Archive for the ‘Pensions’ Category

good news for social pensioners in Fiji

Sunday, July 9th, 2017

The government has increased the Social Pension Scheme allocation from fourteen million dollars to thirty seven million dollars.

Minister for Women, Children and Poverty Alleviation, Mereseini Vuniwaqa says …

”We are really grateful that the government has considered as being one of the increases and it’s a notable increase from $50 to $100 [about 50 US dollars] per pensioner so I’m sure there will be a lot of happy pensioners out there come 1st August.”

All persons under the Social Pension Scheme will now receive $100 and the eligibility age has been lowered [from 68] to 65 years.

Sainiani Boila, “Pension scheme allocation increases to $37m“, Fiji Broadcasting Corporation, 6 July 2017.

The Social Pension Scheme is means-tested assistance that targets older persons with no other source of income. The pension is small, but much better than the previous benefit of 50 Fijan dollars a month. The budgeted amount is sufficient to provide pensions to more than 30,000 older persons.

 

Hong Kong changes leaders

Thursday, July 6th, 2017

… but not policies. Plans for a universal pension, in particular, will not be implemented, nor even debated, by the Legislative Council.

A long-forgotten peace resumed in the Legislative Council on Wednesday as the city’s new leader Carrie Lam Cheng Yuet-ngor attended her first question-and-answer session ….

While radical lawmaker “Long Hair” Leung Kwok-hung was again ousted from the chamber as he protested against Lam for not implementing a universal pension scheme, lawmakers from both sides agreed the meeting was more constructive and peaceful than those attended by Lam’s predecessor Leung Chun-ying. ….

But not all people were happy.

“Long Hair” Leung Kwok-hung feared the [pan-democrat] camp would become more passive – or even be dismantled.

Jeffie Lam and Kimmy Chung, “Peace returns to Hong Kong’s legislature as new leader Carrie Lam attends first session – but how long will honeymoon last?“, South China Morning Post, 6 July 2017.

UBI in poor countries

Wednesday, June 7th, 2017

This is a great column. Mr Sandu does not mention it, but a universal pension is also good for poor countries (and wealthy countries as well). A universal pension, after all, is a universal basic income (UBI) limited to older folks and younger persons with disabilities.

[T]he debate in rich countries tends, naturally enough, to focus on the affordability and desirability of UBI in rich countries. But there is much to learn — for rich countries, too — about whether UBI would make sense in poorer ones. The answer is, perhaps paradoxically, that there is a good case for low-income countries to leapfrog the rich world in welfare policy.

John McArthur asks how many poor countries could afford to pay a UBI large enough to eradicate extreme poverty. The answer is stunning: 66 countries could do this at a cost of no more than 1 per cent of their national income. Doing so would lift 185m people out of extreme poverty, a quarter of the global total. A further 25 countries could do the same at a cost of between 1 and 5 five per cent of national income, eradicating extreme poverty for another 150m people. ….

UBI is the new frontier in welfare reform. At the moment it looks more likely to be conquered by the developing world, while countries known as advanced economies look on from behind.

Martin Sandbu, “Leapfrogging to universal basic income“, Free Lunch, Financial Times, 7 June 2017 (unfortunately gated by a paywall).

Mr Sandbu cites “How many countries could end extreme poverty tomorrow?“, 1 June 2017, a blog by John W. McArthur, senior fellow in the Global Economy and Development program at the Brookings Institution.

waiting for universal pensions in Hong Kong

Monday, May 29th, 2017

Hong Kong is a city of immense wealth, but it is also a city where far too many residents – especially older residents – live in poverty. The people of Hong Kong have shown remarkable patience while the government refuses to implement a universal pension recommended long ago by their own consultant, University of Hong Kong professor Nelson Chow Wing-sun. (more…)

towards ‘universal’ pensions in Bangladesh

Saturday, May 27th, 2017

The government of Bangladesh plans to introduce a scheme that promises a ‘universal’ pension to everyone who contributes to a pension pot. Those who contribute little will receive little in their old age. Those who contribute nothing will receive nothing. Is this a universal benefit? Not by my definition.

