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Pension
Issues around the World
Archive January-December
2005
Articles
in Arabic
| Chinese
| French
| Russian
|
Spanish
Also see our section on Social
Pensions and US Pension
Issues
Africa
South
Africa: Bullets Fly at Pension Pay Point (December 14,
2005)
On the morning of December 14th, six gunmen started
shooting as soon as security officers handed over the
pension money to the All Pay officers. Two robbers
grabbed several trunks of checks before fleeing in their
vehicles. During the shooting, a 61-year old woman was
injured. Officers worry about the risk that pensioners
face as they come to claim their monthly pension checks.
One robber was caught and arrested while the others fled
on foot after their vehicles came to a stop. A manhunt
for these men is underway. All pensioners unable to
receive their checks due to the incident will receive
replacement checks.
Mali: Social Security Budget Increases With the Number
of Pensioners (December 2, 2005)
(Article in French)
The budget for Social
Security in Mali is increasing at a 2% rate in 2006 to
match the increasing number of pensioners. The
directors of the Social Security Fund have also
decided to continue improving the pension system by
converting to computerization.
Africa: Be Wary of the
Generation Trap (November 21, 2005)
Middle aged adults in their 50’s are often referred to
as the “sandwich generation” because they are stuck
between their elderly parents and their not yet fully
dependent children. It is difficult for them emotionally
and financially. While adults have made efforts for
their own retirement, many find that their pension is
not sufficient. But recent research shows that this
“investment-repayment cycle” is well worth it.
Financially supporting your children through their
educational process has proved to be more advantageous
than any type of savings or investment. Caring for aged
parents is also admirable also. One just needs to know
where to set the boundaries for the children and aged
parents so as not to jeopardize one’s own
retirement.
South Africa: Special
Pensions Bill Passed (November 11, 2005)
The South African National Assembly recently approved a
law that expands pension and survivor benefits to those
who worked in previously restricted political
organizations. The Special Pensions Amendment Bill
builds upon the original legislation passed in 1996 that
provided lump sum benefits to individuals and their
dependents who were previously prohibited from
participating in a traditional pension scheme due to
working full time in a banned political organization.
The Amendment Bill aims to create further benefit equity
between those who had the ability to pay into pensions
and those who were barred from doing so because of their
previously controversial work situation.
Uganda: NIC Furious Over Shs14b Makerere Pension
Scheme (November 8, 2005)
Current and future retirees from a Ugandan university
stand to lose their pension and life insurance benefits.
Makerere University officials say they will terminate
the pension and life insurance benefits because of
controversy surrounding the plans and a possible
inability to pay 10% interest on employee-paid
premiums.
Congo-Brazzaville: French
Retirees Ignored by the Congo State (November 5, 2005)
(Article in French)
A group of ten French retirees who worked in Congo for
several years and paid into the Congo’s national pension
fund have never received any pension payment from the
government. The group is going to start a judicial
procedure to claim about 1,579 thousand euros in unpaid
pensions.
The
Republic of the Congo: Every Fifth Pensioner in the
Republic of Congo is a Cheater (October 26, 2005)
(Article in Russian)
Zhilber Ondongo, the minister of labor in the Republic
of Congo, reports that about 11 thousand people
illegally received pensions in two pension funds
simultaneously. After the national census, officials
spotted this situation. Upon the demands of
International Monetary Fund and other donors, the local
government is trying to take the control of the central
budget spending in the country.
Botswana: The Breakdown of Social
Support Systems (October 19, 2005)
The HIV/AIDS epidemic has required many grandparents to
take over the task of raising children orphaned by the
disease. A recent study by UNICEF shows that 34% of
children orphaned by HIV/AIDS in Botswana live with
grandparents, even when one parent is alive. It is
common for grandparents to use their limited pension
resources to support several family members. Botswana
experts believe it is necessary to increase access to
financial and social support to grandparents throughout
the region who face the mounting challenges of raising
children today.
Ethiopia: Pensions of
Former State Employees Doubled, Move Widely Welcomed
(October 3, 2005)
The government of Ethiopia has decided to double the
state pension so that former government employees can
meet the rising cost of living. International Aid
Organization says that this new law only benefits those
people who have been working all their lives and have
money. What about the elderly that live in the rural
areas who have not worked, have no money, are sick, and
have the responsibility to take care of grandchildren?
The head of HelpAge International Peter Bofin proposed
giving cash to the elderly poor instead of food, so that
they might invest in something (like an ox) to work,
make a living and hence find ways to feed the
grandchildren that they care for.
Angola: African Investment Bank
Unveils Workers Pension Fund (August 11, 2005)
Employees of the African Investment Bank will now
have a defined benefit pension package provided for them
by their employers. The new pension plan will include
death benefits, early retirement benefits and 90 percent
coverage of the retiree’s work salary. Pensions
plans such as this one, protect workers and their
families from poverty in retirement and gives retirees
the means to a decent living in retirement.
South
Africa: Long Wait for Pension Funds to Get Their
Surplus Payouts in Order (August 11, 2005)
There is currently 80 billion rands in surplus
money in South Africa
. The money comes from forgotten bank accounts and
unclaimed insurance policies, among other places. If
the beneficiaries of the money are not found, the
money will eventually go to the state. Companies
seeking to avoid the huge financial burden of dividing
their surplus are attempting to claim that they do not
fall under the Pension Fund Act. Are companies and the
government trying hard enough to find the
beneficiaries, or are they waiting for the money to
fall into their laps?
Ghana: Don’t Use Pension Benefits on
Lotto and Alcohol (August 3, 2005)
Educator Stephen Opuni, headteacher of Kwanwoma
Presbyterian
Primary School
and chairman of the
Bosomtwe-Atwima-Kwanwoma Association of Heads of Basic
Schools, has argued that pensioners should not invest
their pension in alcohol and the lottery, which has
become a common practice that leads to old-age poverty.
Instead he suggests that pensioners invest in their
children’s education and other things that produce gains
high in intrinsic value. A head teacher in the
Bosomtwe-Atwima-Kwanwoma District of Ashanti, for
example, can receive a 1 million cedi pension benefit
package, the equivalent to 109 American dollars, upon
retirement.
Nigeria:
We’re Being Starved to Death, Pensioners Cry Out
(July 16, 2005)
Nigerian pensioners are dying of hunger because they
are not receiving their monthly pensions. There have
even been stories of the elderly risking their health
while waiting on lines to verify documents to receive
their pensions – pensions that sometimes never come!
Senior citizens often linger around pension offices,
carrying the “burden of poverty with pains and
agonies.” Whatever happened to the motto “Rest is
Sweet After Labor”?
Tanzania: Bank Seeking
Reforms in Tanzania
Pension Funds (July 4, 2005)
Tanzanian pension funds may soon undergo
changes. Pension reforms seek to stop gambling with
workers’ money on risky and specialized investments.
There have also been accusations that Tanzania
’s pension agencies have loaned workers' pension funds
to well-heeled businessmen and political parties.
Compounding the problem is the fact that there are no
regulatory agencies to oversee Tanzania
’s pensions, leading to disorganization, confusion,
and deception. Tanzanian citizens need and deserve a
pension plan that they can trust, and pension reform
can help.
South Africa: Apla, MK Veterans
Set to Get Special Pensions (July 4, 2005)
The Special Pension Act will be amended to ensure that
it covers all veterans and that the age limit for
qualification will be lowered. Currently, only
liberation struggle veterans who were over 35 in 1996
are eligible to receive the grant in terms of the
Special Pension Act of 1996. But some of those who
were under the age of 35, have grown older now and
should qualify to receive the grant, said the Veterans
Foundation chairman Papi Kubu. Most veterans were
unskilled and unemployed at that time and having a
source of income would help their families
considerably. "It was also unfair to have some
veterans receiving the money while some were not,"
stressed the chairman of the Veterans Foundation.
Nigeria: Increase Our
Pension By 142 Percent (June 30, 2005)
Hundreds of pensioners protested at the secretariat
in Ibadan
to claim pension payments
promised to them by the federal government. The
federal government, however, has pledged pensioners
money that has not been backed by actual funds.
Despite the lack of funds, the government has
pledged to meet the protestors' demands in due time. The
Ministry of Finance is currently working out the
details.
Africa: AU Eyes Pension Funds for
Infrastructure Development (June 21, 2005)
The Chairman of the African Union has
called on African leaders to support a plan to use
“dormant” pension funds for
Africa ’s infrastructural development. He
argues that Africa
needs to raise funds from various sources to help build
the Pan African infrastructural fund. While the
intentions for this plan are noble, the means are not.
Taking supposedly “dormant” pensions funds could put
elder people across the African continent in jeopardy.
What if the investments are lost? What if governments
change? What are the guarantees that the governments
will produce the interest and principal for the
retirement monies when African seniors need those
pension funds? Is it appropriate to gamble on the future
of seniors’ income—or leave them destitute— in the name
of rebuilding Africa
? Rebuilding for whom? On the backs of whom?
East
Africa, Nairobi: Workers' Savings Not Secure, Yet
(June 15, 2005)
Who will protect East African pensioners and
retirees? According to the author, pension corruption
and abuse characterizes
Uganda , Tanzania and Kenya
. The "heads” in the three countries treat the state-run
pension funds like their personal bank. In Uganda , the Office of
the Inspector of Government, the equivalent of Kenya
’s Anti-Corruption Commission has launched an
investigation into the circumstances under which the
Vice-President, acquired a house belonging to the
National Social Security Fund (NSSF). In Tanzania
, the Parastatal Pensions Fund
(PPF) has been made to operate more or less as a venture
capital company. Incidentally, all the three East
African countries have a National Social Security Fund
(NSSF). But Uganda
and Tanzania
would still appear to be at the stage Kenya
was during the Nyayo era. In that period, government
leaders manipulated the NSSF to buy irregularly acquired
public land from politically well-connected individuals
at inflated prices.
Zambia: Retirees and Retrenches Will be Paid, a
Relief to Many (June 10, 2005)
The time has come for Government
and the Pensions Insurance Authority (PIA) to review the
entire social security scheme in Zambia
. The announcement that retirees and retrenched persons
will be paid before the end of the year relieves
elderly, some of whom have waited for years to get hard
earned pensions. Hopefully the payment of retirees and
retrenched will bring to an end the long years of misery
that now mark life after leaving employment. The Zambian
pensioners hope that the decision to pay off outstanding
dues before the end of the year will begin to end the
suffering for the workers who have served the country.
Being retired is synonymous with isolation and
destitution as it takes years before terminal benefits
are paid.
Nigeria: The Pension Reform Act 2004:
The Need for Amendment (January 21, 2005)
Pension and gratuity payments to pensioners in Nigeria, especially those in the public
service, has become a contentious issue to the
government and its workforce. The author says that the
Pension Reform Act 2004 did not involve workers' input
and gives far too much power to the government.
Presently, less than 5% of the workers know even a few
important details of this Act that was claimed to
respond to all Nigerian citizens' needs. The author
exposes many unfair sections of the new law.
Ghana: Pension Goes Up
(January 6, 2005)
The Social Security and National Insurance Trust
(SSNIT) has increased pension payments: "The minimum
monthly pension for new pensioners joining the pension
roll from January 2005 is now ¢125,000," said the Public
Affairs Director of SSNIT, Mr Kweku Osei-Bimpong. But
some pensioners are not satisfied, saying that it's
necessary to break the monopoly of the SSNIT: they want
a "realistic pension." Apparently Ghanaian employers
regularly under-report salaries to the government to
avoid paying higher pensions. Not a good situation!
Return to Top of Page
Americas & Caribbean
Trinidad &
Tobago: Illiterate Granny Must Repay $10,000
(December 19, 2005)
A 70 year old women in
Trinidad and Tobago started receiving two pension
checks a month last February. The old woman, who can
neither read nor write, thought this double check
came because the government had increased the
pension. In December the Social Service Division
urged her to return the $ 10,000. Unable to pay the
entire sum, she offered to re-pay little by little
each month. Interestingly, the investigating
officers wanted her to repay the funds in cash to
them. Now
that the Social Service Division is alerted, it says
it will take her $1,000 per month pension and leave
her with only $50 to survive. Surely
there is a better way.
Chile: Chile’s Private Pension
Plan System Fails to Protect Elderly (November 30,
2005)
The presidential candidates for the upcoming election
agree that the privatization program adopted 25 years
ago has produced average payments to retirees that are
far below the amount necessary to financially support
them. In short, it failed. They also question why the
average pension has not increased while the average
contributions have increased. The candidates want to
examine how much profit the fund managers are making.
A former deputy of the Christian Democratic (DC)
Party, Sergio Férnandez Aguayo states, “the changes to
the current system that the government is pretending
to introduce will not benefit the interest of Chilean
workers… it would seem that the system is trying to
fortify private economic concentration instead of
creating dynamic social benefits.”
Trinidad and Tobago: Pension Fraud Unlikely at
Banks, Says Howai (November 30, 2005)
Pension fraud allegations run rampant in Trinidad and
Tobago. Government officials were shocked to learn
that people were cashing pension checks who were not
the true recipients of the benefit. The president of
the Trinidad and Tobago Banker’s Association says he
will encourage a full investigation of the fraud
allegations
Bermuda: Majority of
Seniors Living in Poverty (November 29, 2005)
The number of people over the age of 65 is rapidly
increasing. The Department of Statistics found that
majority of elderly live on $36,000 a year which would
classify them in the poor category. About one third of
them rely on government pension which is their main
source of income. The main concern is that although
most senior citizen’s medical bills are covered by
health insurance the working population will still be
affected by the increased medical expenses as a result
of longer life expectancies. The Department states
that the island is in need of more “purpose-built
facilities with trained staff to care for the aged.”
The Bahamas: Can Pension
Reform Save Our Retirement Savings? (November 8,
2005)
Officials in The Bahamas debate pension reform by
weighing the costs of defined benefit and defined
contribution pension plans. Experts recognize the
positive economic impact that strong pension earnings
have on older persons during their retirement years as
well as the residual effect on increased consumer
spending.
El Salvador: World
Bank Approves $21 Million for Social Protection
(October 27, 2005)
The World Bank recently approved a $21 million loan to
El Salvador to implement a social protection program
to reduce poverty and increase the standard of living
for low- income families. The Salvadorian plan, known
as Red Solidaria, is aimed at increasing productivity
and income for many who have been left behind. The
program sets out to help many families afford health
care and educational opportunities as well as enhance
the existing social service structure. The World Bank
and the Salvadorian government are confidant that a
full scale social protection plan will help reduce
poverty, especially in rural areas. Seniors in El
Salvador stand to benefit substantially from the Red
Solidaria program.
Canada: Getting Old in Canada,
Growing Inequalities. (October 24, 2005)
(Article in French)
Twenty-five percent of the retired population own more
than 84% of the private pension funds. On the other
hand, 3 families out of 10 have no private pension.
The unequal income distribution of income will grow in
the next few years. Indeed, in the next decade, the
contributory employer based pensions will develop more
than ever in the past. It also means that inequalities
among workers and as a matter of fact, among retired
people will increase. The gap between the income of
men and women will widen too, impacting the retirement
income of men and women. Where did social protection
in old age go?
Mexico: Government Grants Money to
Thousands of Elderly Persons to Pay for Food
(October 7, 2005)
(Article in Spanish)
More than three thousand elderly adults in Chihuahua,
Mexico, will soon receive government monetary benefits
that they may use to pay for food, clothing, and other
necessities. Of the approximately 3,500 elderly
residents of Chihuahua set to receive these benefits,
over 90% of them already possess the official card
that they need to access the money to which the State
Government has entitled them. To qualify for the
benefits, a person must be at least 70 years old and
present a birth certificate and some form of photo
identification. This monetary benefits program
reflects the efforts of Chihuahua’s government to
provide the city’s elderly with the money they need to
lead a comfortable and healthy lifestyle, which,
without some form of government support, becomes
elusive once age has forced them out of the work
force.
Mexico: The World Bank Reports a
38% Poverty Rate Among Mexico’s
Elderly (September 15, 2005)
(Article in Spanish)
According to the World Bank, 38 % of Mexico
’s elderly population lives below the poverty rate,
which is a greater percentage than that of other
sections of the population. This rate, higher than that
of countries with statistically lower per capita
incomes, is greater than the rate reported in Brazil , Chile , and Colombia
. Although more than 20 % of the urban
population aged 65 and over receives pension benefits,
only seven percent of elderly adults in urban areas, and
less than one percent in rural areas, have access to
pension benefits. Recently the World Bank has suggested
a social pension in countries where the poverty among
elderly is so great that there is no other recourse.
Already
Mexico City has a social
pension for older persons.
Antigua: Pensioners Call for MBS
List to be Extended (September 8, 2005)
Antigua and
Barbuda Pensioners Association have asked the Medical
Benefits Scheme to expand the list of illnesses that it
covers. Because older people are subject to many
illnesses that lie outside the list, they cannot afford
medications and need MBS assistance for these additional
medical conditions. Not only do the pensioners ask for
the extension of the list, but also they ask MBS to
carry a greater variety of medications for a wider range
of illnesses at various pharmacy locations so that the
drugs are more easily accessible. An ideal program would
cover the costs of the medications for the sick and be
available at local pharmacies. These pharmacies could
then bill MBS monthly for reimbursement.
Latin America: Social Security
in Latin America Generates Exclusion (September 7,
2005)
(Article in Spanish)
Jorge Bernedo, consultant to the United Nations
Program for Development, claims that vast sections of
the population in Argentina, Brazil, Colombia, Chile,
Ecuador and Uruguay suffer from a lack of healthcare
and social security benefits resulting from corruption
and lack of transparency in the governments of these
countries. This deprivation of basic health and
economic support services is especially intense in the
Andean countries marred by severe poverty, demographic
problems, and weak, unstable economies. Social
security exclusion affects not only Latin America ’s poor, but
also, and especially, its elderly.
Report: Latin America:
Intergenerational Transfers and Social Protection
in Latin America (August-September 2005)
This paper from the UN Experts Group Meeting on
Social and Economic Implications of Changing
Population Age Structures scrutinizes the social and
economic impacts of intergenerational transfers in
Latin America. It also gives readers tips to
understand how crucial these transfers have become
in Latin America in family-based social protection.
Some Latin American governments have not given
attention to these transfers while they tended to
economic crises. However, intergenerational
transfers, both public and private, are key to
avoiding future crises.
Ecuador: Ecuador Palacio Partially Vetoes Pension
Bill (July 21, 2005)
The President of Ecuador
has partially vetoed a social security plan that
would give workers back the money they paid into the
pension reserve fund. The plan called for the
immediate return of the funds within 90 days, but
the president wants the return to be more gradual.
Congress has one month to decide whether or not they
want to override the President’s veto and put the
social security bill into law. Will there be a
pension program for Equadorians after these
withdrawals?
Ecuador:
Ecuador Congress Sends Social Security Bill to
President (July 11, 2005)
This controversial Social Security bill demands
the withdrawal of $734 million in savings from the
Ecuadorean Institute for Social Security, or IESS, to
be paid to Ecuadorean workers. Many Ecuadoreans who
have paid into the IESS retirement fund are insisting
on payment now. Some Ecuadorean Congressmen agree with
the workers but the President is expected to veto the
bill.
Mexico: Urgent Pension Reforms (July
11, 2005)
(Article in Spanish)
The System of Pensions in Durango , Mexico
, recently announced its plan for an immediate annual
increase of 60 million pesos (5.5 million USD). Under
the direction of Jose Torres, the pensionary system of
the state would collect 180 million pesos (around 17
million USD) from income figures, acquiring 17.5% of
pension payrolls, which would benefit expected retirees.
Created in the 1960s, the System of Pensions was
designed to give state officials and workers
economic certainty after they decide to leave the
workforce. However, due to changing times and longer
life expectancies, the System of Pensions has been
negatively affected such that retirees receive pensions
for twice the number of years than those in the 1960s.
Unfortunately, as the number of years has doubled, there
has been little or no financial modifications made in
order to support that large increase until now.
Mexico: Help for the Aging (June
24, 2005)
(Article in Spanish)
In Tijuana,
Mexico, the majority of elders are looking forward to
the new pension plan proposed by their local
government. As part of the new plan, the Regulation of
the Rights of Older Persons promises many beneficial
improvements such as monthly financial assistance,
medical services, economic protection and the right to
suitable public transportation.
