Buses for Free (April 29, 2004)
(Article in Chinese)
HuaLain County - The county government started the
beneficial policy that lets elderly and the disabled
take the bus for free during February. However because
of the problems in putting the policy into practice, it
will be changed to refunding the cost with presentation
of bus receipts. Low income old persons will be refunded
through a county government check.
Canada: Air Canada's Pension Puzzle
(April 29, 2004)
Emerging from bankruptcy protection, Air Canada has a
$1.2 billion shortfall in the airline's pension plan.
While federal pension regulators are willing to extend
the amount of time given to the airline to pay into the
fund but this could set a precedent. Therefore, the
government should respond in a comprehensive way and not
in a series of disconnected one-offs.
Germany: German Lower House Backs
Changes in Pension Taxation Rules (April 28, 2004)
After Parliament's approval of the cuts in state pension
benefits and a longer contribution period, Germany's
lower house now passed plans to modify taxation rules
for pensions. The changes mean Germany will start taxing
pension payouts from next year and in return, phase out
levies on workers' monthly contributions. German
lawmakers are taking all these measures to ease the
budget deficit and trim welfare costs.
United Kingdom: The Young Choose Cars
and Marriage (April 28, 2004)
The Association of British Insurers (ABI) says in a new
study that occupational pensions and tax incentives are
the best solution to encourage young people to save for
their retirement. However, the greater problem may be
the affordability of saving. Many young people don't
have much money and they will rather spend it on
holidays than saving it for retirement. The ABI also
recommended the government to increase its efforts to
educate the younger generations and encourage the
industry to promote long-term savings.
United Kingdom: Blair Hints at Pension Victims Aid
(April 28, 2004)
Prime Minister Tony Blair hinted in the House of Commons
that the government might step in to help workers who
have lost out when their pension schemes went bust. Mr.
Blair said the government would study the cost
implications and get back to Parliament as soon as
possible.
China: The Management Policy for Companies' Pension
will be put into Practice. Which Financial
Organization will get Benefits? Which Investment
Market will be Popular? (April 26, 2004)
(Article in Chinese)
Recently the Department of Labor and Social Protection,
the Bank Administration Association, as well as the
Stock Administration Association released the Tentative
Policy for Company's Pension Administration. This policy
shows that the preparation for company pension
administration is ready. The next questions people are
asking include: Which financial organization will get
benefits? Which investment market will be popular?
France: Versements, Avantages Fiscaux, Rentes : le
Plan d'Epargne Retraite Populaire Passé au Crible
(April 23, 2004)
(Article in French)
Even before the creation of the Popular Pension Saving
Plan (PERP plan d'épargne retraite populaire) bankers
and insurers were battling to sell this new product. The
PERP represents a big challenge for the banking industry
since 9.2 million taxable workers could pay into this
new plan in the next five years.
France: Jean-Pierre Raffarin
Signe l'Acte de Naissance des Fonds de Pension (April
23, 2004)
(Article in French)
The French government just signed the decree giving
birth to the pension fund industry. This new product
called the Popular Pension Saving Plan (PERP plan
d'épargne retraite populaire) is intended to give more
freedom to people to plan for their retirement while
preserving the pay-as-you-go system. This plan is a long
term engagement but it offers tax advantages. The
contract has to be signed with insurance companies,
giving them a important new market. As a matter of fact,
this new industry could reach the billion euros this
year.
Japan: New Firms Opt Out of Pension
Program (April 21, 2004)
Nearly twenty percent of the firms that started up in
fiscal year 2002 did not join the national pension
program for employees although it is compulsory. This
situation leaves thousands of workers unable to
contribute at their workplace and puts financial strains
on the already shaky system. The Social Insurance Agency
needs to reduce the number of firms opting out of the
system but it has not yet taken drastic steps to do so.
China: Research Indicates that
China will be Faced with a Huge Tide of Aging
Population (April 20, 2004)
(Article in Chinese)
Beijing - American Baldwin Financial Company and the
Center of Strategy and International Study (CSIS)
jointly released a report that China will be faced with
the huge tide of aging population. These conservative
institutions claim that the increase in the aging
population will hurt economic development and will bring
"unbearable pressure" to the public budget and to the
extended family system that is common in China. As GAA
notes, the Government of China is taking a number of
steps to prepare for the transition and generally
regards its older population as a positive resource to
the country.
United Kingdom: Dispossessed
Pensioners are on the March (April 19, 2004)
Workers who lost their pensions when their company went
bankrupt marched to New Scotland Yard this Saturday to
"report the theft." About 70,000 people are confronted
with a poor retirement but the government is still
resisting the calls for compensation.
Presentation for the United
Methodist Women at CCUMC, Park Avenue
On April 13, the United Methodist Women at CCUMC invited
Global Action on Aging so it could present its work.
Intern Magali Girod made a presentation about her
Internet research on pension issues in the world. She
focused on the mutual fund scandals in the US, on the
increasing amount of debt among the elderly population,
on the pension reform in Europe, on the importance of
non-contributory pension in least developed countries
and finally on women and retirement. She also explained
her administrative work for the non-governmental
organization. Here is a copy of her speech.
Colombia: Reforma Pensional Esta
Semana al Congreso (April 13, 2004)
(Article in Spanish)
A new pension plan will be presented to Congress in
Colombia. The new plan follows heated debates between
government officials. One major problem centers on
imposing pension caps to limit on how much money will be
spent on public pensions. These caps could cause
difficult economic conditions for the older
population.
China: Occupational Pensions
Creep into the Market (April 12, 2004)
Another part of the welfare fund, the occupational
pension, just entered the capital market in China. Some
employers run voluntary private pension funds. The
Ministry of Labor and Social Security released
regulations saying that employers can authorize some
qualified institutions to manage the pension and conduct
investments. However, foreign institutions are not
allowed to provide management services independently in
China. Nonetheless, local partnerships, according to
this report can open back doors to foreigners, which
could attract $12 billion dollars each year. Is this the
slippery slope of high-risk management of old Chinese'
future?
