Archive for the ‘Pensions’ Category

Canada’s path to basic income

Monday, October 7th, 2019

Montreal writer Pierre Madden has written a very interesting article in which he argues that Canada already provides a basic income for parents of children aged 0 to 17 and to legal residents 65 years of age or older, so why not extend this to all ages?. Here are the main take-aways from his article: (more…)

my path to pension reform

Wednesday, June 19th, 2019

My interest in pension reform began 19 years ago, in April of the year 2000. I was at an OECD conference in Prague, listening to presentations of two World Bank economists (Estelle James and Dimitri Vittas). At that moment, it suddenly dawned on me that an ideal pension system should provide basic pensions for everyone, funded pay-as-you-go from general government revenue, allowing citizens who desire more than basic income in retirement to save in any way they please, without subsidies, tax breaks or coercion from government. This was my ‘Eureka’ moment.

When it was my turn to speak, the very next day, I spoke with excitement and enthusiasm. The conference was on private pensions, so the audience did not react warmly to my talk. Nonetheless, I presented my core ideas orally, and drafted a discussion paper (“Three Pillars of Pensions?”) immediately after the conference. (more…)

universal pensions and retirement savings in New Zealand

Sunday, November 25th, 2018

New Zealand has a simple, very successful pension system that could serve as a model for other countries. Unfortunately, despite its simplicity, few understand how the system works. The Government of Ireland, which is reforming its system, is an example of this misunderstanding, Susan St John points out.

New Zealand recently added an auto-enrolment, voluntary savings scheme, known as KiwiSaver, to its pension system. KiwiSaver has many shortcomings, is fiscally costly, and and is considered by many to be unnecessary since nearly all residents of New Zealand are guaranteed a basic old-age pension for life. (more…)

universal pensions in Georgia

Sunday, November 4th, 2018

The Social Security Administration (SSA) of the USA informs us that Georgia, a former member of the Soviet Union, will require workers to contribute up to 6% of their wages to private pension funds beginning January 2019. Georgia is adding a second tier to its first tier: a universal, government-financed pension of 180 tlari [US$69] a month for men from age 65 and women from age 60. The SSA describes this as a “subsistence-level benefit”, but Georgia is a poor country, so the pension amounts to about 20% of per capita GDP. In the US, a benefit equal to this portion of per capita GDP would be nearly one thousand US dollars a month. (more…)

targeting old age benefits in the Philippines

Wednesday, October 17th, 2018

The older persons of Bangued, a city with a population of nearly 50,000 and capital of the Philippine province of Abra, celebrated this year’s National Elderly Week by questioning government officials on distribution of benefits intended for the poor, in accord with the Expanded Senior Citizens Act of 2010. The targeting is by household, regardless of whether individual members of the household receive adequate care and nutrition. Even with perfect targeting, many senior citizens would be left in poverty. And the targeting is far from perfect. (more…)

universal age pensions for India

Monday, October 8th, 2018

This is one of the best, concise essays I have seen in defence of universal age pensions. The author, Prabhat Patnaik, is an Indian economist known to be a Marxist, but I see nothing Marxist in this essay. Since the newspaper link may not last long, I have taken the liberty of sharing with TdJ readers an edited version that is about half as long as the original. To download and read the full essay, click on the link below. (more…)

universal pensions in India?

Friday, September 28th, 2018

Assam, a state in Northeast India with a population of more than 31 million, on October 2nd will launch universal pensions for residents 60 years of age or older. (more…)

Frank Field on universal pensions

Monday, September 24th, 2018

The British politician Frank Field, on the 70th anniversary of the famous Beveridge report that established a welfare state in his country, expressed very clearly my own views regarding the important but limited role of government in provision of old age pensions: there should be a universal pension for everyone of pensionable age, financed from general government revenue, regardless of the income or wealth of a beneficiary. Everyone is free to supplement this basic pension with his or her own savings, or wages from working beyond the official state retirement age.

This system, though simple, is rarely put into practice. (more…)

towards universal pensions in the Philippines

Monday, September 10th, 2018

A Philippine Senator has introduced a bill in Congress to double the social pension for his elderly countrymen and remove the means test, leaving only a pension test. If his bill passes, every resident aged 60 years and older without access to a contributory pension will receive a monthly benefit of one thousand Philippine pesos (approximately 18.50 US dollars). Pension coverage, currently 72% of the country’s senior citizens, would increase to 100%.

The proposed social pension is far below the poverty line (8,378 pesos a month in 2014), but would mark a beginning towards guaranteed basic pensions for all in the Philippines. (more…)

targeting the poor does not work

Tuesday, September 4th, 2018

Targeting the poor provides opportunity for corruption in delivery of benefits, even when the beneficiaries are older persons. Here is an example from Nueva Ecija, a province in the Central Luzon region of the Philippines. (more…)