Unemployment insurance in Chile: Reform and innovation
The expectation is that the UI reform will result in real improvements in social security for Chilean workers
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Since reforming its previous employment-related social insurance programme in 2001, Chile has operated an innovative two-tier unemployment insurance (UI) programme for new entrants to the workforce. Insured workers are covered by an individual severance account (Régimen de seguro de cesantía) that is supplemented by a solidarity component paid from the Solidarity Severance Fund (Fondo de Cesantía Solidario). However, in January 2009 the Chilean authorities further reformed the programme.
The new reform seeks to address a number of specific concerns: a system design that was deemed inappropriate for the realities of the Chilean labour market where job turnover is high, long-term unemployment commonplace and contribution histories are often interrupted. Additional concerns addressed by the reform relate to overly-stringent eligibility criteria, which have restricted access to benefits, and the limited duration for which benefits have been paid. Despite the new reform legislation, a number of concerns remain, not least with regards to the accessibility and adequacy of unemployment benefits and the effectiveness of employment services.
The context and motivation for the 2009 UI reform
The 2001 UI reform was largely a response to the impact of Asian economic crisis during the 1990s, which pushed the Chilean unemployment rate into double figures. Chilean policy-makers have since analysed the impact of this reform, not least to seek improvements in coverage and to increase the system’s effectiveness. As a result of the financial and economic crisis, the pace of the reform process intensified in the second half of 2008 - a bill was sent to Congress in August 2008, a fast-track discussion was requested by the current administration in December, and the legislation passed in January 2009 (implemented from 1 May 2009). Of note, the reform shares similar objectives with Chile’s 2008 old-age pension system reform: to increase coverage and benefits through solidarity components and to introduce a greater degree of flexibility in paying contributions.
Structure and characteristics of UI
The Chilean UI system pioneered an innovative design, mixing individual accounts for unemployment (Individual Severance Account - ISA) and a social insurance component (Solidarity Severance Fund - SSF). The monthly contribution to the system is equivalent to 3 per cent of covered wages.
For employees hired under fixed-term contracts, the contribution is levied on the employer alone. For employees with open-ended contracts, the contribution is shared between the employee (0.6 per cent of monthly earnings, which is allocated completely to the ISA) and the employer (2.4 per cent of the employee’s monthly earnings, which is split between the SSF and the employee’s ISA). The employer’s contribution is mostly allocated to the employee’s ISA, with a small part paid to the SSF (0.8 and 0.2 percentage points in the case of employees with open-ended contracts and for employees with fixed-term contracts, respectively) (see Figure 1). The SSF is also partly financed by a monthly fixed amount from general tax revenues; annually, this is equivalent to approximately USD 14.5 million.
The UI benefits financed by the ISA consist of monthly amounts payable until the resources accumulated in the individual account are exhausted. The benefit level is defined in terms of a decreasing replacement rate and is payable for a maximum of five months: for the first month, the worker receives a benefit equal to 50 per cent of his or her average earnings in the last 12 months; for the second, 45 per cent, and so on, until the fifth month, when 30 per cent is paid (see Table 2).
Qualifying conditions for ISA benefits
Open-ended contracts: if an employee resigns or is dismissed and has a combined total of 12 months of contributions he or she can withdraw as many monthly payments as years of contributions from his or her ISA, up to a maximum of 5. The unemployment benefit is financed only from the ISA.
If a worker is laid off (according to the Labour Code) and has 12 consecutive months of contributions, the unemployment benefit is paid from the ISA for a maximum of 5 months.
Fixed-term contracts: regardless of the cause of unemployment, a worker may withdraw the ISA balance as a lump sum if he or she has a combined total of 6 months of contributions.
Qualifying conditions for SSF benefits
Unemployment benefits may be paid from the SSF if: the worker has 12 months of contributions in the last 24 months, the last three months being continuous and with the same employer; has been laid off (according to the Labour Code); is unemployed when the benefit is claimed; and the ISA balance is not sufficient to finance benefits as defined by Table 2, above.
Access to SSF benefits is voluntary and complements the ISA benefits payable (see Table 2) once the ISA balance is exhausted. Unemployed persons are informed of their rights when the benefit is first claimed and must choose whether to use the SSF or not. The SSF can only be used twice in any five-year period.