United Kingdom: Britain Must Learn
from US Pensions Pain (April 12, 2004)
The Pension Protection Fund (PPF) created by the British
pension bill is very similar to the US Pension Benefit
Guaranty Corporation (PBGC) now facing a huge amount of
debt. By reducing company's contributions into the fund,
Congress did not reduce the risk of US pension
underfunding. Instead, regulators shifted the risks from
the PBGC to US taxpayers. The British PPF must learn the
lessons from the US PBGC. Therefore, the British
government must address the structural weaknesses in
pension scheme regulation rather than trying to paper
over the cracks like the US government is doing.
United Kingdom: Compensation
Claims Fuel Pension Revolt (April 10, 2004)
Two hundred ninety Members of Parliament, most of them
Labor, signed a Common motion calling on the government
to compensate 60,000 workers from bankrupt companies.
After contributing all their working lives into the
company's fund, they only received 10% of their salary
or nothing at all. With the pension bill, the government
has announced the creation of a Pension Protection Fund
next year, but it will leave out all of those already
hurt. Many MPs believe practical politics and fairness
will force Ministers to change their minds before the
bill becomes law.
United Kingdom: MP Revolt Hope for Pensions (April 7,
2004)
The British government is facing a revolt from its own
MPs regarding the Pension Bill. This bill introduces a
Pension Protection Fund for all workers who lost their
pension benefits when their employers went under.
However, this measure does not apply retroactively,
leaving out 60,000 people without any proper pension.
Opposed Labor MPs could force the government to change
the bill by adding a clause at the last minute to
include current victims, or by proposing an amendment.
China: Company-Based Pension System
will be Put on Trial beginning May 1, 2004, and the
Current Retirees will get their Payments from the
Company Pension as well as from the Government Social
Security Program. (April 3, 2004)
(Article in Chinese)
The Department for Labor and Social Protection announced
that Temporary Act for Company Pension will be put into
effect on May 1st. At the same time, the Act to
Nourishing Companies' supplementary Insurance System
will be abolished.
Europe: Europe's Pensioners
Hit Streets (April 3, 2004)
Hundreds of thousands of people across Europe marched to
demonstrate against the new reform of the welfare
system. Old people in Rome, Berlin or Paris arrived on
buses or special trains to show their discontent against
the higher cost of living and the welfare cuts. Younger
people also participated in the march because they do
not want to retire at an advanced age. The European
governments see reform as the only solution to continue
paying pension benefits to an aging population. However,
unions see it as a strategy to cut bureaucracy costs and
revivify the economy by letting old people get
poorer.
Japan: Koizumi Pledges Passage of Pension Reform Bills
(April 1, 2004)
Prime Minister Junichiro Koizumi confirmed his
determination to have the government-sponsored pension
reform legislation passed during the ongoing Diet
session. This bill constitutes "drastic reforms" to keep
the pension system afloat. The reform intends to limit
benefits, increase premiums and increase government's
contributions to the state pension scheme. The Japanese
Prime Minister also supports the future integration of
the existing pensions programs for the self-employed,
the salaried workers and the public servants. However,
the Democratic Party of Japan believes the government's
pension reform will only delay solutions to the
fundamental problems of the current pay-as-you-go
pension system.
Uganda: Pensions Debate Kicks Off
Today (April 1, 2004)
In Uganda, Parliament is debating a motion, presented by
Mwenge South MP, Dora Byamukama. This motion intends to
force the government to apply Article 254 of the
Constitution making it mandatory for the government to
pay retired public officers a tax-free pension, subject
to positive review, in a "prompt" and "regular" manner.
So far, the government owes Shs 276.7 billion in pension
benefits to more than 69,000 former public officers. For
its defense, the government used Article 93 arguing that
a motion cannot impose a charge on the Consolidated
Fund. For old people's advocates, the government is only
taking advantage of vulnerable pensioners.
New Zealand: Resistance to
Retirement Saving Reaching Critical Point (March 31,
2004)
The Annual Sovereign SaverPulse survey on savings and
investment attitudes reveals that more and more New
Zealanders are resisting the need to save for their
retirement. With the booming economy people have more
income and most of them choose to live for today instead
of saving for their future. They don't feel encouraged
to start saving and feel confused about the
proliferation of products in the market. The survey also
points out that a large number of people are in favor of
some form of compulsory savings scheme that would
provide a suitable type of investment strategy.
Canada: Air Canada Gets Pension
Agreement (March 31, 2004)
Air Canada settled a disagreement over pensions with the
International Association of Machinists and Aerospace
Workers, the airline's largest union. Due to financial
difficulties and rising costs, the airline restructured
and so far a united front of unions opposed strongly any
changes in the pension plans. This front was broken when
the IAMAW agreed to the new pension system giving
workers the right to choose between a defined-benefit
plan and a defined-contribution plan. The company argues
that changes are necessary to preserve employment.
However, the pension changes are shifting future
financial risks away from the company to the employees.
Colombia:
Colombia's Uribe May Phase Out State Pension Plans
(March 31, 2004)
The Colombian government and the main political parties
reached an agreement on a pension bill that could phase
out the state subsidized pension system and tax the
highest pensions. The government wants to reform the
state pension to make it self-sustaining so it does not
need to use the national budget to keep it afloat. A
system of individual savings in Social Security could
replace the current system.
Bolivia: Bolivia Caps Pensions After Blast (March 30,
2004)
It took the suicide of an unemployed miner who blew
himself up in the Congress building to make the Bolivian
government change the country's pension system.
President Carlos Mesa changed the monthly state pension
to $1,000 to ease pressure on the cash-strapped system
and allow more people to get benefits. Up to that
incident, thousands of unemployed miners were not
getting retirement benefits because of a shortage of
public funds and inconsistencies between the old state
pension system and the private retirement scheme created
in 1997.