Chile:
Tierney Again Misleadingly Touted Chilean Retirement
System (June 15, 2005)
Like many Republicans who want to convince people
that privatization is a good idea, New York times
columnist John Tierney offered the Chilean system as a
work-promoting alternative. Once again, Chile
is used as a good example of the ownership society. But
let’s take a look of what is really happening there:
many Chileans continue working into their 60s because
they are too poor to retire. Dictator Pinochet’s plan to
introduce private accounts into the pension system never
enabled Chileans to “accumulate enough money in the
account to finance a pension that pays at least half
their salary.”
Colombia: Colombian Senate
Prepares Final Vote on Bill Curbing Pensions (June
14, 2005)
With the International Monetary Fund
breathing down their necks, Colombia's legislators will
likely approve changes to the country's social security
law, aiming to reduce the government's budget deficit by
more than 990 billion pesos a year ($423 million) for
the next 50 years. The formula includes a
“privatization” feature. The proposed changes in the
social security system are part of an eighteen-month,
$613 million loan agreement reached with the
International Monetary Fund in April. IMF, based in Washington
DC , said in its annual economic
assessment of the South American country in May, that
controlling social security expenditures is key to Colombia
's gaining control of its budget.
The government expects to cover about 4 trillion pesos
of the 6 trillion pesos owed to pensioners this year
because the social security system lacks adequate
funding. Furthermore, Colombians can choose to accept
fixed payments from the social security system or have
their retirement funds managed by one of six private
pension companies. The new law will affect only social
security's guaranteed payments.
Canada: Elderly Get the Boot? (June
2, 2005)
Aging Chinese pensioners living in a social
housing project in Chinatown
face eviction. The majority of tenants are seniors in
their 70s, 80s and 90s. On May 6, the Court of Quebec
upheld a 2002 Régie du Logement Decision allowing their
landlord, the Montreal Chinese Community United
Centre/Housing Corporation, to cancel the leases of 16
tenants if they don't settle unpaid rent by June 30.
Tenants say at least 30 residents involved in the
dispute have received such eviction notices. Initially,
all of the poorest residents paid 25 per cent of their
household incomes in rent but in 2000, the housing
project's board of directors raised rents for low-income
residents to 35 per cent of their household, which is
far more than pensioners can afford. The elderly tenants
only remaining hope focuses on replacing the project’s
board removed, so the dispute and the court battle can
end.
Panama: Costly Pension Reforms
(June 10, 2005)
Panamanian President Martin Torrijos acknowledges
that the Social Security Fund reforms that his
government has proposed will unfortunately cause huge
financial strain. Some reforms include increasing the
retirement ages for men and women as well as requiring a
higher contribution to social security in order for
workers to qualify for a pension. The President claims
that these new laws are the only way to pull the Social
Security Fund out of its enormous deficit of almost $4.5
billion.
Chile:
Chile Con Economy? (May 9, 2005)
This Latin American country privatized pensions
24 years ago. Bernard Wasow examines a late 2004 World
Bank publication that now critiques the Chilean
privatization model that the Bank forced on most of Latin America in the 1990’s. US
citizens can learn a lot from Chileans about how private
accounts neither helped government finances nor did they
give adequate financial support to older persons.
Mexico: A Slow Flow for Mexico
Pension Plan (April 21, 2005)
Mexico's
attempt to get pension fund managers to invest in the
stock market is getting off to a sluggish start.
Chile:
Chile's Retirees Find Shortfall in Private Plan
(January 27, 2005)
"If people really had freedom
of choice, 90 percent of them would opt to go back to
the old system," said a Chilean government official who
specializes in pension issues. This words sound very
strange when we know that Bush said the "United States
take some lessons from Chile
, particularly when it comes to how to run our pension
plans. "When dictator Augusto Pinochet first advertised
the Chilean system of pension, there were the same
promises as now in United States: private investments
will be very good for the economy, generating higher
returns, and generating pension benefits larger than
Social Security's ones. But the Chilean example shows
that privatization is a bad idea. The system is not yet
self-sustaining, the money spent on pensions represents
more than a quarter of the national budget and many
elderly live in wrenching poverty. And this is good for
US citizens?
Mexico's Pension Funds Eager for
Foreign Equities (January 17, 2005)
Mexico's second-largest pension fund plans to buy
more in stocks in the United States and Europe than in its
own country, as new regulations allow the company to start
investing in equities. Who will it benefit? The old of Mexico
? Or the large pockets of the speculators?
Return to Top of Page
Asia Pacific
China: New Pension Policy Will Not Increase
Individual Contribution (December 15, 2005)
On Dec. 14, the National People’s Congress held a news
conference on the latest changes in pension policy.
Individual contributions will decrease from 11% of the
wage rate to 8%, effective Jan. 1, 2006. Officials
from Ministry of Labor and Social Security also gave
an authoritative interpretation on the policy changes.
They confirmed that the new policy will not increase
individual contributions.
South Korea: Government and Economists Call for
Increase in Pension Contribution and Cut in
Benefits to Avert Crisis (December 9, 2005)
The South Korean government has delayed pension reform
due to a wide range of different opinions among
politicians. The government wants to increase pension
contributions to the nation’s pension fund and to cut
current benefits. The Korean Development Institute
warns that there will be nothing left in the pension
fund in 30 years if no changes are made. A Korean
Association of Retired People survey said that 7 out
of 10 pensioners feel that the current national
pension is insufficient and does not assure a secure
retirement. Clearly, Korean elders mistrust this
“reform” process.
China: Chinese Feel
Insecure About Pensions (December 7, 2005)
According to a survey conducted by the China Youth Daily
and Soho.com, many Chinese elderly that are living
solely on pensions feel insecure about their future.
They are worried that their living standards will
gradually deteriorate and believe that getting
additional money from the government is the solution to
their worries. The World Bank has suggested that China
raise its retirement age as other countries are doing.
China also faces a difficult challenge of supporting the
peasant agricultural workers who currently have no
pension program.
Taiwan: Teachers, Veterans
Protest Pension Cuts (December 2, 2005)
The National Retirement Teacher Alliance and the
National Teachers’ Association & Veteran Association
are accusing President Chen Shui-bian of making changes
to the pension system for an ulterior motive. They
believe that the President demonized civil servants,
teachers, and military personnel in order to boost his
ratings for the upcoming election. In response, they
plan a large-scale protest scheduled for December 10,
International Human Rights Day. They feel that the
President is splitting the people of Taiwan to increase
his votes. In some cases, retired civil servants,
teachers and military personnel are receiving higher
pension payments than current worker’s salaries.
Protesters argue that this reform should have had a
proper public hearing with the teachers, civil servants,
and military personnel in advance. They feel they
deserve to know the facts since the issue affects them
directly. The Taiwan government bans unionization of
public employees.
China:
Social Survey on Pension Reform: 50.8% are concerned
about life after retirement (December 1, 2005)
(Article in Chinese)
Starting from Jan. 1, 2006, individuals will deposit
8% instead of 11% of their wage into their retirement
accounts. Employers will no longer make direct
deposit, but cede their share of the retirement
contribution to the relevant oversight government
agency. Experts point out this rate adjustment allows
elderly to live relatively comfortably on current, but
future elderly will get much lower retirement
benefits. The latest social survey in Beijing,
Shanghai and Guangzhou suggests about 50.8% people are
concerned about financial viability in their
retirement life.
South Korea: Urgent Pension Reform
(November 29, 2005)
On Tuesday, a parliamentary panel pledged to try to find
a compromised pension reform plan by February. If they
do not decide upon a solution, the pension reform will
be delayed another three years causing a heavier burden
on current the adult children of old persons. Korea’s
low-premium and high payout schemes are expected to run
out in the year 2040. The problem, according to the
article, is that both the ruling and oppositional
parties are only looking at their short-term political
gains. This irresponsibility is what is interfering with
the parties achieving their ultimate goal of securing
fiscal stability, spreading benefits as wide as possible
and ensuring substantive benefits according to
contributions.
China: 140 Million Elderly Need
Social Help (November 22, 2005)
(Article in French)
“About” 140 million Chinese elderly need social help,
said Mr. Li Xueju, minister for civil affairs in a
conference Sunday in Beijing. He also said that the
government itself was not able to provide such help
and underlined the importance of the role of charities
and social organizations. He urged local institutions to
recognize such groups in order to encourage a real
collaboration.
China: Pension System Covers
Only 15% of Population (November 9, 2005)
Xiang Huaicheng, the chairman of China’s National
Council for Social Security Fund is concerned that only
12 % of society is covered by a pension system. The
International Labor Organization considers 20% to be the
minimum standard. China is considering adjustments to
offer pension schemes to people living in rural areas
that have lost their farmland to industrial development
and construction projects as well as migrant workers in
rural areas.
India: New, Improved
Pension Bill Set for House Debut (November 7,
2005)
India is poised to pass a pension reform bill after
being stalled for several weeks. The Pension Fund
Regulatory Development Authority (PFRDA) calls for a
change from a defined benefit system to a defined
contribution plan. Defined benefits provide set payments
per month throughout retirement while a defined
contribution system would result in varying payment
amounts depending on how much one contributes to the
plan. India is one of many countries throughout the
world confronted by the debate over pension structures
as it becomes more difficult to fund pension obligations
for a growing retirement population.
Fiji: Work Starts on Pension
Bill (November 7, 2005)
The Fiji government has proposed a bill to deregulate
the pension fund industry. The Superannuation
Supervision Bill would establish companies that would be
able to set up and manage pension and retirement funds
in the island nation. This legislation would bring
competition to the Fiji National Provident Fund as early
as 2007. Fiji’s retirees will have to weigh in on the
merits of a policy shift that will inevitably impact the
financial security of generations to come.
Australia: Boomers Lack Good
Planning (November 3, 2005)
Accountants warn baby boomers to get some professional
advice before retiring. Too many over-estimate their
retirement savings and do not realize that what they
have may not be sufficient to support them after
retirement. Others rely too much on the social security
system.
Korea: Korea’s Baby Boomers Face
Retirement (November 1, 2005)
Korean Baby Boomers face uncertainty in their coming
retirement years. Unlike their Japanese or American
counterparts who benefited from strong economies during
their peak work years, Korean Baby Boomers came of age
during less robust economic conditions. In addition,
Koreans are more likely to take care of aging parents
while it is unlikely their children’s generation will do
the same for them. There is some good news for the Baby
Boom generation of Korea. By and large, they are
healthy, well educated and hold a lot of political
influence that could carry into their older years.
India: Bottom-up
Evaluation of Non-Contributory Social Protection
Policy for Rural Labourers in India (October 2005)
The Chronic Poverty Research Centre based in the UK
recently released a report evaluating the effectiveness
of non-contributory social protection programs on the
poverty levels of workers in rural India. The study
points out differences between effective implementation
strategies and program outcome. In the case of rural
Indian workers, the study shows the implementation of
non-contributory social protection schemes increase the
power of local powerbrokers over rural workers. At the
same time, social protection plans tend to help reduce
poverty levels of rural Indians. Experts caution that
government officials may try to influence outcome
indicators.
China:
DPP Lawmakers Oppose Pension Raise for Elderly Farmers
(October 29, 2005)
Lawmaker Wang Jung-Chang has raised opposition to the
motion to raise monthly pensions for elder farmers
because it will put a heavier financial burden on the
government. The original plan intended to assist elderly
farmers with a pension hike of NT $1,000 monthly. With
China’s budget deficit close to NT $300 billion, this
motion is still up for debate.
South Korea: Pension
Corporation Asked for More Than It Could Spend
(October 28, 2005)
Reports show that the Government Employees Pension
Corporation has been requesting much more money than it
needed. The Corporation has only spent 22.5% of the
money given to them. When asked for an explanation, the
Corporation replied saying that since the government
employees were being let go, it drove up the retirement
allowances and their action were preventive. But since
there have been fewer employees let go than predicted, a
much smaller amount of the budget was used leaving a
large sum of money in the Corporation’s vault.
Korea: New Retirement Pension
Plans Improve Stability Expectations (October 28,
2005)
South Korea has begun implementing its new pension
system. Now people will have two choices: the first
choice will be to receive their pension as an annuity or
to stick with the traditional system of receiving a
lump-sum. Because Korea’s social security is still not
very reliable, many feel that this new pension system
gives middle aged and elderly some security about their
financial needs after retirement. The new plan is called
the defined benefit type. However the new plan has no
history and no regulatory framework to guide it.
Corporate Korea is not fully prepared to set aside the
large amount of money. We will have to wait and see how
the system works out.
Taiwan: Pension Reform
May Be Put On Hold (October 28, 2005)
Pension reform is at the heart of this year’s political
campaigns in Taiwan. Current proposals aim to cap
pension funds put in a special savings account that
earns 18% interest annually. Several government
officials have suggested plans to reform the state
pension system be put off until after the December
elections to stop the issues from becoming overly
politicized. Members of the opposition party are calling
for cuts to government pensions that would benefit the
nation’s political leaders.
China: Prospect on Pension System
Reform (October 27, 2005)
(Article in Chinese)
A social security pension fund, corporation-sponsored
retiree pension and individual retirement accounts are
the three pillars for the Chinese pension system. As a
result, it is economically imperative to grant foreign
investment capital limited access, experts point out. In
particular, precautionary measures are especially
necessary when opening up the social security pension
fund since it has the biggest impact among the three on
the pension system and on current and future older
persons in China.
China: Challenges and Suggestions
for China’s Pension Reform (October 27, 2005)
(Article in Chinese)
A recent World Bank report noted that the Chinese
population aged at a much faster rate than did its
economic development. While the pension reform has been
in place for more than ten years and the nation has made
significant improvement, China continues to face
challenges and unsolved issues as the home to the
largest number of old people in the world.
South Korea: Pension Plan Key to Happy Retirement
(October 25, 2005)
Japan will implement a new pension system that will
begin on December 1st. The purpose is to provide more
secure post-retirement benefit program because current
retirement benefits are not 100% reliable. The new
pension system will have two new options: the defined
benefit plan and the defined contribution plan. Service
providers and staff will be provided with the
appropriate training to make sure the new pension system
is carried out properly. This new plan also allows
citizens to have an individual retirement account for
those who change jobs and still receive benefits from
their previous employer. As more workplaces adopt this
new plan and more employees decide to contribute to
their post retirement funds, we can expect to see
Japan’s funds steadily increase.
South Korea: MetLife Targets
Korea’s Retirement Pension Plans (October 20, 2005)
In the Asia-Pacific region, Korea is MetLife’s number
one market. They will introduce a retirement plan this
coming December. To show their commitment to Korea, they
set up the Children’s Welfare Foundation with a starting
contribution of 3.55 billion won ($3.4 million). This
MetLife Korea Foundation will support 17 institutions
with disabled children programs.
China: Pension Reform Expected to Implement in Parts
of Northeastern Provinces (October 20, 2005)
(Article in Chinese)
Prime Minister Mr. Jiabao Wen hosted the Oct 19 State
Council Conference approved measures on implementing
pension changes in parts of the Northeastern Provinces,
where many State-owned factories predominate.
China: China Frets Over Graying
Population (October 11, 2005)
After years of focusing on ways to increase the
country’s economic growth, the Communist Party leaders
are now expected to start revising the social service
system. Experts claim that China faces a $300 billion
dollars shortfall in accommodating its elderly.
Immediate revisions must be made with the aging
population growing rapidly while the proportion of the
working population is shrinking.
Australia: Retirees
to Benefit from Pension Rule Changes (September 28,
2005)
The Australian government will put into affect a revised
pension plan for new pensions starting this upcoming
January. The change takes into consideration longer life
expectancies and tries to accommodate this situation
with more flexible pension payments. This policy will
alleviate the stress that many elderly have, especially
those elderly whose only source of income is their
pension checks.
China: Review on Pension System
Reform (September 23, 2005)
Despite significant improvement on pension
change over the past two decades, China
’s pension system fails to
provide an all-inclusive plan. First, pension funds
system financed by government and state- owned
corporations is in the development and testing phase. Many pension
assistance programs are still waiting to be setup.
Second, current pension plan will be facing great
financial challenges as the population ages. Third,
the pension system in the countryside hasn’t really
started yet.
Korea: What Should I Rely on
for Living After Retirement? (September 21, 2005)
Korean workers in their 30’s and 40’s are financially
worried for their retirement life. These workers have
families to support and bills to pay, including house
payments. The Korean government wants to improve pension
system but it this policy will push up property taxes.
Many Koreans bought their homes thinking that it would
be a wise investment for their retired life. Now housing
prices are dropping. In December Korea will put into
effect a three-tier pension system: one that includes
public pension, retiree pension, and private pension.
The country plans to increase the pension benefits and
sustain low interest rates.
New Zealand: Anger Grows Over Foreign Pension Law
(September 14, 2005)
In New Zealand, great animosity among pensioners is
emerging because of the legislation’s reduction of their
superannuation entitlement. The Work and Income
government office reduces the super entitlement of the
New Zealanders who have worked overseas because they
receive a separate pension from them as well. Pensioners
are upset because they believe it is unfair that the law
makes no distinction between the taxpayer-funded schemes
and contributory pension schemes. Chris Arnesen, who is
a spokesman for the pensioners, says that the government
has taken no action to correct this problem over the
last past four years.
India:
Pension Bill’s Fate Rests on Left’s Consent (September
13, 2005)
The government is waiting upon the Left’s approval of
the provisions on the pension regulatory bill before
bringing it to Parliament. The Left has stated numerous
objections to the bill. The Party says that this pension
effort imitates Chile; pension fund managers found the
Chilean plan to be detrimental because they could not
pay the employees the minimum payments. Importantly, the
Left fears that that MNC pension funds may be invested
in offshore funds rather than with Indian investments.
As of now, the pension bill is on hold.
China:
Nation to Join EU in Pension Project (September 7,
2005)
On September 5, 2005, China
joined the European Union in the first ever co-operation
in a social security “mobile pension” project. At issue
is how to calculate pensions when a worker may change
countries or states during his or her working life, each
with slightly different pension arrangements. Although
not much detail is yet available, it is definite that
the EU and China
will hold a series of meetings to discuss topics social
protection, social cohesion, labor legislation, and
labor relations in multiple jurisdictions.
China: Three Obstacles Prevent
Farmer Workers from Participating Pension System
(August 29, 2005)
(Article in Chinese)
Many believe that every farm worker dreams of a
reliable pension plan. However, reports show more and
more farm workers choose to opt out of the pension
system and the trend continues. Why do they choose to
go without coverage?
Taiwan: Nearly 1 Million Workers
Will Not Have Retirement Pension (August 23, 2005)
As a result of the regulation in the Labor
Standards Act, there are an estimated 1 million
Taiwanese citizens who qualify for neither the state
run New Pension Scheme, nor Labor Insurance. According
to the Labor Standards Act, accountants, athletes,
coaches, doctors, lawyers, referees, the self-employed
and those working in companies with less that four
employees do not qualify for state pension benefits.
For working people for which the Labor Standards Act
does not apply, they must save for retirement
individually and be diligent to maintain enough
finances to last them throughout their retirement.
China: Pension Reform Urged to Better
Care For Elderly (August 19, 2005)
The province
of Guangdong
has a rapidly ageing population, with more
than 70 percent of the aged living in poor mountain
communities. The Guangdong Provincial Committee of Aged
People’s Affairs is calling on the government to quickly
reform the pension system and provide more care for the
elderly. Guangdong
is an aging society whose financial development is far
behind that of the Pearl River Delta Region, partially
due to the province’s decreasing birth rates. The
committee is seeking to pass reform for elder person’s
best legal, financial, and health interests.
India: Early Pension Withdrawals
Unlikely (August 18, 2005)
The standing committee on finance has recommended
that employees be allowed to make premature withdrawals
on their pension accounts under the new pension scheme
(or NPS). Although NPS will probably not go into effect
for about a year, it is doubtful that the government
will adopt the recommendation. The government has stated
that it thinks that early pension withdrawals would
“defeat the purpose of accumulating a corpus large
enough to generate a reasonable pension.” They believe
that early withdrawals would, in effect, defeat the
whole purpose of the new pension scheme.
India: Pension Payouts
Reach a Dead End (August 18, 2005)
The social welfare department of the Delhi
government has been paying
pensions to over 10,000 people who are already
deceased. Taxpayer’s money is, therefore, lying
dormant in many bank accounts and post offices.
Although the government has tried to get the unused
money back from banks and post offices, the process
has been very time consuming. They still have yet to
get all the money back. The money in these accounts
could be used for social welfare programs for senior
citizens, if only they could get all the money back.