If qualifying for benefits financed by the SSF, employees with open-ended contracts receive five months of benefits based on their average earnings, with declining percentage replacement rates identical to those of the ISA. Following the 2009 reform, employees with fixed-term contracts may receive benefits financed through the SSF for two months with replacement rates of 35 per cent and 30 per cent, respectively.
The key difference between being a SSF or an ISA beneficiary is the quality of the social protection offered. In the first case, the unemployed worker is guaranteed to receive a cash benefit for a defined period of time and amount, while in the second case the duration and value of benefits depends exclusively on the amount saved, which is directly linked to the individual’s work history.
Workers in more precarious forms of employment, or who are less well-educated or in less productive sectors of the economy, tend to have shorter periods of employment and lower earnings. This translates into lower savings in the ISA and they often have a lower likelihood of meeting the qualifying conditions for the SSF benefit. The ISA benefit is often the only source of income protection during periods of unemployment, which often may not be sufficient given their lower earnings.
UI reform to increase coverage and effectiveness
There were three areas of policy concern that led to the 2009 reform:
- An important proportion of the Chilean workforce is employed under fixed-term contracts and was excluded from the SSF and its higher and more comprehensive benefits. In December 2008, around 44 per cent of contributors to the UI system were fixed-term employees. The Superintendence of Pensions, the Government agency in charge of overseeing the UI scheme, calculated that this group received, on average, a replacement rate from the ISA lower than that for workers receiving benefits from the SSF.
- Through the UI reform, fixed-term contract workers can access the SSF benefits under the same conditions as open-ended contract workers, but only receive two months of benefits and with a lower replacement rate. The argument for extending coverage in a limited manner only stemmed from concerns about possible behavioural changes in job-seeking efforts among these workers.
Even for open-ended contract workers, who were previously covered by the SSF, the eligibility requirements were often too difficult to meet. Annually, only 25 per cent of beneficiaries with open-ended contracts qualified for the SSF. The main barrier to access was the required 12 continuous months of contributions. This proved to be a very difficult condition to meet given the labour turnover rate. The new requirement is 12 monthly contributions in the last 24 months, the last three months being continuous and with the same employer.
- With regards to the quality of the benefit, a weakness was that the duration of benefit payment was fixed independently of the national unemployment rate. This failed to take into account that in periods of higher unemployment the average time required to find a new job would be longer. Under the UI reform, for every month the national unemployment rate is one percentage point higher than the national four-year average, all beneficiaries who are due to receive their final monthly unemployment payment will be eligible to receive two additional months of benefit at a replacement rate equal to 25 per cent of their previous earnings.
Remaining policy challenges
UI and severance payments: Open-ended contract workers laid off because of what is referred to as, “enterprise necessity” and with 12 months or more of employment are entitled to a severance payment equal to one month's salary for every year of work. Currently, the wage contribution made by the employer to the ISA can be discounted against the amount to be paid as a severance payment. This mechanism is considered a positive feature because it allows employers to make provision for future possible financial obligations, something that is especially important in periods of high staff turnover when enterprises must finance severance payments. A remaining policy question is whether further improvement in the coordination between UI and severance payments should be sought, and whether the latter should be partially substituted by a more generous UI benefit. To date, a lack of statistical data regarding the level and coverage of severance payments has not permitted an informed discussion about the pros and cons of these policy options.
The contributory nature of UI: Even after the reform is implemented, the qualifying conditions to access UI benefits will be relatively difficult to meet for many workers: 12 months of contributions in the last 24 months, of which the last 3 are continuous and with the same employer. The current international crisis is likely to compound this difficulty. Therefore, a policy challenge is whether the contributory nature of UI should be relaxed further or even merged with non-contributory programmes, as was done under the 2008 pension system reform.
Extension of UI coverage: In 2008, the working population covered by UI was around 60 per cent. Accordingly, a significant portion of the working population is still uncovered. Informal workers, civil servant, employers and self-employed persons are excluded from the system, leaving them without any formal protection during periods of unemployment and reliant on emergency unemployment programmes and other social protection programmes. One policy question is whether legal coverage should be expanded to civil servants and other formal forms of employment. Another is how to improve compliance among, already ostensibly covered, small economic units.
The effectiveness of employment services: There is room for improving employment services. Specifically, there is weak coordination between UI and other programmes aimed at improving employability and the return to work of the unemployed. In this respect, a priority group to be targeted should be UI beneficiaries. In due course, this should help workers return to work more rapidly, especially as the economy starts to move out of the current crisis.