United Kingdom: Pensions March 'to
Be Held this Summer' (March 30, 2004)
On June 19, 2004, the Trade Union Congress will
organize a national demonstration in London highlighting
the depth of the pension crisis in United Kingdom. The
demonstration will support workers who lost their
pension when their company went bust. It will also focus
on the fact that old people can face poverty in
retirement and that politicians of all parties now avoid
tackling the depth of the problem.
Germany: Thousands of German
Pensioners Protest Reforms (March 29, 2004)
Tens of thousands of German pensioners, some in
wheelchairs or with walking sticks, took the streets to
protest against the government's pension reforms. As
part of "Agenda 2010" Chancellor Gerhard Schroeder's
government froze pension benefits this year and
increased the cost of health care. Legislation passed
this month will also slow the rise in future pension
payments. While many believe these reforms are
necessary, this discontent challenges for the government
as elections are coming up and pensioners are very
active voters.
Czech Republic: Analysts Criticize
Failure on Pensions (March 25, 2004)
The Czech government came out triumphantly of a pension
reform meeting mid March but analysts believe the
coalition only pushed back real reform for years putting
the economy of the country at great risk. In 2003, the
government paid 28 percent of the state budget
expenditures into pensions and at the same time the
Finance Minister announced a country's debt of 493.2
billion Kc. Economists argue the Czech debt, increasing
pension costs, an aging population and a low birth rate
form a deadly combination and that changes need to
happen soon. They say the system cannot wait for the
next 2006 parliamentary election for new pension-reform
proposals.
Japan: Actress Gaffe Highlights
Pension Problems (March 24, 2004)
To persuade reluctant citizens to pay their
contributions into the state pension scheme, the
Japanese government hired a popular actress Makiko Esumi
for an advertising campaign worth 380 million yen.
However, it turned out that the actress had not paid her
contributions either, embarrassing the government. This
event shows the delicate situation the Japanese pension
system is in. Though contributions are officially
mandatory, many, especially young people, opt-out. This
situation leaves the government with less income to pay
pension benefits for an increasing number of retirees.
New Zealand: Citizen's Pension in
New Zealand (March 2004)
Larry Willmore, economist in the UN's Department for
Economic and Social Affairs, called GAA's attention to
this paper on a citizen's pension. The article analyses
the New Zealand experience for ideas. The author, Alison
O'Connell of the Pensions Policy Institute in the UK,
points to the benefits: "This simple system removes the
need for national insurance in keep track of entitlement
to state pension based on contributions made during
working life. It treats residents the same whether they
were high or low earners, or whether they had spells of
not earning. If set at a high enough level, the
Citizen's Pension removes the need for extensive
means-testing."
France: 1982, la Retraite à 60 ans
(February 11, 2003)
(Article in French)
The French pension system, created in 1945, is based on
the idea of intergenerational solidarity. Contributions
from current workers pay for pension benefits of
retirees and at the same time give workers the right to
a future pension. Since the early 1990's, the different
governments in place all tried to reform the system to
make it more sustainable but they encountered a lot of
difficulties. This article presents the major dates and
events in the evolution of the French pension
system.
Japan: Funds: Japan State Pension Fund Will Trim its
Investments (March 23, 2004)
Japan is trying to tidy up the investments of its state
pension fund. To do so, it will invest $54.3 billion of
new money in financial markets mostly into domestic
bonds. The new strategy follows a model portfolio
designed by an advisory panel made up of market experts
and academics.
China: Financial Department in GuangZhou Loan to
Employees at Nation-Owned Companies for their Health
Insurance and Hospitalization (March 25, 2004)
(Article
in Chinese)
The city government issued the report about "Loan to
employees at nation-owned companies to help them for
their health insurance". The government decided to loan
to these employees to help them for transitory basic
health insurance and financial aid when they are sick
and need help.
China: Companies Pension will be in stock. Who will
share the million dollars "Cheesecake"? (March 23,
2004)
(Article
in Chinese)
The Act for Companies Pension Management (temporary act)
- will be called "Trial-On Act" has been planned and
debated for 5 to 6 years and will be put through in May
2004.
United Kingdom: Warning Over
Final Salary Safety Net (March 23, 2004)
The British government plans to create a Pension
Protection Fund (PPF) to protect employees' life savings
if their company goes bust. However, final salary
pensions could still be endangered if the PPF acts like
a pension fund and invests in shares. Therefore, Pension
Secretary, Andrew Smith, should tell employees that the
government does not aim to provide "guaranteed"
benefits. Benefits could also be cut if the demand on
the PPF becomes overwhelming.
Japan: National Pension Plan Fell into
Red in FY 2002 (March 22, 2004)
For the first time in 17 years, the national pension
system paid out more than what it received in
contributions. The government used the reserves to make
up for the 38.2 billion yen shortfall. The Social
Insurance Agency secured contributions in 2003 but the
growing number of pension recipients coupled with a
declining birthrate still pressures the system. Unless
it can find more resources quickly, the reserves will
eventually be eaten away to pay pension benefits.
However, many intervention strategies are available.
United Kingdom: Warning: Property
is Not a Pension (March 21, 2004)
The British government decided to allow pension funds to
invest in residential property and not only in
commercial property like today. This would give big tax
advantages for the owners of second properties but it
carries big risks. Property was always considered as a
secure investment but prices can go up and down leaving
future pensioners in great difficulty. Also, if the
entire pension fund is used to buy properties, then the
only solution to have an income in retirement years is
to sell the home, leaving pensioners without a place to
live.
China: The Farmer Labors who are at ZhengZhou Get
Pension so that they do not have to Worry Even if they
Left their Farms. (March 17, 2004)
(Article in Chinese)
ZhengZhou - these farmer labors at ZhengZhou will get
the same pension as the employees who are living at the
city. The government at ZhengZhou issued that the farmer
labors should be given pension so that they do not have
to worry about leaving their farms.
