Non-contributory Pension Schemes Key – ISSA

By Hlengiwe Ndlovu, www.observer.org.sz

December 31, 2008

Swaziland

The International Social Security Association (ISSA) has lauded Swaziland, amongst other developing countries including Botswana, Lesotho and Bolivia, for having introduced non-contributory pension schemes.

In its website, ISSA states that the growing recognition in developing countries to extend old-age income security to all has only been recently realised. 

Information sourced from the website states that only a few developing countries have non-contributory pension schemes, but in the last decade several countries in Southern Africa (Botswana, Lesotho, and Swaziland), Latin America (Bolivia) and South Asia (India, Bangladesh, Nepal) have introduced them whilst countries with existing non-contributory pension schemes have strengthened them (Argentina, Brazil, Chile, South Africa). 

The organisation alludes to the fact that non-contributory pension schemes can make a significant contribution to reducing poverty and vulnerability among older people and their households.

ISSA further states that many middle income countries have established social security institutions covering a significant proportion of the labour force and population, but in the last two decades their coverage has stagnated or declined.

“In low income countries, informalisation restricts the expansion of contributory social security beyond a small fraction of the labour force. It is therefore, important to consider new strategies to extend old-age income security. 

“Non-contributory pensions and poverty reduction programmes providing regular income transfers to poor and poorest groups have proved successful in extending protection to older people and their households in low income countries”.
The organisation also alludes to the fact that the demographic, social, and economic transformations are responsible for changes in the patterns of vulnerability associated with old-age, and for changes in the sources of protection. 

“Rapid demographic change will stretch the capacity of households to provide old-age support, while economic transformation has direct implications for the livelihoods of older people. The impact of HIV/AIDS and migration underline the important role and responsibilities of older people in their households and communities”.

In addition, ISSA states that due to the strong correlation existing between old-age and poverty and vulnerability, poverty reduction programmes relying on regular income transfers and targeting the poorest can provide income security in old-age. "Bolsa Familia", which replaced "Bolsa Escola" in Brazil, now reaches all poorest households regardless of composition. "Oportunidades", which replaced "Progresa" in Mexico, has introduced a direct subsidy for older people in beneficiary households as well as old-age saving plans for younger beneficiaries.

About ISSA
The International Social Security Association (ISSA) is the world's leading international organisation bringing together government departments, social security administrations and agencies. The ISSA membership is composed of institutions and bodies administering social security in most countries of the world, including all forms of compulsory social protection which, by virtue of national law or practice, are an integral part of national social security systems. Founded in 1927, the ISSA has its headquarters in the International Labour Office, in Geneva, Switzerland. 

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