The expectation is that the UI reform will result in real improvements in social security for Chilean workers: entitlement conditions will be more flexible and expected benefits will improve. The question remains, however, as to whether these measures are sufficient to provide adequate unemployment protection. A challenge is to predict how the labour market might respond to the current economic crisis and to envisage additional policy measures that may be needed to ensure the social protection of workers and their families.
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Social Security Reforms
from Bolivia, Brazil, Canada, Cuba, Ecuador, Finland, Gambia, India, Ireland, Israel, Japan, Malaysia, the Netherlands, the Russian Federation, Uganda and Uruguay
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A selection of recent reforms in social security schemes worldwide compiled by the ISSA Social Security Observatory, with links to a full description of the reforms in the ISSA country profiles.
Bolivia: Reform of the pensions system and implementation of conditional cash transfers
Following intense debates, the Bolivian government introduced major reforms to the Bolivian pensions system, which were gradually implemented in early 2008.
Full article >> ISSA Country profile: Bolivia >>
Brazil: Extension of family social transfer programme during global financial crisis
Brazil has announced the extension of Bolsa Família, a national family cash-transfer programme, to an additional 1.3 million poor families by the end of 2009.
Full article >> ISSA Country profile: Brazil >>
Canada: Quebec provincial government guarantees benefits of insolvent pension plans
(Source: SSA) Attempting to mitigate the effects of the financial crisis on Quebec pension plans, the provincial government of Quebec on January 15 passed a law temporarily guaranteeing benefits to workers and pensioners of companies with insolvent pension plans
Full article >> ISSA Country profile: Canada >>
Cuba: A new social security law
(Source: SSA) Cuba's new social security law, effective January 22, phases in major changes to retirement rules over a seven-year period.
Full article >> ISSA Country profile: Cuba >>
Ecuador: Improvement in benefits adjustment and creation of a minimum pension
(Source: SSA) Ecuador's National Assembly March 10 passed a number of amendments to its Social Security Law.
Full article >> ISSA Country profile: Ecuador >>
Finland: Employer contributions to universal pension programme lowered
(Source: SSA) Finland's January 2009 supplemental budget gradually eliminates employer contributions to the universal pension programme (KELA) and increases employee and employer contributions to the earnings-related pension programme (TyEL).
Full article >> ISSA Country profile: Finland >>
Gambia: Reorganization of the Social Security and Housing Finance Corporation
In 2008, the social security department of the Social Security and Housing Finance Corporation (SSHFC) was restructured.
Full article >> ISSA Country profile: Gambia >>
India: Recent initiatives in the Employees' State Insurance Corporation
The Employees' State Insurance Act provides social protection for workers in the organized sector against contingencies such as sickness, maternity and death or disability due to work injury.
Full article >> ISSA Country profile: India >>
Ireland: Levy on public employee wages to help finance public-sector pensions
(Source: SSA) A new levy on public employee wages went into effect March 1 to help finance public-sector pensions.
Full article >> ISSA Country profile: Ireland >>
Israel: Pension safety net to compensate voluntary pension plan losses
(Source: SSA) The Israeli government January on 13 approved a pension safety net compensating certain workers who are nearing retirement and lost money in voluntary employer-sponsored pension plans since November 2008.
Full article >> ISSA Country profile: Israel >>
Japan: Establishment of the Japan Health Insurance Association
As of 1st October 2008, the Japan Health Insurance Association (JHIA), as a public organization, was established, and has taken over responsibly for operating compulsory Public Health Insurance scheme (PHI), which was formally carried out by the Social Insurance Agency (SIA) and covers mainly employees (approximately 19.8 million) in small and midium-size companies and their families.
Full article >> ISSA Country profile: Japan >>
Malaysia: Provisions to increase benefits and extend coverage
(Source: SSA) Malaysia implemented a number of changes to the Public Service Pension Scheme (PSPS) for public-sector employees and retirees that increase benefits and broaden coverage.
Full article >> ISSA Country profile: Malaysia >>
Mali: Toward the introduction of compulsory health insurance and basic medical aid
At the beginning of 2009, the Mali government adopted draft legislation concerning two projects, one to introduce compulsory health insurance (AMO) and the other to provide medical aid (RAMED) for the poor.
