First published in 1948, the International Social Security Review is the principal international quarterly publication in the field of social security.
This article provides insights into methodological and measurement considerations and challenges from an actuarial and social security policy perspective with reference to actuarial valuation work undertaken in the recent period. It aims at supporting the global discussion to improve the transparency of the reporting of financial liabilities of social security schemes linked to employment-based obligations (contributory), as these are often guaranteed by the government following social security funding rules such as pay-as-you-go and partially funded approaches. The article supports the actuarial profession’s engagement with experts in national accounting and public finance statistics towards providing improved guidance to national governments in presenting a fair and accurate picture of the financial position of their social security schemes with due and unbiased recognition of the social security policy approach decision of any given country. While the reflection of the financial position of social security schemes guaranteeing long-term benefits payable for life is most important in terms of possible public finance implications, care must be exercised in adopting a valuation methodology and indicators that are not biased and which do not distort the interpretation of its financial position. In this respect, challenges remain and there is ample scope for refining methodologies and adopting coherent accounting approaches encompassing policy decisions for funding purposes.
The international statistical community has a growing interest in the liabilities of pension and social security systems. The System of National Accounts 2008 encourages countries to provide detailed information in a supplementary table on pensions. The IMF Government Finance Statistics Manual also encourages reporting of public-sector balance sheets as part of government debt, and the European Union (EU) has mandated that all EU Member States compile estimates of accrued-to-date (ADL) liabilities for all pensions, including public-sector pensions and social security schemes. The ADL liabilities for public-sector pensions, which are often defined benefit, and typically financed on an unfunded (pay-as-you-go) or partially funded basis, are likely to be very large in some countries, receive significant public scrutiny, and be misunderstood and/or misused. The article begins by reviewing the current requirements, disparity and ambiguity in existing accounting and actuarial standards. It notes the opportunities for “accounting arbitrage”, where countries can provide similar benefits in a different form to avoid placing these pension liabilities on the government balance sheet and/or to avoid required disclosure of pension liabilities. This article concludes that the ADL for social security and government-sponsored pension programmes has little or no meaning, does not provide any information about the fiscal sustainability of a country’s pension programmes and does not provide any useful information for comparing pension plans across countries. It argues that the best measure of fiscal sustainability for unfunded or partially funded pension programmes that are financed on a pay-as-you-go basis is the financing gap, and that this “open group” measure of fiscal sustainability should be published alongside the ADL, supplemented by information on coverage rates, replacement ratios and expenditures as a per cent of GDP. The article concludes that pension expenditures as a per cent of GDP is probably the single best measure for cross-country comparison.
This article addresses the influence of the International Labour Organization (ILO) on other international organizations and global agencies which resulted in their endorsement of the Social Protection Floor (SFP) concept. By 2012 the concept had been endorsed by the United Nations in the shape of the UN Chief Executives Board's SPF‐Initiative, the World Bank in its new Social Protection and Labor Strategy and by the G20 at the Cannes Summit. Furthermore the IMF had agreed to work with the ILO to explore the options for creating fiscal space within countries to fund SPFs. Special Rapporteurs for the UN Human Rights Council had also in 2012 called for the setting up of a global fund for social protection to enable poorer countries to develop their floors. By 2012 a new coordinating authority, the Social Protection Inter‐Agency Cooperation Board (SPIAC‐B), had been ushered into existence to facilitate inter‐agency cooperation. This article describes and explains how these developments came about. It asks if the reality of increased global social governance cooperation in the field of social protection is as effective as it seems or whether there are new contradictions, overlapping and competing mandates and policy disagreements at the global level.
Nigeria has a predominantly youthful population and limited job opportunities in the formal labour market, which makes the search for formal employment difficult and can be conducive to the growth of exploitative working conditions. As one response to address the vulnerability of Nigerian workers, the Employee's Compensation Act was passed into law in December 2010. Of note, the Act includes provisions for compensation for mental health injuries, or “mental stress”, suffered in the course of employment. The article examines the strengths and weaknesses of the provisions, in particular the premise for mental health injury claims made in the Act. The wider policy implications of the Act as regards the development of compensation for mental health injuries in sub‐Saharan Africa are discussed and suggestions for the future review of the Act offered.
The informal workforce is growing worldwide, and changes in the global structure of employment and in places of employment mean that work is a source of hazard and ill‐health for many poorer workers. Yet informal workers do not have access to work‐related social security. They face high work‐related risks, but have little or no access to reliable formal or informal social protection. Citizen‐focused social security programmes, such as cash transfers, do not give enough attention to the needs of able‐bodied adults who work. Further, informal workplaces are not covered by the traditional discipline and practice of occupational health and safety (OHS), which is a necessary component of overall work‐related social security. In particular, poorer informal workers are ill‐placed to make use of possible preventive interventions, as they may lead to loss of income in the short term. A more inclusive approach will require changes in the institutional arrangements governing OHS, and should involve especially local authorities and informal worker organizations, who are developing influential international sectoral networks. In this regard, promising examples of negotiated and inclusive OHS policy reforms are presented. The broader challenge is to develop an expanded OHS that specifically includes informal workers as “workers”, rather than as “vulnerable citizens” who qualify only for poverty‐oriented social protection programmes, and that explicitly addresses preventive measures.