Taiwan:
Politicians and Academics Call for More Privatized
Pension Scheme (August 8, 2005)
Taiwan has launched a massive
campaign to help its citizens think more seriously
about saving for retirement. The National Council of
Labor Affairs is offering Taiwanese workers the choice
between the old pension scheme and a new one. The new
scheme promises investors a fixed minimum return over
two years and calculates that the rate of return on
investments will reach 6 percent. This enticing offer
has lured twice of many people to choose the new
scheme over the old one. However, Chiu Shean-Bii, the
Chairman of the Pension Fund Association, argues that
the new pension scheme can only replace 30 to 40
percent of worker’s income in retirement.
Thailand:
Pension Plans Misunderstood (August 8, 2005)
The director-general of the Fiscal Policy Office
has said that if the people do not understand what the
mandatory savings program is all about, they will
think that it is just another tax. The legislation in
consideration right now, calls for employee
contributions of 3 percent. However, pension
authorities claim that in order for future retirees to
retain comparable living standards, they will need
pension benefits that are at least 50 percent of their
salary, much more than the current level of 13
percent, therefore the contribution rate should be 6
percent. The authorities fear, however, that if they
implement high contribution rates, many companies will
be eager to terminate their retirement benefit plans
instead of providing them in conjunction with
government benefits.
China: Ping An
Annuity Insurance Company of China Approved Rights to
Manage Corporate Annuity Fund (August 4, 2005)
(Article in Chinese)
Yesterday, Ministry of Labor and Social Security (MLSS)
granted a total of 37 firms the rights to manage
corporate annuity funds. Ping An Annuity Insurance
Company of China
, claimed to be the first institution specialized in
annuity fund management in China
, is quoted to operate very soon. Many believe corporate
annuity fund will promote the development of capital
market once the entry begins.
China: China Grants 37 Firms Right
to Manage Corporate Annuity Fund (August 4, 2005)
China's Ministry of Labor and Social Security (MLSS)
announced Tuesday that 37 firms have obtained right to
manage corporate annuity funds, which is part of the
country's insurance system for retirees. It is believed
that the government has finally found "reliable" finance
handling companies for the corporate annuity funds and
entry into the capital market is likely to start soon.
Singapore: Few Know How Much to Save
for Retirement (August 3, 2005)
According to Singapore 's
National Financial Literacy Survey, the citizens of Singapore
know how to save. Almost 90
percent of the population has money saved for a rainy
day. On the other hand, very few Singaporeans know how
much to save for retirement. The survey also shows that
many Singaporeans do not know about general financial
aids such as insurance and trusts. In order for retiring
Singaporeans to lead happy lives in their golden years,
Singapore
has to take steps to teach them techniques for building
a nest egg for retirement.
China: More Than 10 Institutional
Investors Approved Eligible in Initial Pension
Management Eligibility Evaluation (July 28, 2005)
According to China Business News, more than ten
institutional investors, of which two specialized in
pension management, were approved as eligible for the
pension management business in the initial eligibility
evaluation. Prior to approval, the pension management
business in China
was heavily monopolized by regional or industry oriented
pension management centers. Although the result is not
final, the deregulation is expected to bring positive
changes to the pension market in China
.
India: Retirement Blues:
Indians Expect Children to Take Care (July 26, 2005)
Deeply
engrained attitudes of family values, respect for
one’s elders and unity have placed the elderly in
the hands of their children for support and care in
their later years. A recent study showed that
roughly nine in ten Indian seniors (about 94
percent) expect their children to cover the majority
of their retirement costs. The study also revealed
that half of the Indian elderly persons believe that
money does not equate to happiness in old age. Would
seniors in the West be happier in their last years
by embracing this view?
Northern
Mariana Islands: Pension Obligation Bonds Eyed to
Fix Government's 80 Million Dollar Debt (July 19,
2005)
The Northern
Mariana Islands Retirement Fund is seeking permission
to float pension obligation bonds. The CNMI government
owes the Northern Mariana Islands Retirement Fund 80
million dollars in unpaid contributions. The
government offers a very liberal 24 percent of
employer contributions to the pension scheme while
employees only pay between 6 and 9 percent. But
because various crises have hit the Pacific area, the
government has fallen behind on payments to the Fund.
India: India's Old-Age Crisis (July
18, 2005)
With a population of over 1 billion people, barely
one-sixth of Indians are covered by pensions when they
retire. Yet, government workers, who comprise just 5-6
percent of the working population, take 55 percent of India
’s GDP in the form of pension benefits. This means that
a very small percentage of the Indian population is
using more than half of the country’s GDP. Indian
politicians need to formulate and implement a new
pension scheme whereby everyone has some form of
retirement coverage that doesn’t completely eat away at
the country’s GDP. India
has a pension problem that needs reform now, not later.
Bashkiria:
The Implementation of the Law Regarding the Benefits
in Bashkiria Is Happening (July 14, 2005)
(Article in Russian)
The Bashkiria Republic extends towards the western parts
from the Southern Ural Mountains to the rivers of Belaya
and Kama . The cost
of benefits payments in Bashkiria
during the last six months reached the amount of 485,728
thousand rubles. According to the official sources, the
mechanism for implementation of the Federal law 122 (the
benefits for the socially vulnerable people), is
functioning without major disruptions or problems. The
pensioners, veterans, disabled persons and other part of
the population eligible for receiving help from the Bashkiria government are
receiving free public transportation passes, additional
medical care, medical resorts tickets and other type of
benefits. For more information on the statistics of the
benefits expenditures for the pensioners and veterans in
Bashkiria , read
further.
China:
Retirement Life! Are You Ready? (July 9, 2005)
China
is
the country that currently hosts the most older
persons. Young
couples provide for four parents and one child, a
situation that is very difficult. Generally
speaking, every adult should secure their retirement
livelihood using three methods—social
(government-based) pensions (30%), employer pensions
(30%), and investments or savings that they have
purchased for themselves (40%). To prepare better
for retirement has become an important new topic for
the new working class.
Asia
Pacific: Economic and Social Survey of Asia and the Pacific 2005
This comprehensive document cites some of the
problems that come along with demographic shifts in Asia and the Pacific. The
aging rate of the population in this region is quickly
outpacing the number of workers to support them. With
less people in the work force to contribute to
pensions plans, large budget deficits will develop
without some necessary adjustments. Consequently, the
pay-as-you-go public pension system will need to be
augmented as the increase in pension payments to the
aging population puts greater demand on government
reserves. This
Economic and Social Survey suggests several policy
options available to those governments in Asia and the Pacific.
Taiwan: President Hails New
Retirement Pension Scheme (July 1, 2005)
The Taiwanese government has implemented a new
pension scheme; it is the first of its kind in the
small country. Despite protests from businesses
concerning the extra personnel costs associated with
the new pension scheme, it is meant to be a
progressive step toward helping workers and their
families live more contentedly during their retirement
years.
India:
Taking Pensions to the Hinterland: No Longer
Should It Be Seen As the Salariat's Preserve (June
27, 2005)
A tiny elite of 11 per cent of the total
population of India
is covered by a formal pension scheme. Many people
think that the National Pension System (NPS) could not
cover the vast number of people who are outside
today's pension schemes. The recently released Indian
Retirement Earnings and Savings (IRES) database,
produced information on 42,000 randomly sampled
households in India
. The trends that emerge from this database shatter
many myths. It is a myth to believe that the uncovered
sector works till death and, therefore, does not
require "old-age income security." On average, people
in the uncovered sector expect to withdraw from the
labor market when they turn 62; they tend to live for
an average of 15 years after retirement. This
highlights the importance of building up savings in
the working years, so as to finance their old age.
Australia: Australia
Faces Ageing Work Population Crisis (June 23,
2005)
According to an Organization for Economic
Development and Co-operation report, Australia must
expand the number of older people in the Australian
work force. Failure to do so, the study claims, will
result in labor shortages and a stagnant economy.
The OEDC suggests that less tax incentives for
retiring early and more coordination on aging
strategies within the government can help alleviate
the shortages. However, many people dream of
retiring early. Should Australians who can afford to
give up that dream to help their government? Or are
there other approaches, such as more immigration?
Better organized work situations? More equal
distribution of wages? Who will these policies
really benefit in the society?
China: Reform of Pension System:
Group Community” Employees Can Also Get Their
Pensions! (June 22, 2005)
Beginning
in March, the city of HaErBin has
broadened its coverage of participants in
the pension system. Employees in companies
of small cities or towns, which are called “Group
Community” employees, can also be included in the
pension system! According to the new policy, as long
as you are a worker in these companies, you have
records on file, and you did not retire before June
30, 2004, then you have the
right to receive pension benefits.
Japan: Baby Boomers Poised to
Turn Pensioners en Masse (June 21, 2005)
Like many countries, Japan is
wondering about the impact of mass retirements that
will begin to happen soon. Some view the situation
as an opportunity, especially for business thanks to
the emergence of a consumer group with a lot of free
time and retirement bonuses to spend. However, the
experience of seniors will disappear and firms will
only have younger workers. As the workers leave the
work force, they will begin to draw down their
savings and the household savings rates will
decline. What is sure is that the coming mass
retirement is a big issue for Japanese and will
change the face of their society.
Japan: Fast-Aging Japan Keeps Its
Elders On the Job Longer (June 15, 2005)
Many Japanese workers are enthusiastic about
working longer, even though the official retirement age
remains a relatively young sixty. Keeping the elderly at
work could help to maintain the size of Japan
's work force. Japan
's government hopes that people working longer will make
its pension benefits available later and later. With Japan
's birth rate declining fast for decades, the pool of
young workers is shrinking. Unlike the U.S. , Japan
is reluctant to rely on large-scale immigration to
support the work force. Instead, it is trying another
strategy: attract the elderly to work longer before
receiving retirement benefits, effectively dealing with
old age by making it start later.
India, New
Delhi: Pensions May Increase Fiscal Pressure (June
8, 2005)
In India, Asia's fourth-largest economy,
retirement benefits are available to about eleven
percent of the working population, about 3.4 million
federal government employees. Starting January 1, 2005,
India made it
mandatory for new federal employees to contribute ten
percent of their salary to a new pensions scheme, to be
matched by the government. The remaining eighty nine
percent of the workforce is engaged cash-in-hand with no
formal pension scheme. The government wants to cut the
pension burden since the pension liability has gone up
21 percent per year on average since the 1990s. Today,
together with interest payments, pension payments make
up half of India
's federal spending. While the government believes the
new policy will ease the pension portion of its
finances, it could take decades before the benefits of
the contributory scheme roll out.
Malaysia:
Social Pension for the Elderly (June 1, 2005)
Retirees are asking for a social pension in Malaysia. Some developing countries already
have a social pension so the much richer Malaysia
has the capacity to institute an
old age security income for women, family and every
older person who needs it. “No one at old age should
be deprived of food and shelter as enshrined in the
United Nations Declaration of Human Rights,” says Lum
Kin Tuck, president of the National Council of Senior
Citizens Organisations of Malaysia (Nacscom).
Japan:
What Japanese “Enterprise Pension” Can Inspire Us?
(June 1, 2005)
(Article in Chinese)
An “Enterprise
Pension” is a pension from a firm or employer intended
for its own workers at retirement. In Japan
, these pensions have been developed with government
supervision and the provisions vary from company to
company depending on their material conditions. At
retirement, employees receive the “Enterprise Pension”
in monthly or annual payments. Compared to the
government’s universal social pension system, employers
view the enterprise pension as part of their employees’
welfare and as an incentive for workers to stay with a
firm. Enterprise Pensions differ from firm to firm and
among countries. This article focuses on Japan
’s programs as a possible model for other countries.
China:
Trial Run in Canton Province to Strengthen Pension
System in Individual Part is Facing 10.4 Millions of
Historical Shortage (May 26, 2005)
(Article in Chinese)
In China, the exchequer in pension system is
mixed. There is no clear line for the money used for the
whole system and to the individuals. This means the new
participating employees have to defray the pensions give
to those now retirees; meanwhile, they have to
accumulate money for the pensions they will get when
they are retired. Canton province
is going to run a trial to strengthen this system in
individual part. The main focus will be, “separate the
exchequer for the whole and for the individual, making
the individual accounts be substantial.” However, the
biggest problem is, there is still a 10.4 billions of
historical money shortage need to be filled.
South
Korea: Government Pushes New Social Security System
for Elderly (May 24, 2005)
The South Korean Government and ruling Uri Party
officials have decided to set up long-term care
insurance for senior citizens as early as 2007 in order
to address the welfare needs brought on by the growing
elderly population.
China: 800 Millions of Old Debt for Late Pension
Distribution Has Been Paid-off in HeBei (May 24,
2005)
(Article in Chinese)
On April 25, 2005, less than one week prior to the “May
First” golden week, 92 companies in ChunDe, the capital
city of HeBei, placed late pension monies into the bank
accounts of some 7,941 retirees. The delinquent money
had been paid off! This is an important date to
remember. The problematic history of late pension
distribution in HeBei province
was solved on this day. The 840 million from the
government arrived on time and more than a hundred
thousand retirees got back their “living money.” This
project took 16 months to plan and complete and ended
these elders’ sadness over having no pension for more
than ten years.
Korea: Low-Income Seniors to
Receive W100,000 in Pension Benefits (May 8,
2005)
The Ministry of Health and Welfare said Sunday
it plans to increase the nation’s pension for low-income
seniors in order to offer more financial support for the
increased number of elderly beneficiaries. Since many
seniors voted for the political party now in power, the
party has had to come up with a plan to increase
pensions which were unconscionably low.
China: It’s Always Better for
Individuals to Have a Retirement Plan Earlier (April
30, 2005)
Financial specialists point out that the aged
population will be very large in China and it is not
possible for individuals to depend on the social pension
system to give them enough money. Therefore, it’s always
better for individuals to have a retirement plan
earlier, even in their 20s or 30s. The financial plan
for people close to retirement age should focus on
stable, safer investment tools, which can keep their
original money from losing. Younger people could choose
more profitable investment tools, which can secure them
against inflation.
China: Three Challenges and
Six Transformations in China Pension System (April
21, 2005)
(Article in Chinese)
Liu Yong-Fu, the minister of MLSS (Ministry of Labour
and Social Security), announced in
Beijing
that the social pension system is very important in the
field of social security. The people and money involved
are huge. To build up the system and to raise the needed
capital will take a long time. Now, China
can only distribute pensions normally. There are still
lots of problems that need to be solved. He notes three
challenges and six transformations in the near future
that China
must address.
China:
Social Pension System in China is Facing Harsh
Challenges (April 21, 2005)
(Article in Chinese)
Huaicheng Xiang, the president of the China Social
Protection Budget Committee, announced in Hong Kong that
the social pension system in China faces two difficult
challenges. Firstly, China
’s aging population is increasing very swiftly. In the
year 2000, the population of the 60-year-old’s and above
was about 10% of the national population, equivalent to
the world average. By 2030, the world average will be
16%, while the percentage in China
will hit 24.5%. China
will age faster than the world average. Secondly, the
social pension system is not healthy. The pension
insurance covers less than 15% of the work force. And
there is a historical deficiency between the new system
and the old one in place before 1990. Under these
circumstances, the Government must act more
efficiently.
China: Pension System for
Farmers is on Operation (April 13, 2005)
In ShanXi province,
there are 3,750,000 country town employees will be
recruited in the pension system, including 3 million
farmers. The number of China’s country town employees is 138
millions, however, less than 5% of them have pensions.
This large scale, new provincial new pension system
could solve the difficulties when the employees change
their working places (in cities or in country towns).
It could ensure a stable pension system within ShanXi province. It is also
an innovative approach in China.
Australia: An Increase of the
Age of Retirement? (April 12, 2005)
(Article in French)
The number of retired Australians is going to double
in 40 years according to a new study. The
demographic facts has pushed the Australian
government to ask employees to work longer to help
the country face the aging of its population.
China: More Capital to Tackle
Pension Deficit (March 28, 2005)
The Chinese government is trying to resolve
the problem of the national pension deficit. Indeed,
the “4-2-1 phenomenon” is putting the country's
only-children under huge financial pressure: they
now have four grandparents and two parents to
support. But increasing the retirement age would
make the available jobs situation worse. Now the
government is considering expanding the social
security network and using “more capital tied up in
State-owned assets” to support the plan.
China: Problems Facing the Pension
Systems in the Rural Areas (March 9, 2005)
(Article in Chinese)
The Chinese government intended to use the
social pension system in the rural areas to combine the
pension with family caretaking. The pension system in
the rural areas is called the “caretaking money for
elders.” In recent years researchers found problems as
they looked at the rural area pension system. If those
problems are not handled now, it is likely that farmers
will lose all of their money, a situation that will
endanger the stability of the society.
China: The Financial Experts Commented on the Three
Hotspots in Pension System (March 9, 2005)
(Article in Chinese)
During the Two Meetings this year, SiLin Zheng, the
minister for the Department of Labor Protection, told
the journalists that the pension systems should be
reformed, including GuDong Province.
NanJing: Many Companies Avoided to Pay for the
Pension for Their Employees (March 7, 2005)
(Article in Chinese)
During the year of 2004, the Department of Labor and
Social Protection in NanJing investigated the pensions
in the companies and got RMB 106 million. More than 600
companies have never reported the amount of pensions for
their employees. There are more than 10,000 companies
that did not report the real amount or avoided
reporting.
China: “Where Should I Go to Get my Pension?” (March
7, 2005)
(Article in Chinese)
An elders who is more than 60 years old told the
journalist, “I retired in Februry of 2001. But I
received the pension in June of 2003. Where should I go
to get my pension?”
India: Budget Likely
to Retain Sops on Housing, Pension (February 14,
2005)
The budget for 2005-06 is unlikely to toe the
Kelkar Panel's line of doing away with tax
incentives on long term savings and housing, but
Finance Minister P Chidambaram will have a 'hard
look' at all other sops, i.e., a concession, in a
bid to widen tax base.
Hong Kong: It Will Be Approved
That the First RMB 100 Million of the Social
Protection Budget Will Be Invested in Hong Kong
(January 29, 2005)
(Article in Chinese)
Recently in Shanghai Huaicheng Xiang, the president of
China Social Protection Budget Committee, said that
there is only paper work left to invest the social
protection budget to the abroad market. He is positive
about the plan and the budget will be around $50 million
to $100 million. Based on the analysis of the market
experts, the social protection budget to be invested in
Hong Kong will be
approved after Chinese New Year's Day.
China: For the First Time the
Social Protection Budget Exceeds the Expected Amount;
There Is No Problem Over Distributing Pensions on Time
(January 27, 2005)
(Article in Chinese)
Yongfu Liu, the vice director of Chinese Labor and
Social Protection Dept., said that the social protection
budget for pension, unemployment, medicine, and labor in
the last year exceeds the expected amount. This
development will build a more stable foundation for China
's social protection system.
China: A Company Pension Will
Become Part of Workers' Financial Support for
Elderly Chinese (January 15, 2005)
(Article
in Chinese)
On January 14, in Shenyang,
Liaoning Province,
Bin Jiang, the vice president of the Liaoning Labor and Social
Protection Dept., told the media that Liaoning
Province is
expediting construction
of a second leg of financial support for elders: a
company pension system. Liaoning Province is one of
the first provinces in China to try to change its the
social protection system. So far there are
1,124 companies in Liaoning
Province that have a company pension
systems. The accumulated company pension is RMB140
million, which supports 60,000 persons. The personal
average support is RMB2,333.
India: Government to
Set Up Regulator For Pension Sector (January 6,
2005)
Favouring financial sector reforms to foster high
8 per cent growth, the government said on Thursday it
would shortly set up a regulator for the pension sector
and announced the roadmap for banking reforms, which
includes allowing 74 per cent FDI (Foreign Direct
investment) in private banks. Doesn't this open India
to runs on its currency and other risks of
high return speculation? Why should national pensions
depend on high risks?
China: Xiamen City Will
Start Distributing Pensions to Those Whose Lands
Has Been Used by the Government (January 1, 2005)
(Article in Chinese)
Since Jan 1st, Siming District and Huli District in
Xiamen City will start distributing pensions to those
whose lands have been used by the government. In the
future, the system might be generalized. The system,
proposed by the government, says that those whose
lands have been used by the government will be
included in the city's basic pension system.
Return to Top of Page
Europe
Kazakhstan:
A Combination for Pensioners (December 21, 2005)
(Article in Russian)
Kazakhstan introduced a new Pension Reform eight years
ago. However, the reform plans are still far from
perfect and will not be complete until 2030. The
reform offers two types of pension plans: compensation
from the public pension funds “by schedule” or from
insurance companies “by annuity.” The first option
seems to have sparked much debate: it places an age
limit on how long pensioners could receive funding and
the annual amount they could request. Many people
oppose the established age limit and the “cut off”
principle. They also resent the idea of not being able
to manage their pension accumulations in the way they
prefer. The second plan is simply too expensive for a
great majority of pensioners. Kazakhstan is
considering other options. It has already established
an actuarial center at the National Bank.