Argentina: Iniciativa del la
Provincia de Mendoza: Ancianos Cobrarán en su Casa por
los as Altos (March 14, 2004)
(Article in Spanish)
The Mendoza, Argentina, provincial government launched a
campaign to help the Aging community. Old persons
suffering disabilities living in rural Mendoza areas
will now receive their pensions directly in their homes.
This new initiative aims at preventing assaults and
theft from many seniors who walk alone with pension
money in their pockets.
China: The Farmers at ChangShu JiangSu Province Enter
the Social Protection Security Network (March 13,
2004)
(Article in Chinese)
In the rural areas at ChangShu, JiangSu Province, the
rate for the basic pension protection, the rate for the
cooperated medical towns, and the rate for the minimum
living standards reach 100%. All of the farmers in the
rural areas will be protected when they are old, when
they are sick and when they need money.
China: Farmers in Beijing will have the First Hearing
about the Temporary Act of Rural Social Pension (March
12, 2004)
(Article in Chinese)
On March 11 in Beijing, about 20 farmers from DaXing
District will represent more than 300,000 rural farmers
to speak on the Temporary Act of Rural Social Pension,
which will be the first hearing for farmers in China.
United Kingdom: No one Escapes a
Share of the Blame (March 9, 2004)
The Scottish judge, Lord Penrose wrote an 818-page
report on Equitable Life's executives and the
inadequacies of its board leading to the crisis that
brought down the oldest assurer in Scotland. Equitable
Life policyholders have faced drastic falls in the value
of their policies since the mutual lost a legal fight in
the House of Lords. Having problems with paying the
guarantee annuity rate they had promised to investors,
the Lords ruled that the mutual had to meet its
obligations. The report insists that Equitable had
financial and management problems before the annuity
guarantee problem. The House of Lords' judgement led to
the crisis but it was not solely responsible for it.
United Kingdom: 80% 'Unhappy with Pension Savings'
(March 16, 2004)
New research in the UK reveals that eight Britons out of
ten are unhappy with their future retirement income and
that they intend to take action to boost it. However,
most people see their property as the solution to give
them a better standard of living during retirement.
Equity release schemes and living in smaller homes are
sensible options but people should not have all their
savings in just one basket, especially since houses are
subject to price fluctuations.
Australia: Retirees Getting by on
Low Incomes (March 16, 2004)
In Australia, pensioners rely firmly on the state
pension. People retire early, get their superannuation
in a lump sum, pay off their debt and use up a lot of
their assets until they become eligible for old age
pension. Even living on a small income has not stopped
them from retiring early. This trend worries both the
treasurer and the Prime Minister. They are thinking of
increasing retirees' private contributions to help the
government pay for the health care and the pensions of
older adults.
Nigeria: Senate Okays National
Pension Commission (March 12, 2004)
Following the Act establishing contributory pension
schemes for employees in the public service, Federal
Capital Territory and the private sector, the Senate
approved the creation of a National Pension Commission.
With its 14 members, the Commission will have to
regulate pension matters in both private and public
sectors.
Germany: Pensions Sink with Workforce
(March 12, 2004)
The German Parliament radically changed the way national
pension benefits were calculated. The level of
retirement benefits will now depend on the size of the
work force in relation with the number of retirees. In
consequence, pensions will automatically decline as the
German population shrinks. Model calculations show that
the average pension level could fall from 53 percent of
a worker's last net income after taxes to 43 percent.
With this change, the government wishes to keep payments
into the pay-as-you-go national pension system below 22
percent of gross wages in 25 years.
Poland: Polish Pension Funds May
Soon Invest More Abroad (March 10, 2004)
A recent ruling by the European Union's statistical
office (Eurostat) says that Poland 's pension fund
industry will soon be able to invest abroad. The ruling
points out that hybrid pension schemes are part of the
private sector and not part of the public finance
calculations. Until then, the Polish government
considered the pension fund as part of state finances,
allowing only limited foreign investments.
Italy: Italians Face Strike over
Pensions (March 10, 2004)
In Italy, the three largest trade unions called a
one-day general strike to fight against the impending
center-right government's plans to reform pensions. This
second mobilization is six months is also the third
full-scale strike since Sylvio Berlusconi became prime
minister in 2001. The government's reform aims to
increase the retirement age. The government argues it
will save annually 0.7 percent of the gross domestic
product on Italy's state pensions bill and would lower
the public debt. Government ministers believe it is a
duty for them to reform the pension system for future
generations of Italians.
United Kingdom: Pensions Cap 'Could
Affect 10,000' (March 9, 2004)
The National Audit Office (NAO) estimated that the
government's proposal £1.4m cap on pensions saving could
hit up to 10,000 people. It is twice what the government
had first estimated. The government will announce next
week whether the new plan will be introduced or not.
Canada: Pensions Still Leave
People Mystified (March 8, 2004)
A recent survey shows that Canadians don't understand
how their pension plans work and they worry employers
will break their pension promises. They also have doubts
about the liability of the Canada Pension Plan and
expect their homes to be the primary source of income
during their retirement years. However, employees may be
over-estimating how much pension earnings their real
estate will make. Government pension schemes, company
pension plans and personal savings are the three
necessary pillars to have a good income in old age.
Although the Canadian pension system is not broke,
reforms will give greater transparency to investors and
plan members, improve plan portability for younger
workers, and encourage employers to remain involved.
Iraq:
New Increases in the Salaries of State-Workers and
Pensioners in Iraq (March 7, 2004)
(Article in Arabic)
The financial assembly in the Iraqi Planning ministry
has launched a detailed research project to solve the
pension problem that Iraq faces today, which affects
two million people. The Division of Social Security
has established a way, according to the duration of
work and the number of family (dependent) members, to
calculate individual pensions. However, people
in the private sector have not been included in this
plan since they receive their salaries from the Social
Security administration.