Full article >> ISSA Country profile: Mali >>
Netherlands: Recovery period for underfunded pension funds extended
(Source: SSA) The Dutch government February 20 announced a temporary extension of the recovery period permitted for underfunded pension funds to bring their coverage ratios - the ratio of assets to pension liabilities - up to the 105 percent minimum ratio required by law.
Full article >> ISSA Country profile: Netherlands >>
Russian Federation: National anti-crisis programme submitted by Government for public discussion
The Government is planning to substantially step up the use of all available instruments of economic and social policy within the framework of a comprehensive anti-crisis programme. The Programme defines some major economic and social priorities for the Government's action.
Full article >> ISSA Country profile: Russian Federation >>
Uganda: New date for Implementation of a Social Health Insurance Scheme
In the past three years, the implementation of the long-awaited Social Health Insurance Scheme has been postponed on various occasions, in order to ensure proper preparation and execution. In early 2009, the Ugandan cabinet passed another resolution to introduce compulsory national health insurance as of July 2009.
Full article >> ISSA Country profile: Uganda >>
Uruguay: New provisions to make public pension more accessible to workers
(Source: SSA) Uruguay implemented most provisions of a new flexible retirement law providing more workers access to a public pension.
Full article >> ISSA Country profile: Uruguay >>
Uruguay: New system of family allowances
The principal objective of the New Family Allowances Scheme (NRAF), introduced in 2008, is to extend coverage and to improve the adequacy of benefits, by focusing on children and adolescents in vulnerable socio-economic households.
Full article >> ISSA Country profile: Uruguay >>
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Good practices in social security
Transnational management systems for social security agreements: The case of MERCOSUR
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Worker mobility is an increasingly important phenomenon, resulting in the implementation of social coverage services at an international level. These services require the signing of agreements between countries as well as the application of processes to manage the benefits granted.
In South America, the MERCOSUR countries (Argentina, Brazil, Paraguay and Uruguay) have introduced a system to manage the pension requests of individuals who have worked in these countries.
The system, known as SIACI (the International Agreements System) (1), manages a part of the pensions request process, which is governed by the terms of a multilateral agreement. The system enables individuals to carry out these procedures in their country of residence and it communicates electronically with the social security institutions of the countries where they were employed to obtain the necessary information to process their requests.
The functions of the system are organized into 5 modules: (i) management of requests; (ii) data transmission between institutions; (iii) digital signature of the information and its validation; (iv) record of operations (“traceability”); (v) reports of operations undertaken.
The SIACI architecture conforms to a “federation” model of the participating institutions, and is based on their information systems and articulates the exchange of essential data.
This system was developed through a joint project involving the social security institutions of the four countries (2) and the Ibero-American Social Security Organization (OISS), which was the project leader and responsible for managing common information. Strong coordination was maintained throughout the project between the users and the ITC technicians in the respective countries. The programming was undertaken by Dataprev (Brazil) and based on an Open Source (3) platform.
The SIACI system has been operational since September 2008 and extensions are planned. In the future, it is envisaged that the management of payments will be added to the system.
The implementation of these kind of systems implies solving various key aspects:
- The model of information and format of data common to the institutions, particularly for the identification of beneficiaries;
- The functionalities to be provided, based on each institution’s processes and user requirements;
- Assurance of the authenticity of the operations undertaken and the information provided in these operations;
- An architectural framework and technologies that ensure the compatibility of the objectives of interconnecting institutions with the policies, standards and restrictions of each institution; - Extendibility of the system, to be able to easily integrate changes in Social Security agreements.
The SIACI resolves these aspects by applying an extendible modular design, which is based on the latest generation of standard technologies. The distributed-federative model enables the information privacy norms of each institution to be respected and existing systems to be used. The information is exchanged in XML (4) archives and communications are based on “Web Services” (5). Beneficiary identification is managed by the institutions of each country and the SIACI establishes the correspondences between them. The information transmitted is digitally signed by users, using external measures with processing capacity (tokens or smart-cards).
As regards the impact on social security services, SIACI has significantly improved the management of pension requests based on international agreements in MERCOSUR, providing consistency and reliability to this process.
Lessons learned
The implementation of SIACI has provided some extremely valuable experiences and lessons.
The early decisions on the architecture, the completion of the architecture, the information model, the functionality and technologies are key to the quality of the product and its implementation. In addition to providing quality to the system, these factors also have a significant impact on the maintenance, development and compatibility of the system with the institutions’ platforms, and the potential for replication.