UK: Pension Costs Could Hit UK Rating, Says
S&P (December 19, 2005)
The United Kingdom has failed to meet its revenue
projections for the past four years. So the
Treasury is blaming older people’s pensions which
have increased slightly more than predicted. Even
though the British pensions are the lowest in the
European Union, the Treasury warns that the
country soon will not be able to support their
seniors. Will British seniors, threatened with
ever-lower pensions, resist these veiled threats
to make them pay for the country’s deficits?
UK,
Scotland:
Almost 70,000 Elderly Scots Who Are Entitled to
Pension Credit Are Failing to Claim the Benefits
(December 13, 2005)
Scotland
’s government is trying to help the elderly as much as
possible but figures show that the most needy elderly
are not claiming their pensions. Figures show
that out of 350,000 households, 281,460 are claiming
their pensions. Since pensions were first introduced,
£10billion has been paid out to older persons. New
care standards for elderly in care homes and hospitals
have been put into effect. The
government has made efforts to urge older persons to
take precautions to stay warm over the holiday period. Cold-related
illnesses are the main cause of death in Scotland
.
Russia:
Robbery in Accordance with the Law (December 9,
2005)
(Article in Russian)
Two types of pension legislations currently exist in
Russia. One serves government officials and another
functions for ordinary citizens. They are as different
as sky and earth and lead to clear social injustice in
the society. Therefore, pension reform in Russia
yielded nothing more than fixing into the future an
extremely low pension rate for the majority of older
people and at the same time an enormously high pension
rate for the “elite.” The article details the stories
of some people who suffer misery due to this inequity.
What is the pension gap between ordinary people and
the richest in your country?
Russia:
Monetization Continues (December 9, 2005)
(Article in Russian)
While the Ministry of Health and Social Development
sums up the results of monetization for 2005 and
prepares for 2006, older Russians are getting ready
for a new surprise: elimination of subsidies for
utility charges. Whereas the federal recipients of
subsidies remain protected by the federal budget,
the fate of other socially unprotected citizens
(along with 8 million pensioners) falls into the
hands of regional governments.
Switzerland: National Bank’s
Gold Goes for Pensions (December 8, 2005)
(Article in French)
Some 7 billion Swiss Francs
were released through the sale of the National
Bank’s gold. This will soon be transferred to the
Federal Aging and Surviving Insurance Found
according to the Swiss Parliament’s latest decision.
But a referendum to be held in May 2006 may send
this money to the deeply indebted Disabled Insurance
Fund instead. In addition, another 14 billion
francs from the same sale will go to the Swiss
States for their use.
UK: UK Shelves Proposals
for Exotic Pension Plans (December 7, 2005)
The British Treasury decided not to include
residential property and exotic investments such as
fine art, wine, stamp collections, etc., into personal
retirement savings accounts. Many investors and
financial advisors are disappointed. The government
came to the conclusion that it would be difficult for
the police to regulate this new aspect of the pension
scheme if were to take effect.
Georgia: Georgian Pensioners
Gather Near the Parliament to Protest Against $15
Pensions (December 6, 2005)
(Article in Russian)
Georgian pensioners appear shocked by the
thoughtlessness of the Georgian government. They
demand that their pensions be increased from $15 to at
least the level of subsistence.
UK: Old Age
Provision: £10bn Boost to Pensioners Is Fuelled by
Energy Measures (December 6, 2005)
The basic state pension in the UK will increase to
£84.25 for singles and £134.75 for couples and take
affect in April. Gordon Brown states that this will
add £10bn a year to elderly incomes. These changes
will give 2 million pensioners a guaranteed income and
add to their monthly income. The Chancellor has also
announced that the “Warm Front” program will help
pensioners pay for heating in the winter and offer
£300 towards the installation of central heating if
pensioners do not have it in their homes.
France:
For a Fully Funded Pension Reserve Fund (December 6,
2005)
(Article in French)
The president of
Saint-Gobain, a major French company, a Pension
Reserve Fund manager and a French Union CGT leader
agree in this column to defend the French Pension
Reserve Fund.
The government created the Fund in 1999 in
order to assure funding for pensions to private
company employees after 2020. These leaders are
challenging recent attacks against the Fund and
support the original ambitious social approach of
the Fund. (See also the article What’s the Future of the
Pension Reserve Fund (December 2, 2005))
UK: Government Urges Insurers
to Start Low- Cost Pensions (December 5, 2005)
The pension minister directed the country’s insurance
industry to construct a low-cost retirement fund plan
by February of next year to help future British
elderly who are at the risk of poverty. The Pension
Commission would like all employers to contribute to
the National Pension Savings Scheme unless they
specifically disfavor it. Stephen Haddrill, who is the
ASI director- general, said that they would build and
improve on whatever the government has started.
Surveys show that many Britons do not save at all or
do not save enough because they cannot afford to save
any more, or do not trust the government to give state
pensions, therefore not investing in any pension
scheme.
Georgia: Saakashvili Determined a
Pension for Himself (December 2, 2005)
(Article in
Russian)
In the center of Tbilisi, just blocks away from
the parliament, Georgian pensioners are demonstrating
against the new law regarding pensions. The majority
of demonstrators are former military and police staff.
Opposition parties, who also disagree with reforms in
the pension law, backed the pensioner-demonstrators.
The head of the President’s Administration, Georgy
Arveladze, called the present pension order “abnormal”
and tried to explain the need for reform. But Georgian
elderly don’t believe the populist initiatives of the
president. They are enraged by the maximum pension
regulation introduced in the law, which specifies a
maximum amount of the pension regardless of how long
and where the recipient worked. The new law also
determines the size of the pension for the president.
Georgia: Pension
Increase to Take Toll on Retired Elite (December
2, 2005)
The Georgian government plans on revising the
country’s pension scheme. At present, the system
contains extremely high pensions for former high
government officials that drains monies from ordinary
retirees who can scarcely get by. They want to
increase ordinary pensions by GEL 10 and at the same
time decrease the pensions to retired high ranking
government officials. Presidential pensions will be
changed to be the equivalent of ordinary pensions. The
Democratic Front section of parliament opposes this
new revision and has already begun a poster campaign
to pensioners to protest for a system that takes into
consideration the number of years one has worked in
calculating how much pension one will receive at
retirement.
UK: The British Want to Save
Their Pensions (December 1, 2005)
(Article in French)
2.2 million of British retirees live beneath the
poverty line. That’s why the Turner Commission wants
to raise the retirement Fund from 6.2 to 8% of the
gross domestic product, which is still a lot less than
in France or in Germany (12%). But such action
requires that the pension system be reformed. It
appears that the British will have to work longer to
afford enjoying a decent retirement pension. That’s
why Lord Turner wants to create a public pension fund
that workers would automatically contribute to, in
order to counteract many workers what he calls
“lack of foresight.” Will employers raise wages
sufficiently to make possible such an additional
contribution from workers?
Bulgaria: Pensions: The State Intends to Turn Up The
Heat (December 1, 2005)
(Article in French)
The Bulgarian government is planning to offer a
Christmas bonus to many pensioners, especially the
elderly. Retirees who receive less than 100 leva per
month (about 55 dollars) will get a larger Christmas
bonus. At the same time, the government intends to
reduce the number of unemployed people receiving
pensions by putting them back on the employment
market and fighting against unjustified advanced
retirements.
UK: Key Proposals and
Conclusions of the UK Pensions Commission: State
Pension Reform (2005)
The UK Pension Commission released a landmark report
to outline the future of the British pension system.
The report called for a gradual increase in the
retirement age to 68 and pegging state pension
earnings to wages rather than prices. In addition, the
Commission recommended the establishment of a National
Pension Savings Scheme (NPSS) to increase pension
savings for those who do not have access to a pension
plan through his or her employer. Individuals would be
automatically enrolled but have the option to
withdraw. Employees would contribute 3% of earnings,
employers would contribute 4% and the government would
give 1% to the NPSS. Finally, the report called for
increased protection of older persons under age
discrimination rules as well as expanded training
schemes for all persons regardless of age. The British
public has met the Pension Commission’s suggestions
with mixed reactions. Only time will tell if the plans
will yield more financially stable retirees.
Spain: New
Retirement Figures Assuage Concerns Over Pension
Crisis (2005)
Early retirement is popular in Spain. However, the
number of people who choose to take early retirement
has declined for the first time in three years. While
the Spanish retirement age is set at 65, many decide
to retire around 63 and continue to stay in the
workforce while collecting Social Security. This
amounts to an additional 100,000 euros per person in
Social Security expenditures. Are partially retired
Spaniards draining funds from their fully retired
counterparts?
France: What’s The Future of
the Pension Reserve Fund? (December 2, 2005)
(Article in French)
The Pension Reserve Fund is under threat. Former
French Prime Minister Lionel Jospin created this
administrative organization in 1999 in order to assure
the payment of pensions to private employees after
2020. The Fund is supposed to reach a total of 150
billion euro by 2020. But its current 25 billion euro
balance may interest the government for another use.
Over the last three years the annual contribution of
the State to the Fund has been reduced. These actions
threaten the survival of the Fund which may not be
able to reach its goal in 2020. Last November some
French senators were close to eliminating the Fund.
More, the elimination of the Fund could have very
serious consequences on the Paris stock exchange, one
of the most important in the world. The Pension
Reserve Fund is today one of its largest French
investors.
UK: Blair Urged to 'Stand
Up' To Brown (November 30, 2005)
Some members of the British government have expressed
concern over a new proposal that calls for increasing
the retirement age, ending means testing for pensions
and creating mandatory pension savings plans. Members
of the Liberal Democrat Party called upon Prime
Minister Tony Blair to implement the reforms set out
in the pension proposal, as Liberal Democrats
speculate that Chancellor Gordon Brown will attempt to
stymie the implementation of pension changes.
UK: Britain Considers
Raising Retirement Age (November 30, 2005)
In order to have an effective state pension and meet
the demands of the population, Britain is making plans
to raise the retirement age and to increase the
minimum state pensions according to the Pensions
Commission. By the year 2050, the life expectancies of
elderly will increase for both men and women to 87 and
89 years old respectively. Approximately 10 million
people of working age are not saving nearly enough for
their retirement. If the Pensions Commission receives
that okay signal, they will start implementing a new
system whereby everyone will be automatically enrolled
in the National Pension Savings Plan in which both
employers and employees will have to contribute a
fixed percent of their salary to their pensions;
employers 3% and employees 5%.
Russia: Stalled Pension Reform
Threatens Bond Market (November 29, 2005)
Many Russians face a terrible dilemma because they do
not know where to invest their savings. This leaves
the Russian Government with too much cash. Young
Russians do not trust the financial markets after
seeing the financial crash in 1998; rather they invest
in buying property rather than saving for their
retirement. Inflation is reducing older Russian’s
savings sharply. They are barely getting by on the
state pension that only provides $80 a month (which is
less than 1/3 of a regular salary). At the moment, the
Russian government is deciding whether to allow the
Vneshekonombank pension fund to invest in riskier
assets and let private pension funds take larger
responsibility of Russia’s pension. Whatever the
decision may be, the main goal of this pension reform
is “to provide a steady flow of long-term resources to
our real economy, ” says the Pension Bund
officials.
UK: Retirement - A Very
Modern Notion (November 29, 2005)
The retirement age in many nations is 65 years. This
is the case in the UK. However, a recent report
suggests pension reform should include an increase in
retirement eligibility to age 68 over time. This
article also explores some of the assumptions built
into retirement at age 65.
UK: Charities Complain They
Cannot Afford Pension Liabilities (November 28,
2005)
Pension funding problems further escalate when
charities receive the final bill that states the
millions of pounds that they owe to the Pension
Protection Fund. Because of the increasing deficit,
some charities fear that some services they provide
will have to be cut in order to conserve some money.
Charities pay a progressively rising amount to the
Pension Protection Fund when the money could also be
used to help those in need. Since charities do not
have the ability to raise money the way corporate
sectors can, they have asked for a “special status”
from the Pension Protection Fund that would allow them
to pay a reduced premium. What will happen to their
employees at retirement?
UK: Small Business Alarmed at Nationalised Savings
Proposal (November 28, 2005)
Possible new pension regulations in the UK could
cause significant financial constraints for small and
medium enterprises (SME). A new proposal would
automatically enroll all Britons actively in the
workforce into a private pension. Individuals can
voluntarily choose to opt out of the scheme, or if one
decides to stay enrolled, he or she is required to pay
in 4% of earnings. Employers would then be required to
pay an additional 3% into the pension to match the
employee’s contribution. The pension plan is aimed at
increasing the savings rate. Statistics show that
individuals working for SME’s tend to save less than
those who work for larger organizations. SME
executives see such mandatory payments as cost
prohibitive, so much so that it may lead to layoffs or
hiring freezes.
Czech Republic:
Government Fails to Have Up to 7 Billion for
Pensions (November 28, 2005)
The Czech Republic will not be able to fulfill its
health and pension obligations. The government
projects it will be 4 billion crowns short on pension
funds, and 2-3 billion crowns off to meet health
benefit payments. Last year, the government decided to
fund benefits by barrow money from the national postal
system. As pension demands continue to grow, the
government still needs to pay off the loan to the post
office. Poor financial planning shortchanged the Czech
people.
UK: Marry Your Friend to Save Tax and Share
Pensions (November 23, 2005)
The Civil Partnership Act that will take effect
December 5, 2005 will benefit elderly people who live
together. The country has been working on developing a
new law for “gay marriages” so that they receive
similar benefits as do heterosexual couples in regards
to pensions and taxes. This new law will also allow
friends to register as civil partners and receive the
same financial benefits.
Russia: Pension by Verdict
(November 22, 2005)
(Article in Russian)
The Supreme Court of the Russian Federation confirmed
the right of local and regional courts to take action
on the restoration of job service records. The
decision came as a result of a complaint by a
pensioner from a rural area. She asserted that she had
worked on the collective farm in 1940s. The records of
the farm no longer exist and the Pension Fund refused
to pay compensation for that period. Although the
local court satisfied her complaint, the regional
court cancelled the decision, saying that it exceeded
the local court’s commission. The case reached the
Supreme Court, which approved the earlier decision.
From now on, older citizens can fight for their
pensions with the help of the courts.
Czech Republic: Czechs
‘Need Parametric Pension Reform’ (November 21,
2005)
The International Monetary Fund (IMF) has warned the
Czech Republic to establish a parametric pension
reform and to raise the retirement age. The IMF says
that the current pension funds will not be enough for
the older people in the country. The IMF wants
prefunding of pension deficits by cuts to the
government’s budget. The IMF says that this change
will reduce the pension debt and increase the rate of
return of the pension system.
Ukraine:
Government
Will Develop Strategy for Pension System
Reformation until December 1, 2005 (November 15,
2005)
(Article in Russian)
Vyacheslav Kirilinko, vice-prime minister of
Ukraine, says that Ministry Cabinet is currently
developing a Strategy for further reformation of the
Pension Systems for 2006-2016. The strategy points
toward merging all pension legislation system so
that payments to all pensioners would be organized
according to a single principle. Currently there are
16 legislative acts that determine pension payments
and the payments are differentiated according to
jobs. The State budget is not supposed to supply
money to the pension fund any longer.
Germany: German
Pension Assets ‘Set to Surge to €4trn’(November
15, 2005)
Occupational pension assets in Germany are to
increase by 4 trillion Euro over the next 25 years.
Industry leaders also see a bright future for
Germany’s private pension schemes. While private
plans are expected to continue to perform well, not
many Germans are enrolling in new private or
corporate pensions. By the end of 2005, less than
40% of eligible Germans will have enrolled.
Financial planners and government officials should
consider ways to educate the public on the mechanics
of retirement savings as a way to boost enrollment
in private pensions.
Malta:
Increase In Government Expenditure On Social
Security Benefits (November 14, 2005)
Government expenditures on Social Security in Malta
increased in 2005 by Lm8.1. Survivor and disability
pension spending also increased by Lm.7 million and
Lm.5 respectively. Malta experienced a net increase in
retirement pension beneficiaries as well. Social
benefits accounted for over 77% of Malta’s annual
budget.
Belgium: Pension’s
Future in Question (November 14, 2005)
(Article in French)
Over the last few weeks the current governmental
project called the “Intergenerational Pact” in
Belgium has provoked many strikes, advocacy alerts
and dire warnings as well as support and
congratulations from various organizations, unions
and people.
(Other articles in
French available about this topic: 1
/ 2
/ 3/ 4).
This article offers a brief unbiased synthesis of
the issue and makes the debate clearer for citizens
and observers.
Turkey: Retirement Age
to be Pulled up in 2036 (November 14, 2005)
Turkey joins the ranks of many other nations that
have chosen to increase the retirement age.
Government officials announced the gradual increase
in retirement age would commence after 2036.
Officials say that changes in the retirement age are
necessary in Turkey to tackle the financial strain
on public social security, pension and social
insurance programs due to a growing aged population.
The Turkish Minister of Labor and Social Security,
Murat Basesgioglu, emphasized technological
efficiency within the government bureaucracy as an
additional way to control costs.
Ireland: Pensions
Board: Make SSIA Switch Tax-Free (November 13, 2005)
Ireland’s Pension Board recommends that workers should
be able to move funds from Special Savings Incentive
Accounts (SSIA) to pension plans without being taxed.
The Pension Board hopes tax free transfers will
encourage more people to save for retirement. Over one
million workers opened SSIA’s since 2001. However,
only 55,000 workers enrolled in Personal Retirement
Savings Accounts (PRSA) after their inception two
years ago. PRSA’s are aimed at increasing savings
rates among lower income workers. Unfortunately,
neither of these reform efforts have greatly increased
the number of Irish citizens who have a pension.
UK: Older, Wiser - And A
Better Insurance Risk (November 12, 2005)
The British financial market tailors services to the
over 50 population. Portman and Stroud & Swindon,
two well-known names in the UK financial services
industry, now offer savings accounts with special
interest rates and privileges for older persons.
Homeowner’s insurance premiums vary widely. However,
analysts suggest premiums will go down over time,
especially for those who are retired.
Russia:
Zunbarov Shows Results of Pension Changes (November
10, 2005)
(Article in Russian)
Michail Zubarov, Minister of Health and Social
Development and Alexei Kudrin, Minister of Finance,
reported to the Deputies of Parliament about the
results of Bill 122. This Bill significantly changed
the system of social support in Russia. According to
this Bill, former social benefits were converted to a
cash value. Recipients had a choice to use the money
for a social package that assured safe benefits or to
take the cash instead. Alexei Kudrin, in commenting
about the past nine months since the change, says,
that in spite of the initial fuss around monetization
“the majority of population in main regions of the
country has chosen money. Thus, the citizens preferred
monetization.” Zubarov also informed Parliament that
in 2005 older persons in Russia will have 1,1
milliards rubles of additional support.
France: Ministerial Press Release Answering
Criticisms about Services for Dependent Elderly
(November 10, 2005)
(Press Release in French)
Global Action on Aging
focused last week on the vehement report from the
French Cour des Comptes about the French
administration's failure to care adequately for
dependent old people. This press release from Mr.
Philippe Bas’ office, French minister for the
elderly, responds to this criticism with the current
government’s policy changes affecting dependent
elderly. He says that the French Government is
putting more money into home renovations and into
developing domestic medical services for the
dependent elderly.
France: Vehement Official
Criticisms of the Administration's Care for Older
People’s Dependence (November 10, 2005)
(Article and Report in French)
The “Cour des Comptes,” the French institution
responsible for controlling the administration’s
expenses has denounced in an unusually severe tone the
lack of administrative care for the dependent elderly.
The report criticizes the “darkness,” the “complexity”
and the “inefficiency” of a “non-coherent system”
built by the “avoiding strategies” of the current and
former Administrations. The Court says that seniors’
dependency should be considered the fifth risk
protected by French social security.
France: French Senate
Committee for Social Affairs publishes its Report
About Pensions (November 9, 2005)
(Article and Report in French)
The French Parliament is
currently debating the social security budget for
2006. This report about Aging Pensions has been
released allowing Members of Parliament to analyze
current social needs. The report analyses the
Swedish Pension’s Reform, promotes employment of
seniors (over 55) and describes the current issues
for the French Pension system.
Italy: Italian Pension
Funds Agree Merger (November 3, 2005)
Two large pension funds for the chemical and
pharmaceutical industry in Italy merged, creating the
first contractual occupational pension fund in the
country. The Fonchim and Bayer Italia’s pension funds
have similar investment strategies, encouraging a
diversified portfolio in equities, bonds and
cash.