United Kingdom: Women Fight for Right
to a Full State Pension (March 7, 2004)
Women's rights groups and charities for the elderly
joined forces to call on the government to act to end
the misery of many retired women. The Equal
Opportunities Commission (EOC) has handed the government
a six-point plan aimed at preventing poverty in old age
for future generations of women. This issue will be very
challenging for the Labor party in the upcoming general
election. Indeed, 75% of women aged 55 to 64 believe the
Labor pension's policy has failure. The British pension
systems, both state and private, do not meet women's
basic needs. Young women need to act now and throughout
their productive years to ensure this basic state
pension. However, many women wonder whether career
breaks or part-time work damaged their pensions. To
know, women need to ask for a state pension forecast.
China: The Reform in Retirement
Pensions Allows 688 Retirees in LiaoNing Province not
to Worry about their How to Earn a Living. (March 6,
2004)
(Article in Chinese)
ShenYang - "Since this March, I receive about RMB300 per
month for my retirement pension," ShuJuan Liu, 45 years
old, told the reporter. ShuJuan was laid off by ShenYang
Bicycle Factory. She now earns a living by polishing
shoes on the street.
United Kingdom: Late Change
Made to Pensions Bill (March 3, 2004)
The new British pension law now requires that employers
consult their employees over any changes to the pension
schemes. This new measure would require employers to
give notice before closing an occupational pension fund.
Jamaica: The Birth of the Old Age
Pensions Law (March 1, 2004)
In April 1945, Iris Collins introduced universal
coverage of the Jamaican Old Age Pension Law. A House of
Representatives Member from North West St. James, Ms.
Collins wanted the pension to extend to all seniors, not
just civil servants, believing that low-wage workers
should have a pension as well. Ms. Collins urged that
the retirement age lowered to 60 instead of 70 years.
She won her argument with census data that revealed that
many persons did not live until 70 years in Jamaica (in
1945) and would not benefit from a pension pegged at
that level.
New Zealand: Pensions Crisis Looms
(February 29, 2004)
The Periodic Report Group 2003 presented a report to
retirement commissioner Diana Crossan painting a very
negative picture for New Zealand's future. Taxes
increases, longer working lives and pensions shrinking
seem to be the necessary trend to pay for the future
retirement of younger people. The report suggests these
issues must be dealt with before the end of the decade.
People aged 20 to 40 will be the most affected by any of
those changes while those aged 40 to 55 will suffer from
limited consequences. Crossan believes New Zealanders
must change the way they save and support the government
in its difficult choices.
Australia: Squeeze on Pension
(February 26, 2004)
The Australian government wishes to cut by half the
current assets exemption to prevent wealthy people from
getting a state pension. The government hopes to
encourage Australians to save more for their old age.
This new measure is expected to reduce the pension costs
by more than $100 million a year. Treasurer Peter
Costello says that existing pensioners will not be
affected by the changes. However, the Combined
Pensioners and Superannuants Association argue that many
asset-rich retirees, barely above the asset line, could
end up being worse off than pensioners.
Australia: Government Hard Sell
on Ageing Strategy (February 26, 2004)
Treasurer Peter Costello and Prime Minister John
Howard are encouraging workers to stay in the workforce
even after the traditional retirement age. With this new
strategy, the government is trying to face the
challenges caused by a rapidly aging population. Unless
a solution is found to the increasing demand in health
care and pension benefits, the government predicts a
budget hole of $45 billion by 2042. COTA National
Seniors chief executive, David Deans, welcomed the
government's decision but warns not to exaggerate the
negative aspects of an aging population.
Japan: Pension Plan Still has Gaps in
Payments (February 25, 2004)
A recent report about the Japanese pension bill argues
that young people will greatly suffer from the measure.
It seems that the ratio between the premiums paid by
employees and what they will receive when they retire is
different from one age group to another. A worker
turning 20 in 2005 will receive 2.3 times the amount he
paid in during his working life. For retirees turning 70
in 2005 this ratio is 8.3 times.
France: Accord sur les "Seniors" dans le Commerce et
la Distribution (February 25, 2004)
(Article in French)
Distribution businesses, such as big supermarket chains,
organized in the Commerce and Distribution Federation
generally employ persons who entered the workforce in
their twenties. Nevertheless, the Federation responded
positively to the new French pension law. Its new
agreement with four trade unions will permit workers who
entered the labor force in their teens to retire before
60 years old, with the full benefit of their pensions.
France: Banques et Assurances à
la Conquête du Marché de la Retraite (February 23,
2004)
(Article in French)
The new French pension law effective this March will
give French workers the opportunity to contribute into a
private pension fund called « Popular Retirement Saving
Plan » (Plan d'épargne-retraite populaire). Since fall
2003, bankers and insurance companies have been
campaigning to inform their customers about this new
plan. About 17 million workers from the private sector
are eligible but only those with the highest incomes
will be able to afford it. The tax-deductible plan
requires a long many-year commitment with no withdrawals
for emergencies.
France: La Retraite Anticipée,
un Défi pour les Enterprises (February 23, 2004)
(Article in French)
In France, the new early retirement measure is
attracting a lot of employees. However, it seems that
many employers are not prepared for these departures but
they will not be able to refuse. This reform applies to
workers between 56 and 59 years old, who began working
between the ages of 14 and 16 and contributed between
160 and 168 trimesters into the pension fund. The law
wishes to reward very long work careers.
China: The "Black Hole" in Chinese Vital Statistics
(February 21, 2004)
(Article in Chinese)
It is common that some families continue to receive
pensions after a family member has died. It seems that
there is not yet a good system to link the names of the
dead to the ministry that distributes pensions. The
writer urges the government to step up its coordination
of vital statistics with pension checks.
Japan: Public Sector Proves More
Prudent in Japan (February 16, 2004)
In Japan, both public and private pension systems are
struggling to meet payment obligations. However, the
Government Pension Investment Fund (GPIF) has gained an
edge over private funds. The executive investment
officer of GPIF, Noboru Terada, has steered the
government pension system toward investing in hedge
funds and other speculative investments. While critics
say that exposing pensioners' money to the stock market
is too risky, Mr. Terada argues that that having a
disciplined risk management system and a highly
diversified portfolio could limit those risks. Mr.
