June 2002 Insights Issue #42

Pensions for life?

The rise of pensions as a development issue

The 1990s could well qualify as the decade of global pension reform. A number of countries in Latin America and some transition economies radically transformed their pension provision and moved swiftly towards privately provided individual retirement plans. Less conspicuous, but no less important, South Africa and Brazil reformed their basic pension plans to achieve almost universal coverage.
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Other articles in this issue:

The challenge for India

In the past 50 years, policymakers in India have made precious little progress towards providing a viable alternative to the family as the main source of income security for the elderly. Will recent government initiatives help India navigate its demographic transition in the 21st Century?

Pensions in development

There is now a substantial accumulation of evidence from the pension reform experiences of middle income countries over the past two decades, allowing for an evaluation of their outcomes. Findings from this evaluation lead to important lessons, both positive and negative, for developing countries.

Africa in crisis

There has been much talk of an ageing crisis in Europe, as fertility rates fall and longevity increases. But this concern is overstated: with efficient capital markets and flexible labour markets, it should be possible to accommodate changes in life expectancy and in the size of the potential workforce.

Asia - success or failure?

Many Asian countries rely on provident funds to finance retirement. Globalisation, rapid ageing, a need for fiscal consolidation and more individualistic preferences have increased the significance of provident funds, but substantive reforms in their governance are needed to realise their full potential.

Reforming the reform?

One of the most painful consequences of Argentina's economic crisis has been the deterioration in its social security pensions. This has called into question some of the fundamental assumptions underlying two decades of pension reform in Latin America.

Politics of reform

Two decades after Chile's radical departure from the Bismarckian model of old-age security, this novel type of pension reform has long ceased to be an isolated event. Not only in Latin America but also in the post-socialist world, compulsory fully-funded schemes are being introduced. What accounts for the political feasibility of such radical moves? And how can the peculiar spread of ideas from the south to the east be explained?

Social pension uncertainty

Only three countries in sub Saharan Africa - South Africa, Namibia and Botswana - provide non contributory social pensions for their elderly citizens. In South Africa there are over 1.6 million social pensioners, each receiving R600 (about £39) per month. Namibia's 85,000 social pensioners receive a much lower N$250 (about £16), comparable to Botswana's 110 Pula (about £12), which is paid to 80,000 social pensioners each month.

The spread of benefits

Social security coverage of the Brazilian elderly has never been better than at the end of the 1990s. According to a household survey by Pesquisa Nacional por Amostra de Domicilios (PNAD), 77.3% of people aged 60 or over were receiving a regular benefit from a social security scheme (see Graph 1). In the early 1970s, social security coverage in the country was close to 30%. What explains the rise in coverage?

Poverty and pensions: The rights of older people

Relatively rapid population ageing in poorer countries implies that unless policies and social protection schemes specifically address issues of old age poverty, targets for poverty reduction will not be achieved. Studies of poverty in old age reveal its multi-dimensional nature, including its persistence and its intergenerational impact.

Sites for sore eyes

Further web resources.

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