UK: Hutton’s Appointment May
Delay Pension Reform (November 3, 2005)
John Hutton will be taking care of pension issues in
the United Kingdom beginning immediately. Many feel
that this is a setback to the UK’s pension reforms
because it will take Hutton at least six months to
familiarize himself with all the information and it
will take time for him to have the trust of those who
will support his actions. There are mixed feelings
about Hutton; some think that he lacks skills compared
to predecessor Blunkett while others feel that Hutton
will be able to quickly adjust and be very
efficient.
UK:Could You Get By on £50 a
Week? (November 1, 2005)
Women in the United
Kingdom face big difficulties
getting a full state pension from the government
because they have not worked enough years in the
workforce. Ann Greene (one woman among many who did
not qualify for a full pension) tells her story about
the embarrassing and intrusive process she needed to
go through to claim the little pension that she was
allowed to receive. Work and Pensions Secretary David
Blunkett has put this means testing issue as a top
priority for changer. His plan is to revise the
country’s benefits and pension system.
Spain: New
Retirement Figures Assuage Concerns Over Pension
Crisis (November 2005)
Early retirement is popular in Spain. However, the
number of people who choose to take early retirement
has declined for the first time in three years. While
the Spanish retirement age is set at 65, many decide
to retire around 63 and continue to stay in the
workforce while collecting Social Security. This
amounts to an additional 100,000 euros per person in
Social Security expenditures. Are partially retired
Spaniards draining funds from their fully retired
counterparts?
Germany: Focus on
Pensions, Health in German Coalition Talks (October
28, 2005)
Germany’s aging population continues to grow. That
means current health care and pension budgets must
expand to meet the needs of German retirees.
Government leaders propose a gradual increase in the
retirement age from 65 to 67 to curb increased program
costs. Since there will be more retirees than workers
over time, Germans may be faced with increased
payments into the health care and pension systems to
help pay for retirees.
Germany: Germany About to
Raise Pension Age to 67 (October 27, 2005)
Germany’s government is thinking about increasing the
retirement age to 67 from the current age of 65. The
purpose of this increase is to expand the workforce
and ease the pension costs on the state. The
government hopes to reach a decision by November 12th.
Welfare and Pensioners’ groups argue that this is not
a fair proposal since there are not enough jobs for
the elderly. More, those who have been paying pension
contributions have counted on leaving the workforce at
65 as a matter of right. If this new proposal is
accepted, it will take effect starting in 2011.
UK: UK May Face €5.9bn ECJ
Pension Payout (October 27, 2005)
Trade unions in the UK accuse the British government
of neglect in fulfilling its obligations to thousands
of workers who lost their pensions due to insolvency.
Union activists have taken their case to the European
Court of Justice (ECJ), claiming the British
government violated Article 8 of the European
Insolvency Directive. Article 8 requires nations to
ensure pensions are fully funded at all times. If ECJ
rules in favor of the union and its members, the
British government will need to pay out all pensions
owed immediately out of the Treasury. The British
government established the Pension Protection Fund in
2004. But for workers who lost their jobs and pension
benefits in years’ prior, the PPF is too little, too
late.
Scotland: Half of City
Workers Face Poverty-Hit Retirement (October 26,
2005)
The Edinburgh, Scotland, government sees that more
than half the population is headed towards poverty
when they hit retirement because they do not
contribute to their future pension schemes. Based on
recent statistics, the number of people not making
contributions to a pension plan has increased since
Labour came into power in 1997. Campaigners warn
citizens that they must start saving for their future
if they do not want to be poverty stricken. While some
may not be eligible to qualify for a pension scheme,
many others just do not invest in pensions. They say
that they do not trust the system or fear fraudulent
schemes or worry that the pension companies will go
bankrupt.
UK: Thousands of State
Pensioners Are Struggling with Debt (October 25,
2005)
Age Concern calls attention to the greater number of
older persons who are struggling with debt that is
goes up everyday. With the increase of gas and
electricity prices, it is very difficult for mid-life
people to pay their bills and contribute to their
pension funds. Age Concern is most worried about those
people who are turning to loans and even credit cards
with high interest rates to pay their current bills
because they don’t have sufficient money. Later they
will find themselves overcome with debt.
EU: Immigration 'Can Help
Europe Support Its Ageing Population' (October 25,
2005)
European Union (EU) leaders estimate spending on
programs for the ageing will increase up to 8% in most
EU nations by 2050. The older population continues to
grow, while the workforce shrinks due to demographic
and economic shifts throughout Europe. EU officials
see a need to change the labor market to increase
productivity and reduce unemployment in order to
support the increasing needs of a growing ageing
population.
France: The Government copes
with the deficit of social security (October 25,
2005)
(Article in French)
The French government will have to go through another
ordeal as the new bill about social security will be
presented to the National Assembly. Emblem of the
French social protection, Social Security will turn 60
this year. But its future is rather unsure. This year
the deficit reached its zenith, with 11.9 billion
euros. That’s why the French government is taking
measures to reduce the deficit from 11.9 to 8.9
billion euros. But the Assembly will notice that the
Government wants to stop reimbursing drug costs.
UK: Rate of Pension
Closures Slowing (October 24, 2005)
British employers are closing final pension schemes to
new members due to mounting costs. However, the number
of pensions closed to new members dropped in the
2004-2005 tax year. Experts say the decline reflects
moves by many employers to close or terminate pension
schemes in previous years. Final pensions offer
employees a fixed percentage of their salary. More
employers choose to limit new membership into pensions
due to high costs and market fluctuations. What will
this mean for Britain’s future retirees?
EU: EU Set for Clash on
'Anglo-Saxon' Versus 'Social' Welfare Models
(October 21, 2005)
European Union (EU) nations will debate competing
pension and social welfare models. Many EU nations
subscribe to a “social model” that provides
substantial pension and unemployment benefits based on
wage calculations. The “Anglo-Saxon” model, prevalent
in the UK as well as the United States, promotes
retirement benefits based on contributory pension
systems. Critics of the Anglo Saxon model point to
high levels of income inequality in the UK as an
example of the system’s failures. Yet, nations with
the social model in place tend to have high rates of
unemployment. Academic experts say it is labor
policies, rather than approach to pension schemes,
that have the most impact on the economic climate of a
nation.
UK: Pensions Reform Urged As Millions of Women Face
Years of Poverty (October 20, 2005)
Pension experts have concluded that women need to
start planning for retirement in their early 20’s.
Moreover, those mothers who take breaks from the work
force should continue to pay into their pension plan
or else face financial difficulties when they get
older. Because many women put their husband’s
financial stability ahead of their own, they are very
dependent on their husband and rely on them for their
future financial needs. Pension experts say the women
with this assumption may end up losing much more if
their marriage comes to an end because they put their
whole savings into their husband’s, leaving them with
nothing saved for themselves.
EU: Modernising
Europe to Meet the Challenges of Globalisation and
Ageing (October 20, 2005)
The European Union’s (EU) population over 65 will soar
to 58 million by 2050. EU leaders recognize the need
for changes in their individual health care and
pension policies to meet the needs of older persons.
The EU recently released a report that provides
recommendations to member nations on how cooperation,
along with changes within countries, can provide
services for tomorrow’s retirees while remaining
competitive in the global economy.
European Union: EU Offers
Pension-Friendly Proposal (October 20, 2005)
The European Union (EU) proposed a precedent setting
rule to allow pension portability for workers who move
between EU nations. Currently, it is not possible for
EU residents to continue to build up a pension earned
in one country if he or she moves to another EU
nation. New EU rules would enable workers move their
pension earnings with them. EU officials hope pension
portability reform will encourage a more flexible
labor market. However, the plan will take place over a
ten-year transition period as it will be difficult to
implement in EU nations with no private pension plans
available. Pension portability can help future
retirees strengthen financial security.
UK: Women Face Pension Poverty
(October 20, 2005)
British government officials recognize a need to
change the pension system, as two thirds of the UK’s
poorest retirees are women. Studies show that the
current contributory pension system can treat women
unfairly in their retirement years. Many women who
take time away from the workplace to care for their
family end up contributing less money into the pension
system. At the same time only 31% of British women are
saving for retirement independently. In addition to
government reforms, women need to take more
responsibility for their retirement finances to secure
a decent standard of living in old age.
UK: Women 'Facing Pensions
Barrier' (October 19, 2005)
50% of British women stop saving for retirement after
the birth of their first child. A recent study by
insurance company Scottish Widow shows a strong
correlation between a reduced employment history due
to child rearing and a low retirement income. Experts
say a “citizen’s pension” would improve the lives of
older women, as such a plan guarantees a basic pension
payment to all regardless of work experience.
France: Actif Senior Plus: a New Employment Agency
“for Seniors Only” (October 17, 2005)
(Article in French)
"Actif Seniors Plus" is a new employment agency in
Paris to help seniors find jobs. This concept,
originally from Netherlands, has captivated the French
media . Encouraged by a recent French law that allows
seniors to have a job during their retired years, such
agencies emerged. This law led thousands of seniors to
go back to work. As a matter of fact, the agency has
been crowded since the day it opened. From the
companies’ point of view, it is a good opportunity as
“a freshly retired person who goes back to work is
efficient from the very first day,” the agency
director explained.
France: IBM Wants to Rescue Companies Dealing with
Pre-Retirement Baby Boomers (October 17, 2005)
(Article in French)
The American computer giant, IBM, just launched new
services to help companies dealing with the baby
boomers who will retire soon. As a matter of fact, IBM
introduced new tools to help transfer all the
knowledge and competence about to leave the company
with the coming retirements. IBM wants to give other
companies the diagnostic instruments to transfer this
knowledge to the new hires.
Belgium: Prime Minister Says it is Time to Worry
About Aging and Globalization (October 12, 2005)
(Article in French)
The Belgian Prime Minister presented his federal
program to Belgian representatives on October 12,
2005. Guy Verhofstadt clearly insisted on the
necessity to work toward intergenerational solidarity.
“Two main issues are coming at the moment:
globalization and aging,” the Prime Minister said.
This article analyzes the way Belgian Prime Minister
announced his intention to reform the national pension
system. This change would add 8 more years to an
employees’ worklife before having the right to a
pension.
UK: Call to Scrap Means-Tested
Benefits in North (October 11, 2005)
Northern Ireland officials are urging the UK
government to end the current means tested state
pension system for a universal senior citizen’s
pension. Many seniors view means testing as demeaning,
saying the questions violate their pride and privacy.
A universal pension for seniors would give greater
equity to women and those who may not have worked
enough to qualify for an alternative retirement
scheme. Changing the pension system is economically
feasible, as a simple universal plan will save money
on administrative costs that are currently incurred by
the means tested program.
France: Female, Old and Single:
Triple Discrimination (October 7, 2005)
(Article in French)
In 65% of cases, an old French woman who lives alone
means that she is poor. In terms of income, it’s
better to be an old man than an old woman. At present,
French women live to very old ages. They survive their
husbands by many years. Most currently retired couples
live on the husband's pension. After his death, the
wife must survive on about 54% of her husband’s
income, assuming that they were legally married.
Retired men have an income twice as generous as older
women. The situation is even worse for wives who were
worked alongside their husbands without formal
employee status. To prevent this discrimination,
families and the government must encourage women to be
financially independent. Further, they must stop
discriminating against women in the workplace so women
can have a fair chance to earn a decent living.
Norway: Norway Proposes
Mandatory Occupational Pensions (October 7, 2005)
The Norwegian government wants to set up a mandatory
occupational pension system law that would be put into
effect starting January 2006. This new system is to
provide safe pensions for all at old age along with
the state pension rights from the national social
security system. This occupational pension system will
apply to companies that are both taxable and
nontaxable with a minimum number of working years. It
will also include a separate premium waiver that will
provide for an old age pension in case a person
becomes disabled.
UK: UK Further Delays New Pension Funding Standard
(October 6, 2005)
The United Kingdom government is working on a new
Benefit Scheme Funding scheme to replace the old
Minimum Funding Requirements. They predict it will be
put into effect on December 30, 2005. The new system
was scheduled to take effect earlier, but was delayed
to make the regulations meet the criteria of the
European pension’s directive.
Ukraine: The Parliament
Adopted the Legislation Proposed by Deputy Feldman
(October 6, 2005)
(Article in Russian)
On October 5, 2005, the Ukrainian Parliament finally
adopted the legislation on “Adopting Changes for the
Ukrainian Law on the Status of War Veterans and
Adequate Social Protection Safeguards.” The new
legislation stipulates that the social benefits for
some categories of veterans of World War II will
increase. According to one of the authors of the first
legislative draft, the National Ukraine Deputy
Feldman, the current law will actually deprive many
veterans of the government benefits.
France: Could Anybody Remind
Me What the “French Social Model” Is? (October 4,
2005)
(Article in French)
While government pensions are at risk in France, the
private ones are doing more than well. This good
financial health of the private funds sounds quite
surprising while “retirement” sounds unreal to young
workers. This means the French system is currently
splitting into two parts, it may also mean that there
is no real “French social model” anymore. Could the
reform the French government is currently planning
save what used to be “the European social model?” No,
the left wing answers, the government only postpones
the debate to 2020.
Netherlands: Netherlands’
De Geus Won’t Touch Pension Rights (October 4, 2005)
The Dutch Social Affairs Minister Aart Jan de Geus has
refused to consider any revisions to the current
pension rights system. Those who want to change the
pension system to benefit the baby boomer generation
have ideas that involve setting aside a separate fund
of pension money for the different generations. Others
believe that a collective pool gives better results
and more security. De Geus finds individual pension
plans undesirable due the revelations during the US
debate on private accounts.
France: French Social Security.
Aging Pensions Cross Red Line (October 3, 2005)
(Article in French)
The latest report of the French social security
accounting commission (CCSS) highlights the growing
deficit in the French social security system. “The
main reason for this is the acceleration of the growth
of pensions as a result of the increasing weight of
anticipated retirements” says CCSS. This is the
consequence of the former French minister of social
affairs Francois Fillon’s decision to encourage those
who started working early in their lives to retire
earlier. Though intending to reduce unemployment,
Fillon’s measure has a real cost for the French social
security system. This decline should be reduced in
2006. More generally speaking, this change is a good
sign of a double phenomenon: the French State is more
concerned about aging issues but seems to be at the
same time ignoring real needs to finance its
policies.
France: Retired
Immigrants "Vulnerable among Vulnerable"
(October 2, 2005)
(Article in French)
The French radio station “France inter” interviewed
retired immigrants from Algeria, after INSEE (French
National Institute of Statistics and Studies)
published a research on the subject. The entire
interview dealt with this question: “Why don’t they go
home?” which was also the heart of the INSEE research.
Indeed, nothing had been written so far about retired
immigrants in France who are quite invisible in the
official figures. Understanding the immigrant reality
goes hand in hand with the comprehension of their
social, professional and parental situation. The study
will help organizations that deal with immigrants’
retirement and have a real political impact.
France:
Economic and Financial Consequences of Aging (2005)
(Report in French)
In this short report, experts based at the French
Ministry for the Economy analyze the economic and
financial consequences of aging. For example, this
report shows how aging may transform consumption
habits and consequently the economic and productive
structures of the country. The need for industrial
products decreases while the need for services
increases. Aging may provoke a slowdown of average
productivity growth since productivity grows at a
slower rate in the service sector. Service costs tends
to remain high because productivity gains are not as
important as in industrial production. Because older
people consume more services than goods, because of
the lower productivity rate in the service sector, and
because pensions are indexed on average consumption
prices (not on average service consumption prices),
older people will see a decrease in their purchasing
power. The report highlights the need to plan for this
situation by encouraging older people to have
additional private financial resources. The report
also analyses the consequences of aging from the
standpoint of pension policies.
UK: Retired Men ‘Will
Live Until 90’ (September 29, 2005)
Life expectancies have increased drastically
according to the latest mortality survey. This
extended life expectancy is primarily affecting those
born in the mid 1930’s (a group who are often referred
to as the golden cohort). The survey predicts that an
average 65 year old man will live an extra three and a
half years extending the age to 86 years and 7 months.
If this extension of mortality age does happen, it
will not be good news for pension funds, life
insurance firms, and government. Funds are already
strained which has made the government think about
pushing back the retirement age to 65.
France: Only the Stock
Market Can Save the Pensions (September 28,
2005)
(Article in French)
The biggest problem of pensions is the still
decreasing number of workers for the number of retired
people, says a journalist of the right leaning
publication, Expansion. In 2025 the INSEE (National
Institute of Statistics) predicts, there will only be
two workers for every retired person. Previous
governments used to balance the discrepancy by
increasing the current workers’ pension contributions.
But this was only postponing the moment to find a real
solution, postponing the pain the journalist explains.
In this way, the problem is the same in France as in
the USA: less people paying contributions for more
ever increasing pensions. But is there a solution to
save the French system? Yes, Gilles Pouzin claims:
pensions should be directly connected to stock market.
Which leads in the end to another question: how to
privatize all pensions without hurting anyone? The
“transition will be hard”, Gilles Pouzin
confesses.
Europe: G-10 Chiefs Call
For Consistent Pension Funding (September 26,
2005)
Recently the G-10 heads of state, who represent the 10
leading industrialized countries, released a statement
calling for a steady funding of pension plans
worldwide. This article summarizes the meeting
highlights including a call for more responsibility on
the part of large corporations. The article notes that
G-10 leaders feel that having steady retirement
savings is essential to market growth and development.
It is clear from this summary that the G-10 realizes
that pension and retirement security are of vital
importance to the world’s population.
UK: Pensioners Strip on Brighton
Beach
(September 26, 2005)
A couple
of retirees whose retirement benefits were taken
away when their employers went bankrupt started
protesting on Brighton Beach wearing nothing but
plastic bottoms at the First Day of Labor Party
Conference. They protested almost naked in front
of a banner that read “2005 and Still Stripped of
Our Pension.” Although there were only a few men
were represented in this protest, many
more retirees that are in the same position as
these men. They all had to delay their retirement
because the money that they invested into the
pension scheme for years is gone and they won’t
see a penny of it. The government has now come up
with the Pension Protection Fund to assure current
workers of their pensions if their employers go
bankrupt. What about the people involved in closed
schemes now?
UK: How Bad Is the UK’s
Pension Crisis? (September 23, 2005)
The United Kingdom has a pension crisis because there
is just not enough money in the pension funds to give
the working population a comfortable pension. Why?
Pensiona greatly depend on the stock market shares
which have been steadily falling for the last two
years. This makes it difficult to repay
policy-holders. Also medical advances permit people to
live longer. The amount of money to put aside to have
a certain retirement income is steadily rising. The
government plans on making the minimum savings
required higher with a lower level of state pension
funds paybacks. Because more than 12 million people
are not saving enough to for their retirement, the
government is urging people to save more. Unless
something is done, the working population’s retirement
funds look grim with no guarantee of how much they
will receive.
UK: Work Longer for Fairer
Pensions (September 23, 2005)
The National Association of Pension Funds (NAPF)
has proposed a new pension plan by increasing the
eligibility of receiving the state pension to age 69. As of now,
the pension plan is based on the National Insurance
contributions but the newer system will not cost the
government any more than what it pays now; and it will
give citizens a more secure guarantee against poverty
after retirement. This will be a fairer and simpler
pension system because it will be beneficial for
women, carers, and part-time workers who do not
qualify for a pension plan today. The key to
receiving the state pension will depend on their
residency in the United Kingdom
.
Bosnia: The Anger of
Retired People (September 23, 2005)
(Article in French)
Retired Bosnians have been fighting to receive
their pensions for seven years. On the other hand,
the government minister Vignjevic claims the
“situation is not that bad.” In 1998, the government
of Bosnia decided to reduce pensions by 39%. But the
money saved through this policy actually
disappeared. That’s why the Association of Retired
People from Bosnia is fighting against the
government and demanding explanations about the
vanished pension funds and how to get them back.
Currently, the average pension in Bosnia is about
125 dollars per month.
Europe: European
Pension Directive Comes into Force (September 23,
2005)
After two long years of review, Europe’s pension
directive is now published in the EU’s Official
Journal and is finally being put into action. States
will have 24 months to start implementing this new
law. Some states have already notified the European
Commission saying that they will put the directive
into effect but officials like chairman Jaap Maassen
are still apprehensive. In order to benefit from this
new plan, it needs to be implemented efficiently and
properly. The implementation of this new law will be
closely monitored and will be reviewed at a meeting
next year. They will also discuss the imperfections of
the newly devised plan and make revisions accordingly.