Terada and GPIF, the world's largest pension fund, make
decisions that steer the course of world
investment.
South Korea: Pension Reform Faces Challenges (February
16, 2004)
Today, an increasing number of young Korean people are
unsure if they will receive any benefits when they
retire although they paid into the fund. A pay as you go
system, experts claim it will begin to run a deficit in
about thirty years. The government has proposed to raise
premium rates, cut benefits and increase retirement age
to 60 but these ideas don't please everyone. Business
wants lower premiums to permit, we believe, greater
investment and profit-taking. The unions worry that
benefit cuts will diminish living standards for retired
workers.
United Kingdom: Shambles Fails to
End Labor Pension Shame (February 15, 2004)
The new British pension proposal will not deal with the
nation's pension crisis according to Maria Scott from
the Observer. She argues the plan will only make future
pensioners save more because living on state pension
will become challenging. She says the proposal came as a
reaction to prevent future pensioners from losing their
benefits if their employers go bust. The government
proposed the creation of a compensation fund, very
similar to the US Pension Benefit Guaranty Corporation
(PBGC), now facing a multi-billion dollar deficit.
Mexico: Mexican Migrants Who
Worked in U.S. Push for Old Savings (February 15,
2004)
Mexican migrants, who worked in the US 50 years ago, saw
a portion of their income deducted for retirement
benefits that they could receive after returning to
Mexico. However, these "braceros" as they were called
received nothing and are demanding their dues from both
the US and the Mexican governments. The former workers
accentuated their claims after President Bush offered
similar savings accounts to new migrants.
Reaching out to 100 Million Poor?
(February 2004)
In the course of the 2004 Commission for Social
Development at the UN, Michael Cichon from the actuarial
branch of the International Labour Organization in
Geneva, encouraged serious consideration of universal
pensions. In particular, Cichon has worked on a variety
of paths toward non-contributory pensions in the world's
poorest countries to relieve abject poverty. In a
spirited presentation, this mathematician laid out how
governments in poor countries as well as those living in
rich countries could redistribute a small portion of
their wealth. With unassailable logic, Cichon spelled
out how it could work. Now he must face the greed of
those with wealth who do not want to share. But the
point is clear: Redistributing resources from the
developed countries to the developing world will help
combat old-age poverty and be beneficial to the whole
human family. Let's hope that humanity will win out.
France: La Réforme des Retraites d'EDF
Aiderait l'Etat à Ramener son Déficit sous les 3 % du
PIB (February 16, 2004)
(Article in French)
The French government made an agreement with its
European partners to reduce its deficit to under 3% of
the country's gross domestic product by 2005. To do
that, France could modify the status of the state
electrical company, EDF. Under a modified status, France
would stop providing special guarantees to EDF. For
example, the pension system could fall into the general
French pension system, instead of having a special
status. However, to make this possible, the Finance
Minister will have to negotiate with the unions.
China: China government will possibly allow investing
social protection money to abroad stock market
(February 13, 2004)
(Article in Chinese)
When huge amounts of money are input in Chinese market,
China government might allow investing social protection
money to abroad stock market.
United Kingdom: Pensions Protest
Takes to Streets (February 13, 2004)
The British pension bill proposes a new compensation
scheme to protect millions of workers in case their
company goes bankrupt. However, this new measure will
not apply retroactively, leaving tens of thousands of
workers with very little pension support for retirement.
Even with protest marches and petitions organized by
workers from steel company ASW and other bankrupt firms,
the British government has failed to address this issue
and will likely face more protest in the streets of
London.
Kenya: Civil Servants Get New
Pension Plan (February 13, 2004)
The Kenyan government announced that in July, civil
servants and teachers will pay into a contributory
pension scheme. The reform will make the system more
flexible, allowing civil servants to keep their schemes
when they change jobs.
United Kingdom: The Pensions Bill at a Glance
(February 12, 2004)
The British has made its long-awaited pension bill
public. The five major points in the bill include: a new
Pension Protection Fund (PPF), as well as new pension
regulators in charge of tackling fraud and poor
administration, and a mechanism to resolve disputes
between pension scheme trustees and members. Workers who
delay taking their state pension will receive a cash
reward, and the law will safeguard pensions when
employees' circumstances change.
Saving a World that Doesn't Save (February 11, 2004)
Household savings rates have been falling in most rich
countries over the past 20 years, despite governments'
efforts to address the problem of the rising dependency
ratio. Some economists blame years of low inflation for
low savings rates: high inflation serves as a visceral
reminder to save, even when old age seems like a distant
concern. According to Prof. Robert J. Shiller of Yale
University, if the combination of falling birthrates and
declining saving rates persists, more and more people
will retire poor.
United Kingdom: Campaigners Draw Up Pensioners'
Manifesto (February 10, 2004)
Driven by a sense that they are being "treated as
second-class citizens," groups of British pensioners are
writing a manifesto to make sure their "gray votes"
count. Pensioners will submit proposals regarding health
care, transport and mobility, neighborhood and
community, active citizenship and pensions. The final
manifesto will be presented in Blackpool between the
18th and 20th of May and will be sent to all
parliamentary candidates. The "gray vote" will reward
candidates who take the manifesto's recommendations
seriously.
Brazil: Support
Transfers between the Elderly and the Family in
Southeast and Northeast Brazil by Paulo Murad Saad
(December 1998).
Brazilian society is aging rapidly while social
inequalities widen and public resources stagnate,
leaving public institutions ill-equipped to meet the
needs of older persons. Yet as the need for family
support increases, urbanization and increasing numbers
of women in the workforce are changing the role of the
traditional extended family. Paulo Maurad Saad's Ph.D.
dissertation (University of Texas, Austin) analyzes
intergenerational transfers between elderly parents and
adult children in the cities of São Paulo and Fortaleza
to understand the effect of Brazil's shifting
socio-economic situation on older persons.