As regards the system’s operation, key to the results are the training activities undertaken with users, particularly in new technologies such as digital signatures, and the contact between civil servants in the different countries. Similarly, the results are also linked to the provision of support services to both users and technicians in the different institutions.
Replication
It is highly possible to replicate this type of system and experiences; it is also feasible to reuse elements of the system. The most direct replication scenario is where international agreements exist with similar rules and information models.
In a scenario of international agreements with different information models, it is possible to reuse the transmission modules, the management of digital signatures and the management of operations’ records. This, however, would require a modular design and the use of standard technologies.
As regards the SIACI information model (data required to manage benefits), this model, together with the formal XML specification, are particular interesting to replicate.
Finally, in scenarios where these conditions are not met, it is possible to replicate the development process and the design criteria.
The MERCOSUR countries have introduced an ICT based system to manage migrant workers’ benefits which has not only improved the management of benefits but has also provided some interesting experiences for all the institutions.
(1) For further details, please consult the ISSA Good Practices in Social Security Database. In 2009, the ISSA Good Practice Award for the Americas was given to the National Institute of Social Security, Brazil, for its contribution to the development of the SIACI system.
http://www.issa.int/aiss/Observatory/Good-Practices
(2) ANSES from Argentina, INSS and Dataprev from Brazil, IPS from Paraguay and BPS from Uruguay.
(3) JBoss was used as the Applications Server and PostgreSQL as the database driver.
(4) Extensible Markup Language. http://www.w3.org/XML/. (5) SOAP and Web Services: http://www.w3.org/TR/wsdl.
Good Practices database
For the ISSA, a good practice is defined as any type of experience (e.g. an action, a measure, a process, a programme, a project, a technology) implemented within a social security organization that is focused on the improvement of administrative and operational capacities and/or the efficient and effective delivery of programmes. In November 2008, a new database on good practices in social security was launched by the ISSA, with the aim of providing a unique source of data on developments in social security practice.
http://www.issa.int/aiss/Observatory/Good-Practices
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International award recognizes Brazil and Mexico for social security good practices
ISSA Good Practice Awards - Americas 2009
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The ISSA Good Practice Award was granted to the National Institute of Social Security, Brazil, for its contribution to the development of a transnational data exchange system, and to the Mexican Social Security Institute for the introduction of a performance management system.
The international Jury also awarded 24 certificates of merits, seven of which received a special mention, in the second of the regional Good Practice Award competitions organized by the ISSA.
Congratulating the winners, the ISSA Secretary General, Hans-Horst Konkolewsky, said “The diverse submissions to the competition demonstrate the dynamic and innovative approaches of ISSA members in the Americas, which are of particular importance during this period of pressure on social security resulting from the financial and economic crisis.”
The Good Practice Award for the Americas was given to the following entries:
The National Institute of Social Security, Brazil, for its contribution to the development of the International Agreements System (SIACI) which enables the electronic exchange of information and management of pension claims among social security institutions in the MERCOSUR member states.
The Mexican Social Security Institute for its Model for Evaluation and Strengthening of Executive Skills for Competitiveness, which aims to strengthen executive competencies and improve institutional services and performance.
The Jury gave certificates of merit with special mentions to the following entries:
- Anguilla: Anguilla Social Security Board for Transparency and Accountability: Good governance at the Anguilla Social Security Board.
- Costa Rica: Social Insurance Fund of Costa Rica, for Strategic alliances for change management.
- Ecuador: Ecuadorian Social Security Institute, for Governance and leadership in health-care provision.
- Guatemala: Social Security Institute of Guatemala, for Financial modernization of social security.
- Mexico: State Employees’ Social Security and Social Services Institute, for Global health care for senior citizens.
- Saint Kitts and Nevis: Social Security Board, for A broad-based strategy to the management of the Social Security Board. - USA: Social Security Administration, for Accessibility Best Practices Portal.
Certificates of merit were also awarded to institutions from Argentina, Brazil, Colombia, Guatemala, Mexico, Peru and Saint Vincent and the Grenadines.
The ISSA Good Practice Award will be presented at the Regional Social Security Forum for the Americas, in Mexico (dates to be confirmed).
The complete competition results, a description of the winning entries of the ISSA Good Practice Awards for the Americas, and access to a database of social security good practices from around the world, are available on the ISSA Web portal: www.issa.int/goodpracticeamericas.