UK: Pension Credit Plea for Unpaid Carers
(September 20, 2005)
In an effort to pull women out of poverty in
retirement, the UK Equal Opportunities Commission will
be holding a meeting next Tuesday to discuss women’s
pensions. They will talk about devising a plan to
recognize women who do not qualify for the state’s
pension plan due to having to take on care-giving
roles in their homes. Statistics show that only 16% of
women out of the whole population qualify for the
basic pension plan that the state offers.
UK: Retirement Does Not Look
Bright for Women Divorcees (September 5, 2005)
Women in the United
Kingdom face many challenges
as the government changes the pension system. Since
women have less stability in their jobs because they
take time out to care for family members, they most
often suffer the most financially. And to make it
worse, the number of divorced women over the age of 50
has dramatically increased causing the risk of poverty
for women to be even higher. The UK
pension law changed in 2000 which permits women to
benefit from their ex-husband’s pension. Many of those
who separated before 2000 missed this opportunity and
are still suffering.
UK: Women at
Risk of Retirement Poverty (August 25, 2005)
Nearly 45% of women over 50 admit that their
main income will come from their spouse’s pension,
thus risking retirement poverty in old age, UK
researchers warn. One in seven women in this age
group will be divorced by the time they retire. They
will face financial problems because of lower
pension provisions combined with the fact that many
had sacrificed their careers, and therefore their
own pension, to raise their families. UK Pension
Reform Minister, Stephen Timms “accepts” the
inequalities in the country’s pension and claims he
will work to make the system work better for women.
UK: State Second Pension Pays
More, Says FSA (August 23, 2005)
Financial Services Authority research has found that
millions of people who were led to opt-out of the
Second State Pension scheme lost money that they
could have saved had they not left the system. The
FSO has warned financial companies that they risk
facing another investigation as a result. Many
people who opted out of S2P were adversely affected
by the stock market crash after the 90’s boom. Very
few pension contributors were better off opting out.
Germany:
Chaos in German State Pensions (August 19, 2005)
With elections looming in the wings, both the
governing center-left coalition and the Conservative
opposition have avoided confronting the issue of
pension reform in their election campaigns. The
current government’s pension changes have only
covered the tip of this messy iceberg. The scheme
will run a 450 million euro deficit in September as
a result of record unemployment rates, diminishing
cash flows, and changing demographics. The German
pension system must undergo more sweeping reforms to
save it from financial collapse.
Denmark: Social Democrats
Propose Pensions Reform (August 18, 2005)
The Danish Social Democrats are proposing that the
pension system remain unreformed until 2015, when
the retirement age and early pension eligibility
would be increased by two months for 10 years. The
result would be a system whereby the age of
retirement would be 67, with early pension
eligibility starting at age 62. The Social Democrats
are also seeking legislation that would require
persons to be a contributing member of the
unemployment fund for at least 38 years. This may
potentially hurt people working in areas of
academia, who entered the labor force late because
of spending many years in school to earn their
advanced degrees.
UK: Nothing Simple About Feeling
Secure For A-Day (August 16, 2005)
The current requirement to buy an annuity with
one’s pension fund at age 75 will soon be replaced by
the Alternatively
Secured Pension. These changes will go into effect on
April 6, 2006, also known as “A-Day.” Proponents of
the new regulation claim that there will be less
chance after A-day that the pension fund will run out.
However, the income will not be as secured as it
seems. Critics argue that annuitants will only be able
to take out less than 60 percent of what they could
before the new regulation went into effect. Read this
article for more information.
UK: UK Pension Gap
‘Worse That US’ (August 16, 2005)
After extensive research, AON Consulting has
concluded that company pension plans in the UK are
four times more likely to be under funded than their
US counterparts. AON found that only five percent of
British company pension schemes were funded in full
last year, whereas twenty percent of plans were
funded in the US
. Pension deficits in the UK are also bigger
than those in the US
. AON states that some of these problems are
attributed to the fact that British employer
contributions are lower than the US
.
Russia:
Money Instead of Medicines: Almost 2.5 millions
Pensioners Refused the Social Package. Why? (August
16, 2005)
(Article in Russian)
One year ago, the pensioners were protesting against
the new policy that replaced the benefits with money,
at the moment they are refusing the benefits that the
government prepared for the elderly as a social
package. Apparently this has a reason behind it: so
far the benefits were offered at no costs, the current
ones however, will have to be deducted from the
pensioners pensions. The Ministry of Healthcare and
Social Development informed that already 2.5 million
pensioners from the Russian
Federation refused the new benefits
package. The numbers are increasing considerably and
the massive “refusal” will have negative consequences
and will annihilate the entire system of medical care
for the elderly. The people are choosing to be paid
money instead of benefits, as a result , says the
author, everyone will begin to save on the medicines
and the elder’s health will decline.
Germany:
Brsch-Supan Calls for Semi-Mandatory Pension
(August 3, 2005)
Axel
Brsch-Supan, a Mannheim University professor,
conducted a study for the German Institute for
Retirement Provision that found that Germans underestimate the time
they will spend in retirement, and more that half of all
Germans do not have enough savings to counter the
pension deficit.
Brsch-Supan is a leading pension academic, and he suggests
that the German government implement a
semi-mandatory corporate pension plan. According to
his plan, employees would be automatically enrolled
into the company’s defined pension plans unless they
opt-out. Many German pension experts support the
notion of semi-private corporate pension but neither
the Social Democrat-Green coalition nor the
Conservatives do.
Germany:
Germans Willing to Work Past Retirement (August 3,
2005)
The current rate of babies born in Germany is getting lower and lower. Thus,
Germany 's aging population
is expected to outgrow birth-rates. A majority of
elderly Germans want to work past age 60 and be
contributing members of society. This, however, is
seen as a threat by many in Germany, where unemployment rates are
high. The increase in the aging population is
changing the way Germans have to save for their
retirement. Traditional pensions alone will not
sustain the younger generations as it did their
grandparents. Experts now suggest private pension
insurance to avoid old age poverty and live comfortably
in retirement.
Denmark:
Benefits and Pensions Lag Behind (August 2,
2005)
Pensioners and unemployed benefits in Denmark
have not kept up with
inflation. They are presently 17 percent less then
worker’s wages. The result is that those receiving
pension and unemployment benefits do not have the same
purchasing power as workers in the workforce; their
money buys less and less as the years go by. This
monetary gap has led to inequality in Danish society
between those who work and those who used to work.
Russia: Retirement Age in Russia
to Go Up (July 29, 2005)
The retirement age in Russia
should gradually
be increased, states Gennady
Batanov, the head of Russian’s Pension Fund.
There is currently about one and a half people in the
work force for every pensioner. However, since working
men are leaving work earlier and pensioners are living
longer, there are not enough people in the work force
to support the pension system in future years.
UK:
Property Pensions Only For Wealthy (July 29, 2005)
Beginning in April 2006, pension savings can be
used to buy property in the UK
. The new pension rules would provide a tax break,
hence enabling people to buy property more cheaply.
The new law would also give the housing market a
boost. On the other hand, most people would not be
able to take advantage on the pension property tax
break because they do not have the means. The
government has admitted that this revision to pension
policy would not be feasible for everyone, only those
with large pensions. Therefore, while the well-to-do
get a tax break that they do not need, those who would
benefit most from it will be locked out of the deal.
Germany:
Deficit Looms for German
State Pension Scheme (July 26, 2005)
Germany will face a pension scheme
deficit for the first time in two decades this
September. High
unemployment rates have left the pension scheme
bereft of adequate funds for pensioners. Therefore German reserves have emptied to
offset the difference. With 11 percent of the
German population without work, the pension scheme
cannot generate enough revenue on its own. Germany's
chief pension adviser, Professor Bert Rürup, asserts
that a higher retirement age is Germany's only way
out of the 450 million euro pension deficit.
Spain: Social
Security to Post Deficit in 2015 Without Pension
Reform (July 22, 2005)
Spanish lawmakers are realizing that
their Social Security system needs reform in order to
prevent running a deficit by the year 2015. Spain's pension program has traditionally
had a surplus that the government was able to use,
but by the year 2015, there will be a 625 million
euro shortage after benefits are distributed to
pensioners. Labor and Social Affairs Minister Jesús
Caldera reassured the public that the pension system
will not be drastically changed and that the
retirement age will remain the same. Widow’s
pensions, however, will see big changes. The rules,
argues Caldera, are antiquated and need to be
modernized. Legislated at a time when Spanish
society frowned on “working” women and divorce was
illegal, these benefits must change now!
Cyprus: For the Health of
the Pensioners and Unemployed (July 22,
2005)
(Article in Russian)
The Committee for the International Federation for
Labor’s General Secretary, Pambis Kiritsis, met with
the Minister of Healthcare, Andreas Gavriilidis, to
discuss the problems regarding the health of the
pensioners and the workers. The main problems that
that require immediate attention were: difficulties
and problems that the pensioners encounter in the
healthcare system, the criteria for pensioners
qualified for health services outside of the
country, and financial support for the state
hospitals. In addition, they reviewed questions
regarding the medical care for the unemployed and
the requirements for the medical employees in the
private healthcare sector. However, the political
responsibility belongs to the government. The
International Federation for Labor is waiting for
the government to adopt a proposed law for a general
healthcare plan.
Russia: Salaries and Pensions
Will Be Increased.
Holding Down Inflation Still Remains
(July 21, 2005)
(Article in Russian)
Russian pensioners needed higher pensions and
welcomed them. Unfortunately, the small adjustment
of the pensions did not match the actual expenses
and living costs of the elderly, says the
analyst Irina Tsurina. The sad news: The cost
of gas will rise again, exactly when the farmers
are harvesting their crops and using much fuel. While
the government proudly announces an increase in
the pensions, not a single pensioner has a better
standard of living due to inflation.
Czech
Republic: A Taxing Issue (July 20, 2005)
There are fewer and fewer people to pay for
pay-as-you-go pension system in the
Czech
Republic.This is a growing
problem that, if not addressed, will leave future
pensioners without a pension to live on. The two
political parties have two differing views on how
the transformation of the pension system should
take place. The ruling Social Democrats support
private accounts so that the people can control
their own money while the opposing Civic Democratic Party wants
a flat rate pension so that, rich or poor,
everyone gets the same pension. With
elections looming around the corner, politicians
want to be careful when planning pension reforms
that will be widely unpopular with the general
public. In other words, they are playing politics
and will not complete reform details until after
the election.
Russia: A Third of Pensioners
From Voronej Are Starving (July 19, 2005)
(Article in Russian)
256,500 pensioners will have to wait until the
year of 2008, before their pensions reaches the
minimum standard of living. The forthcoming
increase of the pensions on August 1st will barely
cover the losses from inflation, because according
to the official statistics the increase equals the
exact percentage of the inflation. Therefore the
increase itself of the pensions is not real, it’s
only an adjustment. More than 256,000 pensioners
(one third of the total pensioner population in
the Voronej region), receive less than the
“official” minimum. Officials say that there is no
hope for a better change earlier than 2008.
Czech Republic: October Deadline Set for
Pension Reform (July 18, 2005)
Czech politicians are preparing
for discussions concerning the pension system.
Although the pension problem is not urgent right now,
it has the potential of becoming a disaster in 60
years. The over 60 population presently constitutes
only one-fifth of the Czech population. But in just
over a half century that number will rise to one-third
of the population leading to more people receiving
pension benefits than those paying into it. There are
five different party proposals to consider. Should the
government increase the amount of GPD allotted to
pensions? Should the retirement age be increased?
Should benefits be slashed? How will pension changes
affect the future older citizens of the Czech
Republic
? We should have some
idea by November 2005.
UK: IoD Calls for Retirement at 70
(July 17, 2005)
The Pensions Commission is currently considering
proposals from organizations and think tanks
concerning the current state pension scheme. One such
group called the Institute of Directors
, or IoD, recommends an increase in the retirement age
from 65 to 70. This has been met with strong
opposition from the People’s Pension Coalition, which
seeks to keep the retirement age status quo. The
Pensions Protection Fund’s proposal calls for
financial penalties for companies not fully funding
their pension plans.
UK: End
This Obscene Pension Uplift (July 13, 2005)
There has been an outcry in Wales
over pension benefits. Workers
are condemning the unfair use of public funds to
give certain council workers more years of pension
contributions that they did not earn, especially
now, during a pension crisis. While ordinary
workers must earn their pension, special consideration
is given to particular council workers who are given
extra pension money as a fringe benefit. The Caerphilly Council argues that that
only those with extraordinary circumstances get added
years of pension pay as a reward. Because the giveaway
is cloaked in secrecy, the public does not know the
full extent of the giveaway.
Russia: The Government Underpays
the Pensioners of the Military the Amount of 1200
Rubles (July 13, 2005)
The retirees from the military are not getting their
pensions increased. Despite the fact that the Court of
Law stated that the benefits for the militaries should
be paid, the government refused to do so. The year of
2003 was the last year when the pensioners saw a
benefit increase. Since then, inflation increased by
20%. According to the pension formula index, which is
based on 20 rubles but in fact is 60 rubles, the
government is underpaying each pensioner by 1200
rubles. According to the government representative,
there will be no room for improvement in 2006 and
veterans will continue to get the low payout.
Russia: Pensions From the Gain on
the Oil Barrel (July 12, 2005)
(Article in Russian)
The Minister of Social Development and Healthcare
announced at a meeting with the Russian President that
pensions will increase beginning in August. It looks
like the government decided to keep its promise to
raise the pensions. Apparently there is no fear of
inflation that the Ministry of Finance predicted. The funds
will come from the federal budget and the stable fund
which grew due to high oil prices. Earlier, one vice
president announced that the government will also
address the government workers’ salaries. Healthcare
employees, teachers, social workers, and other
employees from the non-corporate world will have to
rely on their local administrations. Furthermore,
according to official statistics, the local
administrations do not give a priority to increasing
pensions.
UK: Older
Women the Victims in Pension Form Fiasco (July 10,
2005)
If you have divorced since 2000 and are
expecting a share of your husband’s pension, guess
again. Many United Kingdom
lawyers are making mistakes on the pension information forms
costing divorces a share of their ex-husbands’
pension. As it so happens, these mistakes most often
affect women. Although the Department of
Constitutional Affairs has said it would change the
forms to prevent more mistakes from happening,
nothing has been done yet.
Russia: Give the Marine Veterans
What They Deserve! (July 8, 2005)
(Article in Russian)
The Marine Veterans have to struggle continuously
with the Pension Fund to get their funds. Members of
the Russian Marine worked their entire lives in the
severe climate of the Greater Arctic Ocean yet they
get no benefits for working in such a harsh and
hazardous environment. After long years of dispute
with no results, the veterans decided to sue the
Pension Fund and also write to the Russian president.
Why do Russian sailors have to implore the government
to get what they deserve?
Russia: The Pension “Hole” – The
Government Is Hoping to Suppress It Without
Increasing the Retirement Age Yet (July 8, 2005)
The Russian Federation has a “The Hole” in its Pension
Fund, due to a decrease of the only existing social
tax. The pension system faces a paradox: on one hand
there are no funds to cover the current pension
payments; on the other hand, the government doesn’t
know where to put its money safely. Much discussion
focuses on the fund deficit. However the other issue
targets the two percent pension fees that are
collected for future accumulations of the pensions to
be paid. So far, investment earnings on pension monies
have been less than inflation. Some companies show
even more on the investment principal. Apparently, the
new pension “reform” cannot insure the preservation of
the accumulation funds—nor can it manage to gain on
their investments. These are the two main problems
that the government is trying to find the solution for
at the moment.
Russia, Primorie Region: The
Administration of the Facilities for Veterans-
Violating Elder Rights (July 7, 2005)
(Article in Russian)
On behalf of 17 pensioners, prosecutors from
different cities and districts in the Primorie Region
sued the elderly facilities that were charging
illegally the elderly who lived there. According to
the Office of Public Prosecutors, the facilities
collected money from both the retirement pension and
the disability pension accounts. According to the law,
the amount of the monthly cost for using the veterans’
facilities cannot exceed 75% of the total amount of
one pension received by the pensioners.
UK: Pensions Boss Warns We Will
Have to Work Longer (July 4, 2005)
The British are simply going to have to work
longer, declares Adair Turner. The UK government hired
Turner to find ways to fill in the £27 billion
pension’s savings gap. The government will implement
a mix of higher taxes, higher retirement age, and
more personal saving in order to fix the pension
system, all of which spells trouble for
current older citizens in Britain.
Latvia:
July 1st Is the “Black Day” For the Pensioners
(June 30, 2005)
(Article in Russian)
Starting July 1st, the costs for pensioners for any
type of healthcare services will go up. At the last
meeting of the Social Services Committee, the
majority of the members voted to end benefits for
the elderly that allowed for the pensioners to have
free access to healthcare, including appointments
with the doctors. The members of the committee
explained that this change occurred due to the lack
of funds in the local budget. From now on the city
council instead of paying for sixteen days of
hospitalization will only pay for five. Therefore
the expense for one pensioner will decrease from 80
lats to 25, making a considerable difference. Many
pensioners already have “saved” on their health.
Daily, doctors must treat the elderly who arrive
after a sickness has advanced because pensions do
not allow them to ask for medical assistance when it
is first needed. Is this a way to assure that old
people die earlier?
UK: The
Pensions House of Cards (June 25, 2005)
Starting with next April 6, 2006, the UK
Government will allow residential property to be held
within self-invested personal pensions (Sipps).
However, Lord Oakeshott of Seagrove
Bay, the
Liberal Democrat spokesman on work and pensions,
says that the plans will promote tax avoidance and
should be canceled. The proposal to allow pension
funds to invest in residential property means that a
basic-rate taxpayer would be able to purchase a
£200,000 home within a Sipp for just £156,000, with
the Government paying the rest. Despite enthusiasm
for these pension changes among the public, advisers
and even Sipp administrators remain skeptical. One
reason is that investors may put too much money into
property, placing their pension funds in danger in
case the housing market crashes.
Russia: The
Lawsuit of the Pensioner Lydya Pravednaia (June
22, 2005)
(Article
in Russian)
The pension story in the Russian Federation
began February 1, 1998, with a new law on pensions in
Russia . The
Government assigned every pensioner an individual
coefficient based on previous work experience and
salary. The average salary in the country multiplied
by the individual coefficient resulted in the pension
amount the retirees were supposed to receive. Due to
flaws in the law, the government employees ended up
paying less to pensioners. Thousands of pensioners
filed complaints and sued the government. Most cases
were successful. After many unsuccessful attempts to
get the money the government owed to her, Lydya
Pravednaya from Novosibirsk ,
decided to seek justice at European Commission for
Human Rights in Strasburg. Lydya Pravednaya won the
case but since the amount that the government owed her
were never specified, the battle continues.
Serbia: Serbs Plead With Govt Not to Push Pension
Reforms (June 21, 2005)
The Serbian government seeks to cut Serbian
pensions another 20% by 2009.
Pensioners worry that they must bear the consequences
of reforms being made for future Serbian membership in
the European Union. The state argues that although
pensioners have paid into the pension system, the
state itself has had to subsidize the pension system
because many companies default on payments.
Nevertheless, analysts contend that in order for these
budget cuts to do any good, the entire Serbian economy
must be reformed. On the backs of the elderly?
Russia: Will We Make It to the
Retirement? Or One More Time About the Increasing
of the Retirement Age (June 20, 2005)
(Article
in Russian)
Currently Russia
is the only country in the world where the retirement
age for men is higher than their average life
expectancy. Aside from this fact, politicians are
beginning to realize that pension reform was
incorrectly planned. Today the main question centers
on where to get the money for pensions. Workers don’t
want to accept the new plan of making contributions to
the Pensions Funds directly from their salaries. No
Western European country, neither USA nor Canada , made such a
radical decision to move from a state funded pension
to a mandatory contributory system as Russia
now plans. If a contributory
pension system is abandoned then the workers must have
the chance to save money for retirement.
UK: Pension Reforms "Spark Job Fears” (June 16,
2005)
The British Chamber of Commerce (BCC) survey
found that one in five firms will cut jobs if they are
forced to pay into pensions for their employees. The
survey covered 800 businesses and it also said over a
third of the firms would have to freeze wage increases
to fund compulsory payments. An estimated 12 million
people are not saving enough for their retirement. In
its report last year, the Pensions Commission said
that a combination of higher taxes, higher savings
and/or a higher-average retirement age was needed,
however the BCC claims its survey showed that forcing
firms to pay could cost jobs.
Ukraine:
Party of Pensioners of Ukraine Demands Freezing
Municipal Services Rates (June 8, 2005)
(Article in Russian)
The Pensioners Party of Ukraine believes that the
increase in prices for Russian gas as was recently
announced will definitely lead to increases in
municipal services rates (such as electricity, gas and
water supply, and other house utilities). Therefore,
they appealed to the President of Ukraine with the
demand to freeze municipal service rates.