United Kingdom: Confidence in Pensions 'Growing'
(February 9, 2004)
A recent report by the Association of British Insurers
shows Britons have growing confidence in savings and
pensions. 17% of people surveyed believe the
government's policies for pension reform are positive,
compared to 15% in September. These figures show small
but significant changes in the public's attitude towards
saving. However, the majority of people still do not
trust the government to support them in
retirement.
United Kingdom: Company Pensions could be Compulsory
for Staff (February 4, 2004)
In a series of proposals encouraging the British to save
more for retirement, the Department for Work and
Pensions said new employees could be forced to join
company pension schemes. The insurance industry, trade
unions and employer groups welcomed this new measure,
which would reduce the number of workers relying solely
on the state pension. However, others criticized the
government's handling of the pension crisis, saying
ministers had put together a list of proposals rather
than concrete plans to boost pension savings.
United Kingdom: Children to get
pensions lessons (February 4, 2004)
To ease the pension crisis, the UK Ministry for
Education decided to give children in secondary schools
lessons on how to save. If approved, the lessons will be
compulsory for all children in the UK beginning in
autumn. The government wishes to encourage saving among
the British, especially since an estimated three million
people are failing to prepare adequately for retirement.
Trinidad and Tobago: Pension Pain for
Retired Judges (February 2, 2004)
Retired Supreme Court judges submitted a petition to the
President of Trinidad and Tobago asking him to raise
their monthly pension, as well as demanding more
benefits like health care and privileges like foreign
travel allowances. The judges also challenged a rule
forbidding them from practicing for 10 years after the
retirement age of 65, making them dependent on pension
benefits alone for basic needs. The retired judges hope
the petition will help them to be more financially
independent during their retirement years.
Equator: Jubilados reclaman aumento en sus pensiones
(January 30, 2004)
(Article in Spanish)
Retired persons in Guayaquil, Ecuador, protested against
an 800 million dollar cut to their national Social
Security. They argued for a 60 percent increase to
pensions threatening to take over the governmental
Palace in Quito if the government ignored their
petitions.
United Kingdom: Divorced Women
'Face Poverty at 65'(January 30, 2004)
The British Office for National Statistics revealed that
about 40% of divorced women of retirement age are poor
enough to qualify for state income support, compared to
1% of married women and 23% of divorced men in the same
age group. Older divorced women tend to have spent much
of their lives raising children, returning too late into
the work force to save enough money for retirement. To
make things worse, guaranteed state pension plans are
steadily decreasing in value while the government
encourages private pensions, putting women at a further
disadvantage.
Japan: Most People Distrust
Pension System (January 29, 2004)
In a recent Yomiuri Shimbun newspaper survey, 64 percent
of people who responded said they had no faith in the
Japanese national pension system. Many worry about the
level of pension benefits they will receive, if any at
all. This lack of confidence in the pension system
reflects dissatisfaction with the government's failure
to address inequalities in pension premiums and to
secure pension revenue sources.
South Korea: Employers Oppose
Raising Retirement Age (January 28, 2004)
The Korean government will raise the legal retirement
age from 57 to 60 beginning in 2008 to adjust to its
aging population, but the plan has met strong opposition
from the business sector. The Korean Employers
Federation calls the plan a "heavy financial burden,"
particularly during a time of high youth unemployment,
and suggests adopting a "wage-peak system" to help
reduce costs. Under the proposed system, companies would
guarantee to employ a worker until a certain age in
exchange for less pay during the latter years of work.
Labor organizations support the extension of the legal
retirement age, but worry employers could abuse a
wage-peak system to maximize profit.
United Kingdom: Pension Book Plans
Spark Campaign (January 26, 2004)
The British National Pensions Convention is organizing a
protest against the government's new plan to pay pension
benefits directly into bank accounts instead of pension
books. According to the NPC, this new system is
unsuitable for many older persons. Pensioners who forget
their PIN will not be able to collect their pensions
immediately when they need them. Pensioners opposing
this new plan are collecting signatures for a petition,
which will be presented to Pensions Secretary Andrew
Smith in May.
Canada: Canada Said to Face Labour,
Pension Crises by 2030 (January 26, 2004)
According to a report by workforce and financial
consultancy Watson Wyatt Worldwide, Canada will face a
severe labor shortage by the year 2030, putting an
enormous strain on the pension system. At the same time,
developing countries like China and India will
experience a large growth in their working population.
In addition to finding ways to make Canadians work
longer, Watson Wyatt also suggests that Canada take
advantage of the globalization of the labor market by
increasing immigration for workers. This would help
raise living standards in developing countries and help
solve the labor shortage in developed countries.
New Zealand: Homing in on
Retirement (January 24, 2004)
According to the Periodic Report Group, a government
advisory committee on retirement, future retirees in New
Zealand will be facing a different economic situation
from today's retirees. The group particularly warns that
future pensioners are less likely to own their own
homes, a factor that dramatically influences whether
retirement will be reasonably comfortable or a constant
struggle. If this trend continues, future retirees will
either have to accept lower living standards or save
enough to allow them to pay the rent. The report also
proposes that employers offer on-the-job savings
schemes, and advises that better education be available
on how to save.
United Kingdom : Pensions
confidence 'must be restored' ( January 21, 2004
)
The British National Consumer Council (NCC)
is worried that restoring people's confidence in
long-term saving will take more than just a stock market
recovery and the introduction of new-low cost savings
products. Rather, the government and the industry should
put the needs of ordinary people first by introducing
simpler and fairer savings incentives and better access
to financial advice. This mistrust of the financial
industry is a significant factor that inhibits people
under 35 from saving.
