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