France: A
Lobby for the Seniors (June2005)
(Article in French)
The FIDES (Federation Interregional for Development
and Employment of the Seniors), a recently created
advocacy group, wants to influence French policy to
stimulate the employment of older persons. Its main
goal is to change society’s vision about older
employees.
Russia:
Work Longer, Die Earlier (May 19, 2005)
(Article in Russian)
Ghenadii Batanov, Chairman of the Pension Fund of the
Russian Federation, announced insufficient funds to
pay projected pension payments for 2005. The budget
can cover the deficit as long as the price of the oil
stays high and providing there are no other shortages
in the treasury funds. It’s likely that the Russian Federation
retirement age limit will soon
become a reality. “The deficit in the budget of the
Pension Fund in the Russian Federation
will become even bigger if the allowance for the
pensioners will be increased,” said Gh. Batanov.
Nobody will name the actual figures for the existing
deficit, since this is “highly confidential
information.” However, it is known that the present
deficit has hit its highest level for the last 5-7
years,” Batanov explained. Pension Fund monies are
invested in very limited Russian bonds, stocks, etc.,
and the return is extremely low. Russian President V.
Putin’s ambitious plan to double the pensions for the
entire country by the end of the year 2008 now seems
unrealistic. In order to accomplish this goal the
government will have to either introduce a new tax or
increase the retirement age limit. However, neither
option will benefit the older population.
UK: Expats to Have Pensions
Frozen (June 1, 2005)
The United Kingdom’s House of Lords adopted a
new policy of reducing payments for the UK
pensioners. Under existing legislation, UK
pensioners who move abroad to certain countries have
their pensions “frozen”, resulting in pensions that
stay the same and no longer will increase with
inflation. The Australian government labeled this
practice as “unfair and discriminatory”. “British
Pensions”, an organization and advocacy group located
in Australia
, encourages Australian citizens who have worked in
the UK
and paid to the UK
’s National Insurance system to respond to this
“discriminatory” policy.
Russia: Installation of Telephones
to Veterans is Completed in Orenburg Region (May
30, 2005)
(Article in Russian)
Recently the Orenburg
regional social security office installed telephones
into houses of WW2 veterans. Nevertheless, it’s
appropriate to note that all aged people need
telephones --not only veterans. Many elders,
due to objective reasons, did not participate in WW2
and not therefore ineligible for a necessity such as
a telephone.
Germany:
Former Nazi Ghetto Workers Get Cheated – Again
(May 28, 2005)
According to German law, Jewish survivors who
worked in the ghetto are entitled to a German pension.
But most requests have been refused so far - in some
cases on absurd grounds. Will the last survivors get
their due from the German government?
UK:
Professionals Face Higher State Retirement Age
(May 23, 2005)
Will the United Kingdom establish different
retirement ages for working class and professional
workers that account for the current 4 year difference
in their life expectancies? Seeing a political
hot-potato, Tony Blair wants to delay discussion until
after the next general election. Critics point to the
current “means-tested mess of a pensions system” that
is sustaining the current crisis.
Estonia: Minister of Social
Affairs: We are Indebted to Pensioners (May 12,
2005)
(Article in Russian)
The State of Estonia State owes its pensioners
because the low pension benefits allow the State to
spend money in other spheres for unsuccessful
ventures, ” said Yak Aab, the minister of Social
Affairs. He also underlined the ruling coalition’s
important legislative proposals about pension growth.
According to these proposals, the 2005 pension will
increase by 434 kronas and in the first half of 2006
by 282 kronas.
France: The Debate on the
Pensions of Foreign Veterans is Reappearing (May
7, 2005)
(Article in French)
Like Tahar Saim, 700,000 foreign veterans who fought
for France
have today a very insufficient pension. Indeed, with
only 57 euros per year, this Algerian pensioner still
must crusade for a pension equal to the one of the
French veterans who receive 427 euros per year. Having
justified this inequity on the basis of different
standards of living in the countries, the French
Government must now think seriously about this huge
injustice. The longer the Government delays, the more
likely the aged veterans will die.
UK: Women Still
Snared in the Pension Trap (May 5, 2005)
Age Concern states that one in four women
will be in poverty at old age. The Equal
Opportunities Commission (EOC) “argues that
discrimination against women is inherent in our
pension system and therefore it must be replaced by
one that works for women as well as men.” Because
women usually take career breaks to care of children
and/or other family members, they do not get the
chance to build up their pensions for retirement; in
addition to that, their salary level is well below
men’s making it difficult to have invest money for
retirement. Many changes have been proposed in order
to treat women better than the small amounts they
receive now. But will they be adopted?
Azerbaijan: Pensioners are
Facing Poverty (April 29, 2005)
(Article in Russian)
“I buy bones meant for dogs, boil them, and then make
soup, just to get the taste of meat,” says a pensioner
in Azerbaijan. Despite recent raises in pensions, the
majority of almost 1.3 million pensioners still live
well below the poverty line. A sharp increase in gas
and electricity has taken nearly all their pensions.
Now older people have to depend on their relatives’
ability to provide for them. Most pensioners forgot
about medical services and treatment long ago. They
even forgot about eating a healthy diet. The elderly
who do not receive any additional compensation, such
as payment for being disabled or forcefully displaced
in times of war, feel especially impoverished. Many
choose to work in order to avoid misery. But this
seems hardly a solution: working pensioners receive
only half the compensation package they are normally
entitled to. It is sad that after 40 or more years of
work, pensioners are forced into this “social
injustice.” And it is especially disturbing,
considering that many economists of the country
contend that the current government is quite capable
of resolving the issue.
Russia: Pensions of Russian Elders Allow Them to
Buy Only Food (April 24, 2005)
(Article in Russian)
According to the survey conducted by “Social Opinion”
foundation, Russian pensioners have money only for
food and partially for housing payment. Answering the
question, “what can you buy on the pension?” 80% of
elders answered - “only food products”, while 61% said
“enough to pay for housing services.”
Russia: Pension Reform Must be
Started Again (April 20, 2005)
(Article in Russian)
Pension reform in Russia
had two aims. First, to solve the fundamental issue of
population aging, and, second, to pool long-term
financial resources to invest in the Russian economy.
For different reasons, these problems were left
unsolved, and new ones appeared. Therefore, there is
now a strong need to embark on another pension reform
effort, one that will lead to real and meaningful
results.
UK: UK Workers Without A Pension
Reach 12.7m (April 11, 2005)
Citizens face a real crisis in the UK
pension system, above all since they saw Labour put
in a partial privatization. The proportion of
working adults with no provision for retirement rose
to 45 per cent in 2003-04. Almost 13 million people
will have to live only with the minimal state
pension. If we also take a look at several financial
scandals in the private sector, we can say that
Briton’s elderly face a tough “patch,” perhaps
lasting until they die.
Latvia: To Die or not to Die?
(April 7, 2005)
(Article in Russian)
Latvian elders are expecting a new blow after the
“reform” of the health care system. Starting from July
1, 2005, the citizens of Latvia
are not allowed to go on pension
before the official pension age. The attempts of the
political opposition and trade unions to prolong the
currently existing law that allows retirement before
the official pension age were not successful. Sejm
commission representative A. Klementiev believes that
indigent citizens will suffer most.
UK: Blair Has Pensions Bill
Ready (March 31, 2005)
Britain’s pension crisis
will be a substantial part of Prime Minister Tony
Blair’s agenda. The prime minister’s last term will
be dedicated to a slough of legislative reforms
which will include a conscientious effort to smooth
out the crinkles of
Britain
’s problematic pension plan. Taxpayers may fund the
shortage of £57bn in pensioners’ funds as Britain
’s life expectancy has increased while
savings and investments for retirement have not.
Russia:
Will Pensioners be Eliminated as a Class? (March
26, 2005)
(Article in Russian)
World Bank experts strongly recommended to the Russian
government to increase the retirement age of Russian
citizens. In the report, “The expenses of structural
reforms in Russia
,” they emphasized that without additional reforms the
current system of pension security would not be able
to bridge the gap between wage growth and pension
levels leading to economic catastrophe. However, the
author of the article thinks that increasing the
retirement age would be inhumane way to solve the
issue. One of A majority of older workers would be
dead before retirement age; Russian men now live only
until 59 years old. Women who die at 73, on average,
would have only a few years free from the workplace.
Surely there are other ways to approach this issue!
Let’s look at the World Bank’s retirement policies for
its workers and professionals as a first step!
Ukraine: Deputies Confirmed the
"Budget of Timoshenko" (March 25, 2005)
(Article in Russian)
Verhovna Rada of Ukraine has voted for the project of
law "On bringing changes in Law of Ukraine to the
state budget of Ukraine for 2005 year". Practically
all the deputies consider this a great success in the
social part of budget. The minimum pension will grow
from 295 gryvnas to 332 gryvnas. An average pension
will go up to 383 gryvnas, while now it is only 315
gryvnas.
France: Douste: The Easter
Monday Day of Solidarity Won’t Produce Enough
Funds to Support Elderly (March 17, 2005)
(Article in French)
Philippe Douste-Blazy, the French Health Minister,
said recently that the Easter Monday day of work for
solidarity won’t produce enough revenues to support
dependent elders in France due to the increase in life
expectancy.
UK: Britain and Chile,
Lessons for Revamping Social Security (March 14,
2005)
As the US weighs partially privatizing Social
Security, other countries have lived under similar
systems for decades. US citizens can learn from them
that the system talked up by Bush is not a great idea
to resolve any pension problems. Compared to the
current Social Security system, it’s even a real
disaster.
UK: Pensions Panic: Any Way Out?
(March 11, 2005)
With Britain
in the grip of an increasing panic about pensions,
politicians and policymakers are desperate for a way
to avert a long-term meltdown.
At £79.60 a week,
Britain's state pension is one of the lowest in the
developed world. Could privatization of their social
insurance account for this?
Russia: Peterburg Pension
Funds are Waiting for Help (March 3, 2005)
(Article in Russian)
Pensioners have to overcome many bureaucratic
procedures that the Pension Fund imposes that makes
their lives very complicated. For instance,
pensioners must register for the new pension
conversion. But they face long lines – some
pensioners arrive at 3 AM in order to have a chance
to get served in the office before closing time.
They also find offices without air conditioners and
other facilities along the long corridors to make
the wait more comfortable. In fact, an old man died
out of heart attack just in front of the door after
standing many hours in line to get his pension
certificate.
France: French Are Met With
Old Age (February 28, 2005)
(Article
in French)
French
society doesn’t seem ready to cope with the increasing
number of older persons. Two years after the scorching
heat that killed many older persons in France
, there’s more and more worry
about old age, according to a poll done by the Sofres
for the Hospital Federation of France, and published
by the Express. But worry must translate into action.
Ukraine: Minister of Labor and
Social Policy Promises Help on Child Birth and New
Life for Pensioners Starting from April 1.
(February 25, 2005)
(Article in Russian)
Vayacheslav Kirilenko, the Minister of Labor and
Social Policy, says that: “pensions will not be lower
than the living-wage and this living-wage will be
defined each four months ensuring the defense of
pensions from inflation.” From April 1 the pension
will be differentiated for the 5 million most
vulnerable elders: the disabled, war veterans, and
people who live in difficult conditions. During the
second part of 2005, pensions will be differentiated
for the remaining 8 million pensioners.
Ukraine: Ukrainian Reality:
Pensioners- Millionaires! (February 18, 2005)
(Article in Russian)
As it has turned out, pensioner-millionaires have
begun to emerge in Ukraine
. New millionaires join this list every day. The
Ex-president and ex-government officials are among the
richest pensioners.
The Pension Fund stated that it had nothing to do with
those pensions since they are paid from the State
budget. Nikolay Tomenko, vice prime minister,
considers these “elite” pensions to be a serious
problem and says that the new government will have
time to address this issue.
Norway: Norwegian Central
Bank Calls for Pension Changes (February 18, 2005)
Because of lower than expected tax revenues
over the last few years, but also because of
unemployment, the governor of the Norwegian central
bank, Svein Gjedrem, wants to change the pension
system. Here is a difficult and awkward thing to do.:
a lot of Norwegians survive thanks to social security
incomes, such as disability pensions or early
retirement.
Sweden: Sweden's Take on
Private Pensions (February 12, 2005)
Sweden
seems to be a good example of how introducing
private accounts to finance pensions is difficult.
Since the introduction of this new system,
everything has become very complicated. Older
persons are exposed to a risky situation, and very
often they are anxious without guaranteed benefits
of Social Security. They do not feel comfortable
with managing their retirement money. Other
countries, such as
Britain , Chile , and Poland know the
same difficulties than Sweden , and all
these models offer important lessons for the United States
.
France:
How Do We See the Retirement? (February 8,
2005)
(Article in French)
It's interesting to see how the French perceive their
retirement: what are the desires and priorities that
they take into account. We learn that the favorite age
to retire is 55. The first concern is to stay
independent in case of illness.
France: French Estimate that
1586 Euros Are the Necessary Income for the Needs
of a Retired Menage (February 8, 2005)
(Article in French)
A study done by GFK for Axe says that French people
save less money for their pension than the inhabitants
of other European countries, and two times less than
Americans and Australians.
Russia: February Without
Revolution (February 4, 2005)
(Article in Russian)
The replacement of services for older persons with
money allowances has put the authorities into the
classical Marxist situation as follows: "the lower
sections of society do not want, and the upper crust
cannot." Is a new February revolution possible in Russia
? The authors of the article
draw some conclusion after three weeks of protest
actions. The pensioners gained an increment in
pensions. It was planned to increase its basic part by
12 percent in 2005, which was to be implemented in two
stages - on April 1and August 1. Now this increase
will take place on March 1 and would amount to 36.5
per cent. The average basic pension will increase from
600 to 900 roubles a month. The increment will amount
from 225 to 1,200 roubles a month, depending on the
category of a pensioner. Another concession involves
senior tickets from February 1 or March 1 in the
regions. But can the pension allowance buy what was
previously free-health, transport, housing, etc.? What
will the Russian elderly settle for? Their lives are
at stake.
Russia: President of Bashkiria
Republic Supports the Protests Against
Monetization of Benefits.(January 29, 2005)
(Article in Russian)
Many protest meetings took place in reaction to
the monetization of benefits in Bashkiria Republic as elsewhere in
Russia .
Murtaza Rahimov, the President of Bashkiria,
demonstrated his support of such actions and protests
calling them a "natural reaction." He says that a
different approach must be taken to determine the
compensation level to different categories of elderly
and disabled people who formerly had public benefits
such as free health care, transportation and
housing.
Russia:
Thousands of Retirees Protest Russian Pension
Cutbacks (January 16, 2005)
A thousand retired people tried to block the
road to a Moscow airport Saturday as 10,000 others
jammed the avenues in President Vladimir Putin's
hometown of St. Petersburg to voice their anger over a
law that stripped them of some key welfare benefits.
It was the largest show of discontent since the
Kremlin leader took power nearly five years ago.
Russia: Thousands in Russia Protest End to
Soviet-Era Pension Rights (January 15, 2005)
Thousands of Russian pensioners took to the
streets of Saint Petersburg, Moscow and elsewhere to
protest withdrawal of Soviet-era benefits, denouncing
what they called Vladimir Putin's "criminal" reforms.
Replacing free transport, health care and housing are
small checks to allow older people to purchase these
key items. A war on old people?
Ukraine: Where to get 12
mild. For Pensioners? (January 12, 2005)
(Article in Russian)
Pavel Gaidytcky, the head of the Department of
Economic Planning says the new Ukraine
government must find 12
milliards Hr. to make the country's law "On obligatory
state retirement insurance " a reality. This law also
establishes an additional payment - 1% each year of
extra work. Gaidytcky underlined that the law does not
say anything about where to get money to put this law
into effect.
Georgia: Arrears of Pensions is 18$ in Georgia
(January 6, 2005)
(Article in Russian)
Georgia
has something to be proud of! The Georgia Social
Insurance Fund during the first part of this year is
planning to pay off pension debts which are currently
more than 35 mil. Lari (around $18 million.) Up until
2004, the total amount of pension arrears was 130 mil.
Lari (around $75 million.) During last year the Fund
was able to pay out 95 mil Lari (more than $50
million.)
Russia, Chechnya: The
Government of Chechnya has Determined Living-Wage
(January 6, 2005)
(Article in Russian)
"What am I supposed to do with these 300
roubles?" A 67 year old citizen of Groznuy, the
capital of Chechnya
, is among many other people frustrated over the
obviously insufficient amount of money compensation
for previously free public services. He calls it a
mockery and humiliation upon people. "Initially the
amount of compensations was set to be 550 roubles but
the ministry of finance has cut this sum to 300
roubles per month,"says an official of Chechnya
ministry of labor and social
development. Misery ahead!
Ukraine: Government has
Given 2 milliard Hrivnas to Pension Fund (January
6, 2005)
(Article in Russian)
Nikolai Azarov, currently acting as Prime
Minister, says that the government has given 2
milliard Hrivnas so that the Pension Fund could pay
out pensions. At a ministry cabinet session, Azarov
also underlined that the government had sufficient
resources to finance all social payments in January.
He did not speak to the remaining months of the year.
Return to Top of Page
Middle East
Yemen: Woman and
the Age of Retirement (December 17, 2005)
(Article
in Arabic)
Retirement age is a very critical issue.
Many people in the Arab world fear it. It makes
them feel hopeless, worried that their roles in
life have ended.
It is particularly difficult to face when
workers know that they are still able to perform
their duties as they have done in the past. In Yemen
, becoming a retiree is considered as a
nightmare, especially for women who retire at
the age of 55 (5 years before men). The
retirement laws applied in this society do not
favor women.
Many women have had little access to
education in their early life and they are
likely to live longer than men. They
need to have access to paid work.
Qatar:
Banker Stresses Need for Global Pension Reform
(November 13, 2005)
(Article
in Arabic)
At a meeting organized by financial services giant,
ING, and the Doha Bank, the general manager of Doha
Bank, R. Seetharaman, urged a global reform of
pension funds and the reform of the distribution of
funds so that retirees can receive maximum returns.
He said that in order for changes to benefit
society, several areas need to be revised.
Seetharaman suggests a private sector management of
pension funds where the economic objectives will
determine investment strategies instead of political
objectives which often can not be relied on for best
distribution of capital and highest returns on
savings. He stresses that “it is extremely important
to understand and realign the social benefits
towards self sustaining models, reducing the stain
on State.”
Algeria: Retiree’s
Purchasing Power Is Diminishing (November 1, 2005)
(Article in French)
“Like active workers,
retirees’ purchasing power is decreasing,” says
Mr. Azzi, general secretary of the Algerian
Federation of Retirees. Reasons for this decline
include the fact that some older people are giving
financial help to their unemployed adult children
however taxes remain the same as active workers.
According to the federation, the balanced national
pension fund will allow the creation of a minimum
guaranteed pension for thoses who paid into the
system only for the period of 15 years.
MENA
Region: New World Bank Report on Pension in
the Middle East and North Africa Region
Suggests Changes (August 25,
2005)
(Article
in Arabic)
According to the World Bank report on pension
systems in the Middle East and North Africa
region, only 5% to 10% of elders in this region
get a pension. The report claims that this pension is very generous. Most
countries mentioned in the report follow a
pension system that was created in late 60’s and
early 70’s. The report tries to show that these
countries offer large pensions to a small number
of elders. However, with increased numbers of
older people living longer, it is necessary to
make changes that will offer pensions to more
persons.
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.
Kuwait: Prime
Minister of Kuwait Opens a New Building for
the Association of Social Affairs and Social
Security (May 1, 2005)
(Article
in Arabic)
Sheikh Sabah
al-Ahmad, the prime minister of Kuwait, has
launched the new building for the association of
social affairs/social security benefits, on
behalf of the prince.
Sheikh al-Sabah said that the country has tried
really hard, since the fifties, to establish a
good system for social security to secure
people’s financial well being especially the
retired, the elderly, the physically challenged
or for families of the dead benefactor. The
prime Minister has said that social security is
indeed based on Islamic merciful teachings, the
sayings of the prophet Muhammad and the morals
and customs of the Kuwaiti citizens. The
government, according to Sheikh Sabah al-Ahmad,
has worked really hard for thirty years, to
secure social benefits for those categories of
people. The system also includes all other
categories of people (civil servants, military
people, blue collar individuals, and also those
who run their own businesses). This aims at the
promotion of social justice morals and
principles that should include all individuals.