United Kingdom
: Blair's 'Sympathy' Over Pensions ( January 21, 2004
)
British unions are taking legal action against the
government for failing to implement a European Union
directive to safeguard pensions when firms go into
receivership. Prime Minister Tony Blair expressed his
"great sympathy" for the steelworkers who lost their
pensions, and he pledged to develop new regulations to
tackle fraud, bad governance and poor administration.
Mexico: Collecting
What's Long Past Due (January 19, 2004)
Between 1942 and 1964, the United States granted
temporary permits to 4.5 million Mexican laborers to
work in the fields, railroads, and docks. These
"braceros" received very little income for their
back-breaking work, and each month ten percent of their
wages was deducted for "retirement savings." However,
that money disappeared, leaving elderly former braceros
with nothing. A lawsuit filed in 2001 aims to recover
their pensions, an amount estimated at $500 million, but
money is not the main concern of these old Mexicans:
many want to be recognized for the hard work and
valuable contributions they made for this country.
Italy: Italian Union Hints at Action
on Pension Reform (January 13, 2004)
The Italian government wants to continue its dialogue
with trade unions on how to reform the state pension
system, but the CGIL - the largest and most militant
union - says it is running out of patience and may
consider action. Prime Minister Bersculoni wants workers
to accept a government proposal raising full-pension
contribution years from 35 to 40, but unions insist the
reform does not make sense. Italy's pension system
accounts for almost 14 per cent of Italy's annual gross
domestic product.
United Kingdom: British Airways Cabin
Staff Fight to Keep Jobs Beyond 55 (January 13, 2004)
Former British Airways pilots and cabin crew claim that
the mandatory retirement age of 55 is unlawful and
discriminatory, and have mounted a legal challenge
against the company. Age discrimination is not illegal
in the UK, but the law will change in 2006 with a
European Union directive.
United Kingdom: Pensioners
missing out on 'complicated' credit (January 12, 2004)
Almost half of British seniors entitled to the
government's pension credit do not receive it. More
worrying, the rate of new applications for the credit is
slowing down. Many elderly people are missing out on the
much-needed extra cash, and some Liberal policy-makers
wonder if the pension credit is just too "eye-wateringly
complex."
United
Kingdom: Treasure our golden oldies (January 11, 2004)
"The fact that people living longer, healthier and more
active lives is portrayed as a crisis" reveals
deep-seated prejudices against older people in society,
says House of Lords' economic affairs committee chairman
Maurice Peston. The world has incorporated rising
percentages of older people for decades by planning well
and recognizing their strengths and contributions. Lord
Peston argues that citizens should embrace longer
life-expectancy by planning to work longer, and
employers must stop operating as if "on the assumption
that nobody will get old." He also calls for a stop to
age discrimination in the workforce and public
offices.
United Kingdom: Warning
over 'discriminatory' pensions (January 9, 2004)
A report from the UK House of Lords' economic
affairs committee reveals that the state's pension
system discriminates against women and ethnic
minorities, groups already more vulnerable to poverty in
old age. According to an all-party group of Peers, the
British government should replace the basic state
pension with a non means-tested citizenship pension. The
pension benefits would depend on the number of years of
residence, rather than on national insurance
contribution. The Lords also recommended fighting
against age discrimination in the workforce by
prohibiting employers from laying-off workers because of
age rather than performance.
Germany:
In Germany, Shifting the Cost of the Pension to the
Worker (January 9, 2004)
In classic economic theory, analysts see pensions as
delayed wages, used to finance old age, held in trust by
employers. Now, conservatives want to eliminate or
reduce those wages and blame workers for failing to
"save" out of their pay envelopes for retirement. Why?
They fear retired workers will live too long and require
their delayed wages. This step backwards in Germany
hurts workers but enhances corporate profits and
presumably the financial rewards of corporate bosses and
their major stockholders.
Using the "personal responsibility" theme of the right,
some German employers have cut off pension plans to new
workers and revised the method of calculating pensions.
What, we may ask, is the employers' responsibility to
honor the wage agreement made with workers whose efforts
created the products and wealth that the corporation
controls?
In Germany, some in government want to change
drastically the public, pay as you go, social insurance
program as well. If successful, the German workers, once
the world leader of a "good old age," will find
themselves in soup kitchen lines throughout their old
age. . .and the factory managers will be basking in the
Majorca sun.
Commerzbank scraps pension
scheme (January 6, 2004)
Germany's Commerzbank will stop paying into pension
schemes for as many as 24,000 of its employees,
reportedly because of tough economic conditions.
Workers' unions call the new measure "scandalous."
According to the union, the recent rebound in stock
markets and signs of global growth mean the company is
emerging from a crisis rather than entering it.
Après une bataille juridique,
la nouvelle vie des enseignants pionniers de la
retraite à 50 ans (January 5, 2004)
(Article in French)
In France, about 100 male teachers won a lawsuit
allowing them to retire before the age of 60, based on
European law guaranteeing gender equality. Early
retirement is usually granted only to women who have
worked at least fifteen years, had at least three
children, and took at least nine years off to raise
them. The increased demand for earlier retirement may be
a result of teachers' high burn-out rates and widespread
anxiety that the pension system after 2004 reforms will
be less generous. One of the teachers argues, « For the
post-war generation, retirement is not the right to
rest, but the right to enjoy life. »
Report: MENA: Pensions in the
Middle East and North Africa Time for Change (2004)
Pension systems in the Middle East and North Africa are
facing important structural problems, which impose
distortions on the economy and, contrary to general
perceptions, can be a source of adverse distributional
transfers. General problems with pension systems in the
region are; the pension promise is large and
unaffordable; schemes are financially unsustainable;
badly designed rules introduce unnecessary distortions
in labor supply and savings decisions; the schemes are
fragmented and administration is weak and costly;
coverage rates are modest, with important gaps among the
self-employed and people living in rural areas; and
governance structures are not designed to ensure that
the funds are managed in the best interests of plan
members. Success of any policy initiative aiming to
reform the national pension program will depend heavily
on administrative capacity and planning.