More than 6% of Bangladesh’s 169 million residents are older than age 60. These older persons cannot save much for their old age, as they have already reached old age. Nor can we expect unpaid caregivers or workers in the informal sector to participate in the proposed ‘universal’ retirement savings scheme. (more…)

elder poverty in Myanmar (Burma)

Tuesday, May 9th, 2017

Buddhist teachings have traditionally emphasised respect towards the elderly, and on the surface it seems like family structures are still strong, with 86 per cent of elderly folks reportedly living with family.

But cases of abuse and abandonment are on the rise, so much so that a law was enacted in December 2016 to address the issue. The law sets out to protect the rights, health and economic well-being of the elderly.

Daw Khin Ma Ma is one of the lawyers who worked on drafting the law, and she also runs a nursing home for the elderly who have been abused or abandoned. ….

[She said] “Poverty is at the centre of all this … if an elderly person suffers a stroke, they become a burden. The family still needs to make their living every day, children have to go to school. Who will take care of them?”

Some mentally-ill folks are simply driven somewhere and abandoned by the side of the road, unable to tell rescuers where they live.

Other times, seniors are found literally thrown into a rubbish pile, beaten and left for dead. “There have been so many terrible cases that strip off human dignity,” Daw Khin said. ….

Financially and administratively, the government is limited. Just last year, the Ministry of Social Welfare proposed a universal pension of 25,000 kyats (S$25) for citizens over 65, but had to cut back on its plans because of insufficient budget.

Eventually, it compromised on a monthly pension payout of 18,000 kyats (US$13) for seniors over 90 years of age. The average life expectancy in Myanmar is 67 years.

Lam Shushan and Ray Yeh, “Poverty forces families in Myanmar to ditch their elderly“, Channel NewsAsia, 21 April 2017.

HelpAge International, a London-based charity, is working in Myanmar to lower the age of eligibility for the universal pension. An earlier proposal was to set the age of eligibility at 100 years! HelpAge is active also in other aspects of the lives of older persons.

Through a programme called the Older People’s Self Help Group, HelpAge trains seniors to form a network of support for each other, which encourages them to keep active both economically and socially.

Widow Daw Hla Than, 75, makes a dollar or two for a massage that lasts as long her clients desire. (Photos and video: Lam Shushan and Ray Yeh)

Watch also the 5-minute video “Daw Hla’s story

Australia looks at universal pensions

Sunday, April 9th, 2017

Australians are beginning to show interest in New Zealand’s universal pension scheme. Here is a column the could have been written by my friend and colleague, New Zealand economist Susan St John. (Susan, were you the ghost writer?) (more…)

toward universal pensions in the Philippines

Sunday, February 19th, 2017

There are signs of movement, but the pace is very slow.

[Philippine] President Rodrigo Duterte, last January, granted the P1,000 [US$100] pension hike for Social Security System (SSS) beneficiaries. The Department of Social Welfare and Development (DSWD) also has a larger budget for social pension for indigent seniors, effectively doubling the target coverage from 1.3 million elderly in 2016 to 2.8 million this year.

Despite these, a study by the Coalition of Services of the Elderly (COSE), in partnership with HelpAge International, showed that 38% of senior citizens will still not be provided with social pension. It also said 34% of SSS members receive less than P2,000 every month. ….

Using data from the Annual Poverty Indicators Survey (APIS) released in 2013, the study did a simulation that shows the poverty rate would be reduced [by 3 million] from 25.4% to 22.3% if a P2,000 universal social pension is provided. ….

The study said the government, realistically, could increase the amount of social pension to P1,500 monthly. This would cost P143.97 billion or 0.97% of the country’s gross domestic product (GDP) and 4.80% of its [total government] expenditures.

Patty Pasion, “Pension for all seniors to lift 3 million out of poverty – study“, Rappler, 19 February 2017.

