This policy paper: (i) provides a global overview of the organisation of pension systems, their coverage and benefits, as well as public expenditures on social security, in 178 countries; (ii) analyses trends and recent policies, e.g. extension of coverage in a large number of low- and middle-income countries; (iii) presents the negative impacts of fiscal consolidation and adjustment measures in a number of higher-income economies; and (iv) calls for the expansion of social protection in pursuit of crisis recovery, inclusive development and social justice.
Key Findings:
- The right to income security in old age, as grounded in human rights and international labour standards, includes the right to an adequate social security pension. In many countries with high shares of informal employment, pensions are accessible only to a minority, and many older persons can rely only on family support.
- Nearly half (48%) of all people over pensionable age do not receive a pension. For many of those who do receive a pension, pension levels are not adequate. As a result, the majority of the world’s older women and men have no income security, have no right to retire and have to continue working as long as they can – often badly paid and in precarious conditions. This gap will have to be filled to a large extent by an expansion of non-contributory pensions (social pensions).
- Many countries have recently made efforts to expand the coverage of contributory pension schemes and to establish non-contributory social pensions to guarantee at least basic income security in old age to all. More than 45 countries have reached 90 per cent pension coverage and more than 20 developing countries have achieved or nearly achieved universal pension coverage.
- Public expenditures on pensions range from 0-2% of GDP in low-income countries, to 11% of GDP in the higher-income Western Europe. As an average, world countries spend 3.3% on pensions for older persons.
- Guaranteeing adequate income replacement is equally important as expanding pension coverage. Adequacy of pensions is an issue worldwide. Pensioners in most developing countries receive very low benefits. Preventing the erosion of the value of pensions over time requires ensuring regular adjustments to account for the effects of rising wages, inflation or other factors.
- High-income countries have reduced a range of social protection benefits and limited access to quality public services. Together with persistent unemployment, lower wages and higher taxes, these measures have contributed to increases in poverty or social exclusion.