Iraq:
New Increases in the Salaries of State-Workers
and Pensioners in Iraq (March 7, 2005)
(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.
Egypt: Pension Apprehension: Lawmakers Want Worker
Pensions to Pay Down Government Debt (August 5,
2005)
The
Nazif administration has added LE600 million to
the Social Insurance Fund budget, which will raise
the poorest Egyptian’s pension by LE20. More than
half a million families will be helped by this
move. However, critics contend that the entire
Egyptian pension scheme needs serious reform in
order for pensioners to be lifted out of poverty.
Lawmakers in Egypt
are currently taking money out of the LE174
billion pension fund to relieve government debt.
As a result, many Egyptians who have paid into the
government pension system receive substantially
lower benefits than they are owed. Now many
Egyptians are refusing to contribute to the
government pension scheme. Is this a sign of the
beginning of the end of the Egyptian pension
system?
Lebanon: World Bank Study Decries
Lebanon
Pension System (July 11, 2005)
The World Bank recently
criticized Lebanon
’s pension system, calling it insufficient and
inefficient. Lebanon
’s pension program covers only 26 percent of the
population, and the main problem exists in the
private sector. Workers get a lump sum pension
instead of monthly payments and are sometimes left
abandoned when companies do not have the funds to
pay out pension fees. Although the Cabinet approved
new pension reform legislation, the Parliament did
not approve it. Possible remedies for this problem
include a cut in public spending, higher taxes, and
a slight decrease in worker benefits. While there
are built-in dangers in the pension system, the
Lebanese government also faces many difficulties in
increasing taxes and cutting other citizen benefits
while the country is in an unstable condition.
Israel, Knesset: The Fight
for Returning the Pensions for Israeli
Repatriates, Now at the Governmental Level (June
15, 2005)
(Article in Russian)
The Knesset Commission on absorption voted to create a
subcommittee that would re-establish social and
retirement rights of elderly repatriates. Its initiator,
the deputy Roman Bronfman, who is also the person in
charge for re-establishing the pensions for repatriates
from the former Soviet Union countries heads the
subcommittee. This action moves the issue to a higher
juridical and official level. Many believe that the
chances are good for new citizens to get their pension
accumulations from the Former Soviet Union countries.
Middle
East: Demographic Data on Middle East Aging
Populations
While the current elderly populations make up about
5% of many Middle East
countries, there will be substantial change over the next
45 to 50 years. By 2050, about one-quarter of the
population will be over 60 years in Bahrain , Kuwait , Lebanon , Tunisia , and the United Arab
Emirates .
Azerbaijan: Pension Reforms Are
Carrying Out In Azerbaijan (April 16, 2005)
(Article in Russian)
Salim Muslimov, Chairperson of the Social Security State
Fund reported on the preparation of a legislative bill
to create a new pension system in Azerbaijan. Some
1,336, 729 pensioners are looking forward to
establishing social justice in the country.
Israel: Old Age Pensions to Fall
15-20% (April 13, 2005)
In Israel, the Ministry of Finance’s capital
markets, insurance and savings division, plans to reduce
pensions for the third time in three years. The
reduction comes following a revision of actuarial
assumptions that govern pension payout.
Qatar: Adjustment in Pension
(May 8, 2005)
(Article in Arabic)
The number of older persons is increasing in Qatar.
The Al Doha Global Assembly on Aging discussed this
issue, particularly how elderly can be involved in
national development programs and how their experience
can be used to reduce the costs of the society.
Kuwait: Prime Minister of Kuwait
Opens a New Building for the Association of Social
Affairs and Social Security (May 1, 2005)
(Article in
Arabic)
Sheikh Sabah al-Ahmad, the
Prime Minister of Kuwait, has launched the new
building for the association of social affairs/social
security benefits, on behalf of the prince. Sheikh
al-Sabah said that the country has tried really hard,
since the fifties, to establish a good system for
social security to secure people’s financial well
being especially the retired, the elderly, the
physically challenged or for families of the dead
benefactor. The Prime Minister has said that social
security is indeed based on Islamic merciful
teachings, the sayings of the prophet Muhammad and the
morals and customs of the Kuwaiti citizens. The
government, according to Sheikh Sabah al-Ahmad, has
worked really hard for thirty years, to secure social
benefits for those categories of people. The system
also includes all other categories of people (civil
servants, military people, blue collar individuals,
and also those who run their own businesses). This
aims at the promotion of social justice morals and
principles that should include all individuals.
Azerbaijan: Pension Reforms Are
Carrying Out In Azerbaijan (April 16, 2005)
(Article in Russian)
Salim Muslimov, Chairperson of the Social Security
State Fund reported on the preparation of a
legislative bill to create a new pension system in
Azerbaijan. Some
1,336, 729 pensioners are looking forward to
establishing social justice in the country.
Israel: Old Age Pensions to Fall
15-20% (April 13, 2005)
In Israel, the Ministry of Finance’s capital
markets, insurance and savings division, plans to reduce
pensions for the third time in three years. The
reduction comes following a revision of actuarial
assumptions that govern pension payout.
Iraq: Old Age Pensions (March 22, 2005)
The woman minister in charge of Iraqi pensions
announced recently that payments to retirees began to be
issued on March 20, 2005, for the first three months of
2005. The post offices distribute pensions in Iraq
.
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.
Return to Top of Page
Global
World: A Look At Pensions
Plans Worldwide (November 30, 2005)
Ever wonder how other nations structure their state
pensions? This is an informative and concise round up of
major pension plans from across the globe.
World:
Does Early Retirement Resolve the Problem of
Unemployment? (November10, 2005)
(Article in Arabic)
Many governments worldwide try to have their
old employees retired early in order to have openings
for young workers. This procedure does not resolve the
problem of unemployment but it makes companies loose
staff who have long work experience. Employers would
have keep old personnel and request them to share
their knowledge with youth instead of making them
leave after many years of continuous hard work.
Unfortunately, retirees find themselves obliged to
look for new jobs to be able to survive after an early
retirement.
World: Public Pensions Go More Private, OECD finds
(November 8, 2005)
Private
pension packages are now starting replace publicly
financed pension plans according to a study recently
released by the Organization for Economic Cooperation and
Development (OECD) . OECD says more state pension plans
are moving towards partial or full reliance on private,
defined contribution pension schemes. Powerful financial
interests have persuaded governments that they cannot meet
the pensions costs of a growing aging population. However,
it is unclear that private investment of public pensions
will greatly benefit retirees.
World: Holy See's UN Address on the Year of Older
Persons (October 6, 2005)
The Holy See’s permanent observer to the United Nations
recognized the important role of older persons in society
during a session of the UN General Assembly. Archbishop
Celestino Migliore noted that the protection of pension
rights along with a basic social pension are effective
ways to promote income support to older persons.
World: World Bank, OECD to Study Global Pensions
(September 26, 2005)
The World Bank and the Organization for Economic
Cooperation and Development (OECD) have agreed to examine
how efficiently funded pension schemes are enforced in
economies. Taking into consideration that private pension
companies are receiving trillions of dollars, they would
like to make sure that their clients are receiving their
fair share of the pension funds. The data collected in
this research project will be extremely important because
it will be used to assess if the private pension systems
are fulfilling their intended purpose.
World:
Poor Old Things (June 29, 2005)
A recent World Bank
study of pension policies across the world shows that
many countries are unprepared for the huge demographic
shift. Across the world, people are living longer and
having fewer children. In Europe, calls to push back the
retirement age are widely disliked. But in poorer
countries, most people want to go on working because
there are few retirement benefits. In the poorest
countries, the pension systems simply cannot deliver
current and future benefits at the prevailing
contribution rate unless the fund is replenished through
taxation, or unless benefits are cut in the future.
Countries designed systems assuming that a larger pool
of workers would make contributions for a small pool of
retirees, and retirees would not live long after
retirement. But that assumption has broken down
everywhere. Find more detailed information on issues
related to aging in Asia and Europe in the full version
of this article.
World: Intervention by Fiona
Clark, Policy Officer for HelpAge International to UN
General Assembly Informal Hearings with Civil Society
for the Millennium Summit Review (June 23-24, 2005)
In anticipation of
five year Anniversary of the UN’s adoption of the
Millennium Development Goals (MDG’s), some Civil Society
Representatives had the opportunity to address or
intervene at a June 23-24 Session of the General
Assembly. Aging activists have long been disappointed
that the MDG’s did not contain a specific reference to
aging. Fiona Clark, from HelpAge International had a
brief statement that she managed to introduce on June
23. Here are her comments.
World: Around the World, People Ask:
What Will Retirement Be Like? (May 24, 2005)
Notions of retirement
are changing. Today, in a lot of countries, people want
to work as long as they can, and retire as late as
possible. As longevity increases and once-certain
financial cushions become less secure, many people are
afraid to stop working. It’s particularly true for
women, for whom retirement is “an inaccessible dream”
according to a new survey by the Heinz Family
Philanthropies and the Women's Institute for a Secure
Retirement.
World: Old-Age Income Support in the
21st Century: An International Perspective on Pension
Systems and Reform (2005)
World Bank Director of
Social Protection Programs, Robert Holzmann, suggests a
five level system corresponding to the resources of the
person: at the bottom, a non-contributory pension or
social pension for those who are the poorest of the
poor; next a contributory system linked to earnings;
next, a mandatory individual saving account; next, a
voluntary program such as pensions from individual
employers, defined benefit and defined contributions,
and finally family intergenerational and other support,
such as housing.
World: How Much Money Do You Need From Your Pension?
(March 3, 2005)
(Article in Chinese)
In this first person account, the author says, "I have
done research on pensions. In the research, I found that
many people are not clear about planning budgets for
themselves when they are old. However, when I showed
them a simple calculation on budgets, they started
thinking about it."
Return to Top of Page
Social
Pensions
Social
Pensions: Bolivia: The Bolivian Government Will Pay
the Bonosol Starting January 3rd (December 30, 2005)
(Article in Spanish)
The Bolivian government has announced that it will
be paying the Bonosol, an annual bonus of 225 US dollars
directed to the elderly, starting this January 3rd. The
pensions’ agency is in charge to regulate and distribute
the funds, $103 million, which will benefit about
460.000 old persons. Bolivians above 65 years will be
able to collect their Bonosol after the date of their
birthday. Veterans, veterans’ widows and the disabled
will have preference. 160 bank agencies and financial
cooperatives across the country are prepared to make the
payments. This year the government is implementing a new
identity-control system, based on biometrics. The funds
for the Bonosol come from the Capitalization Fund (Fondo
de Capitalización Colectiva) first created after the oil
companies’ reforms in 1996.
Social Pensions:China:Why We are Losing
Faith in Social Pension (December 29, 2005)
At present, China's social pension
fund gap has widened to RMB ￥2,500 billion. A recent study
showed that 90% of the people surveyed expressed
concern over life after retirement. Fifty-seven per
cent feel that extra savings will be needed in order
to have a relatively decent retirement life. Thirty-seven
percent believe that their quality of life will
decrease after retirement. Pension experts say that
the government’s pension agency must regain
credibility with the Chinese population.
Social Pensions:Mexico: Mexican Official
Promises Pensions For Elderly, Predicts 4 To 4.5
Percent Growth (November 30, 2005)
The head of the presidential office of public policy,
Eduardo Sojo, stated that with the growth of Mexico’s
economy, they will be able to offer pensions to the
elderly in 2006. Along with the pensions, the country
plans to launch programs that will give housing loans to
millions of self-employed or extremely poor who do not
qualify for the government’s benefits currently.
Social Pensions:Africa: Help Age Report: Making Cash
Count (November 2005)
This study from Help Age International and Save the
Children elucidates the problem of poverty among
children in southern and eastern Africa and how it
affects the elderly in their society. Even though
Botswana and Lesotho are rich and poor countries
(respectively), they both have non-contributory social
pensions. Many of the adult children of the elderly have
passed away because of AIDS resulting in the elderly
caring for the grandchildren. Grandparents are the most
common carers of orphan children even though there is
extended family. Because grandparents do not have the
funding to support their grandchildren, many are living
in poverty. That's why this study calls for
“unconditional cash transfers” to promote a
‘progressive’ social protection agenda. Social
protection is important because it includes such a broad
range of programs like pensions, family allowances or
child benefits, school feeding programs, and health
insurance. The childhood poverty problem for the present
generation will also lead to poverty for the next
generation unless some changes are made to interrupt the
poverty cycle.
Social Pensions: Swaziland:
Relief for the Elderly as Pensions Go Up (November
21, 2005)
The government of Swaziland has decided to raise the
pension for everyone over the age of 60. The 60% increase
comes because the government realized that the needs of
elderly are increasing due to the deterioration of
welfare, a declining economy, and caring for grandchildren
whose parents have died or are sick with AIDs. The AIDs
epidemic has brought life expectancy down from 46 to 36
years old resulting in younger family members who cannot
support elderly parents. Some elderly say that this
pension increase will not last long because the cost of
living like transportation and other goods are so
expensive. Nevertheless, this is an improvement which
shows that the Swaziland government recognizes the value
of its elderly citizens.
Social Pensions: Mexico: Fidel Provides
Benefits for Elderly (October 21, 2005)
(Article in Spanish)
Of the 240,000 adults over 70 years of age living in
Veracruz, Mexico, over 75,000 receive no type of social
assistance, according to Fidel Herrera Beltrán, the
governor of the state. Yesterday, as part of the new
pension program in Veracruz, Beltrán gave out three
hundred checks to as many elderly persons, continuing an
ongoing effort to dramatically reduce the number of
elderly citizens without pension benefits. The program,
Asistencia a los Abuelitos Veracruzanos, will lend
assistance to elderly citizens of Veracruz who have
demonstrated that they receive no government aid, and
Beltrán maintains that all who receive benefits under
the program will enjoy an improved quality of life and
the financial means to cope with medical ailments
brought on by ageing. Currently, 7,127 elderly citizens
of Veracruz receive the program’s benefits, and Beltrán
stated that he intends to increase this number in the
coming year. With less that 10% receiving benefits now,
there’s a long way to go!
Social Pensions:India: Bottom-up Evaluation
of Non-Contributory Social Protection Policy for Rural
Labourers in India (October 2005)
The Chronic Poverty Research Centre based in the UK
recently released a report evaluating the effectiveness
of non-contributory social protection programs on the
poverty levels of workers in rural India. The study
points out differences between effective implementation
strategies and program outcome. In the case of rural
Indian workers, the study shows the implementation of
non-contributory social protection schemes increase the
power of local powerbrokers over rural workers. At the
same time, social protection plans tend to help reduce
poverty levels of rural Indians. Experts caution that
government officials may try to influence outcome
indicators.
Social Pensions: Africa: Pensioners Will Get More in
2007 (October 20, 2005)
When the DTA leader Katuutire Kaura asked for an increase
of monthly pension for the elderly during a debate in
Parliament, the Minister of Labor and Social Welfare
Alpheus Naruseb expressed how he is aware that many
elderly rely on their pensions to live each day and feels
that a holistic approach needs to be taken to undertake
the issue of poverty, not just a small increase in their
monthly pensions. While it will not solve poverty as a
whole, for the time being, the pension increase for older
persons was granted and will take effect starting in
2007.
Social Pensions: UK: Call to Scrap Means-Tested
Benefits in North (October 11, 2005)
Northern Ireland officials are urging the UK government to
end the current means tested state pension system for a
universal senior citizen’s pension. Many seniors view
means testing as demeaning, saying the questions violate
their pride and privacy. A universal pension for seniors
would give greater equity to women and those who may not
have worked enough to qualify for an alternative
retirement scheme. Changing the pension system is
economically feasible, as a simple universal plan will
save money on administrative costs that are currently
incurred by the means tested program.
Social Pensions: Mexico: Government Grants Money to
Thousands of Elderly Persons to Pay for Food (October
7, 2005)
(Article in Spanish)
More than three thousand elderly adults in Chihuahua,
Mexico, will soon receive government monetary benefits
that they may use to pay for food, clothing, and other
necessities. Of the approximately 3,500 elderly
residents of Chihuahua set to receive these benefits,
over 90% of them already possess the official card that
they need to access the money to which the State
Government has entitled them. To qualify for the
benefits, a person must be at least 70 years old and
present a birth certificate and some form of photo
identification. This monetary benefits program reflects
the efforts of Chihuahua’s government to provide the
city’s elderly with the money they need to lead a
comfortable and healthy lifestyle, which, without some
form of government support, becomes elusive once age has
forced them out of the work force.
Social Pensions:Russia:
While City
Pensioners Want Social Protection to Continue, Others
Choose Cash (September 27, 2005)
(Article in Russian)
By October 1, Russian pensioners must choose between a
social protection package and monetary compensation. The
first option includes subsidies on prescription drugs,
sanatorium-and-spa treatment, and suburban
transportation. The second is simply cash. Whereas Moscow
pensioners give preference to social protection,
pensioners from rural areas and those with disabilities,
rushed to the offices of the Pension Fund to get money
instead. Rural pensioners still remember the chaos
associated with receiving prescription drugs in regional
pharmacies. They also never heard about or took
advantage of free sanatorium-and-spa treatments. The
article offers various arguments for and against the
social package for different categories of pensioners.
Social Pensions: Mexico and
Brazil: New Thinking About an Old Problem (September
15, 2005)
Conditional Cash Transfers to poor families help reduce
poverty in some Latin American nations. In Mexico and
Brazil, over five million families receive such a
benefit in each country respectivly. Families qualify
for Conditional Cash Transfers (CCT) based on their
income level and in some cases, on the condition that
children are enrolled in school or receive regular
health services. Typically, the cash transfer is made to
a female head of household, who is sometimes an older
woman. CCT programs provide enough money to impact a
family’s quality of life without discouraging regular
employment. Between 2000 and 2002, the per capita
poverty rate in Mexico declined after a CCT policy was
implemented. In addition, the Conditional Cash Transfer
programs have translated into improved nourishment,
health and education for children.
Social Pensions: China:
Difficulties Facing Social Pension System (September
1, 2005)
(Article in Chinese)
Compared to western industrialized countries, China has
a relatively larger proportion of elderly and the
population is aging at a much faster pace as the result
of the Chinese population policy. While the nation is
still on the road to economic prosperity, the lack of a
sustainable social pension system is likely to make the
road even bumpier.
Social
Pensions:Africa: Ageing and Poverty in Africa and
the Role of Social Pensions (August 2005)
In this working paper the United Nations Development
Program’s International Poverty Center and the World
Bank discuss the role of social pensions for the
increasing numbers of impoverished elderly in Africa.
Both agree on the need for social pensions to lift
elderly and, in many cases their grandchildren and
families, out of absolute poverty. Unclear, however,
is the best way to deliver such assistance. The paper
favors targeted pensions only to the poor with an
eligible age limit at 65+ as opposed to universal
non-contributory pension to all elderly 60+ or 65+.
But while it acknowledges the needs of “more country
specific work” to identify the poor among the elderly,
the paper doesn’t specify the means for poor countries
to conduct such work.
Social Pensions: Mexico: Mayor of Mexico City to Run
for Presidency (June 28, 2005)
After evading a bitter impeachment battle, the
Mayor of Mexico City, Andrés Manuel López Obrador, has
formally announced that he will give up his position as
mayor on July 31st in order to run for the 2006
Presidency of his country. Describing himself as a
“humanist,” Obrador has achieved global notice by
focusing heavily on the elderly in Mexico,providing them with free and
beneficial healthcare and a social pension amounting
to $64 a month. With thousands of seniors in full
support, Lopez Obrador already leads the opinion polls
in Mexico
and is significantly favored over his challengers.
Social
Pensions:China: Report Finds Over 70% of GuangZhou
Citizens Expect Government to Accelerate the
Development of the Social Pension System (June 15,
2005)
GuangZhou Social Opinion
Research Center recently carried out a survey about
GuanZhou citizens’ satisfaction with the pension
system. The report found that 72% of the interviewees
are concerned over what amount the pension system can
guarantee them when they retire. About 40% of the
interviewees think the maturity of pension system is
not comparable to the economic development in the same
region. They hope that the government will devote more
funding to the pension system to secure employees’
retirement life.
Social Pensions:
Malaysia:
Social Pension for the Elderly (June 1,
2005)
Retirees are asking for a social pension in Malaysia. Some developing countries
already have a social pension so the much richer Malaysia
has the capacity to institute
an old age security income for women, family and
every older person who needs it. “No one at old age
should be deprived of food and shelter as enshrined
in the United Nations Declaration of Human Rights,”
says Lum Kin Tuck, president of the National Council
of Senior Citizens Organisations of Malaysia
(Nacscom).
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