The study’s recommendation is an improvement, but still leaves about 23 million persons – 22.9% of the population of older persons – in poverty. The Philippines’ latest poverty line for 2014 is a per capita income of 100,534 pesos a year, equivalent to 8,378 pesos a month. Providing all older people with a pension this size would eliminate elder poverty. Is it worth doing? Would it be money well spent? This is a political question that must be decided by the taxpayers of the country.

One way to reduce costs is to provide a universal pension half this size for the ‘younger old’, aged 60-64, who can continue to participate in the paid labour force. In addition, benefits should be taxed as regular income, so that older persons of any age who are continue to work contribute also to the budget of the country.

Wall Street and the White House

Friday, February 3rd, 2017

The relationship between Wall Street and the White House is closer than ever. Donald Trump will soon begin to release Wall Street from controls that President Obama imposed on banks and financial advisers.

President Donald Trump is on Friday due to take his first steps towards undoing parts of the Dodd-Frank reforms that reshaped US banking in the aftermath of the financial crisis.

Mr Trump will also cheer financial professionals who offer retirement advice by directing his officials to consider scrapping a rule that orders them to act in the best interests of their clients, a senior White House official told the Wall Street Journal. [Emphasis added.]

Gary Cohn, the former Goldman Sachs executive who is now director of the White House’s National Economic Council, said Mr Trump would sign executive orders preparing the way to fulfil a campaign pledge to dismantle parts of Dodd-Frank. ….

The so-called “fiduciary rule” on retirement advice, which is in the White House’s crosshairs, has been the target of fierce lobbying by broker-dealers and other financial advisers since it was proposed by the Obama administration in 2015.

Although not yet in force, it will require them to recommend the best product for their clients, not just a suitable product. [Emphasis added.] ….

Steven Mnuchin, the hedge fund manager nominated to be Treasury secretary, has promised to “kill” parts of the [Dodd-Frank] law, including the Volcker rule, which put curbs on banks placing bets with their own money.

Barney Jopson, “Trump to take first step towards dismantling Dodd-Frank reforms“, Financial Times, 4 February 2017 (gated paywall).

the failure of universal pensions in Hong Kong

Saturday, January 21st, 2017

The outgoing Chief Executive of Hong Kong failed to keep a promise to push for universal pensions. Hong Kong is a wealthy territory. Taxes are very low, and government spending is even lower, leaving large fiscal surpluses. There is no economic reason to deny Hong Kong’s elderly citizens access to a basic pension. There is a universal pension in effect, but the amount is so small that it is known as “fruit money”. What is needed is a pension large enough to satisfy basic needs.

[Chief executive] Leung Chun-ying’s question-and- answer session for his swan song policy address was cut short after pan- democrats protested the ejection of lawmaker Lau Siu-lai for playing a recording of the outgoing chief executive’s “broken promises.” ….

Leung was answering questions about the policy address he delivered on Wednesday. When it was Lau’s turn, she played a 2011 video clip on her phone in which Leung “promised” to push for universal retirement protection.

In the press conference that followed his address on Wednesday, Leung denied having shown any support for universal pension when he ran for chief executive.

But in the clip Leung can be heard telling a senior citizen, Lo Siu-lan, that “we don’t need to be vigorous in implementing universal pension, we just need to be serious.”

When Lau told Leung he failed to fulfill his election promise, Legco president Andrew Leung Kwan-yuen ordered her to leave the chamber.

Chaos broke out as 10 pan-democratic lawmakers surrounded security guards who tried to escort Lau out of the chamber.

Andrew Leung suspended the meeting and in the melee that followed several people fell to the floor, some on top of Lau and independent lawmaker Claudia Mo Man-ching.

After more than 20 minutes, Andrew Leung asked the pan- democratic lawmakers to return to their seats. And when they refused he adjourned the meeting at about 11.45am.

Phoenix Un, “Leung session ends in bedlam“, The Standard (Hong Kong), 20 January 2017.

See also this earlier post.