The Good Practice Award programme was launched by the ISSA in 2008 to recognize good practices in the management of social security, and to raise the profile of improvements and innovation in the administration, operations and delivery of social security programmes. The Awards are presented on a regional basis in connection with the ISSA Regional Social Security Forums over a three-year cycle, and will be featured at the World Social Security Forum, in Cape Town, South Africa, in 2010.
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Tackling the global jobs crisis: Recovery through decent work policies
Report of the ILO Director-General to the 98th International Labour Conference
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The Financial and Economic Crisis: A Decent Work Response
New publication by the International Labour Organization’s International Institute for Labour Studies
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This report examines policy packages announced in over 40 countries to overcome the global economic crisis. It shows that not enough has been done to reduce the risk of a labour market recession of unprecedented proportions since the Second World War. And it provides an analytical foundation for a global strategy centered around jobs and social protection as crucial drivers of the recovery.
Download and additional information (external link)
http://www.ilo.org/public/english/bureau/inst/publications/books.htm
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Joint Report on Social Protection and Social Inclusion 2009
New report by the European Commission
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The Joint Report examines the EU Member States' integrated national strategies on social inclusion, pensions, healthcare and long-term care. It reviews the main trends across the EU and at national level and is the outcome of a process involving the European Commission and the Council of the European Union.
Download and additional information (external link)
http://ec.europa.eu/employment_social/spsi/joint_reports_en.htm#2009
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Private Pensions Outlook 2008
New publication by the Organisation of Economic Co-operation and Development
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This is the first edition of Private Pensions Outlook, a new OECD publication that guides readers through the changing landscape of retirement income provision. This edition presents a special feature on the implications of the financial crisis for private pensions, as well as in-depth, international analyses of private pension arrangements across OECD and selected non-OECD countries. The publication focuses on the role of pension funds, and also provides evidence on public pension reserve funds which complement the financing of social security system.
Download and additional information (external link)
http://www.oecd.org/daf/pensions/outlook
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ICT projects transform social security organizations, but pose new challenges
International conference looks at role of new technologies in client-oriented services
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A global meeting of social security specialists has heard how information and communication technologies (ICT) are transforming public organizations and their delivery of services in all regions, but that new developments can be accompanied by significant new risks.
“Investment in information systems and ICT infrastructure allow improvements in social organization, economic activity, well-being and access to information and knowledge that is without precedent in the history of humanity,” said Juan Carlos Yelmo García, Doctor of Telecommunications at the Polytechnic University of Madrid.
But Dr. García warned that the increasing sophistication of systems was accompanied by new challenges. “The continuing growth in the complexity of systems and technologies is increasing the risk that mismanagement of the technological infrastructure is imposed on, and eventually collapses, processes, companies, organizations and social structures that in principle they should promote and sustain,” he said.
The remarks were made during the 12th International Conference on Information and Communication Technology in Social Security which took place in Seville, Spain, 3-5 June 2009, organized by the ISSA and hosted by the National Institute of Social Security (INSS).
The conference, which is organized every three years by the ISSA, gathered over 300 senior managers and ICT specialists, and discussed the theme ICT as a strategic management tool: A basis for dynamic social security. The event was opened by Octavio Granado, State Secretary for Social Security of Spain. Mr. Granado highlighted the strategic importance of ICT for both national and transnational social security services, giving examples from several Spanish and European initiatives. Representatives of the Government of Andalusia welcomed the participants.
Keynote speakers and panellists discussed a range of issues facing social security organizations in the area of information and communication technology, including the transformation of services and delivery; decentralization and security risks; and improving performance standards and information to citizens.
Social change and technological process
Social security organizations are facing the related challenges of social change and technological process, the ISSA Secretary General, Hans-Horst Konkolewsky, reminded participants.
“The information age has changed society. Citizens have greater expectations, and this necessitates a shift in the culture of governments. In response to changing public expectations and the complexity of public needs, organizations delivering social security must embrace transformation initiatives. These transformations increase the role of technology but must at the same time emphasize coherence in programme services and benefit delivery,” he said.
Integration for better social services
Opening with a dramatic account of a failure of social services to assist a highly vulnerable family, Clarence Carter, Director of the Department of Human Services of the Government of the District of Columbia (USA), recalled that social services, and the systems that they develop, are, above all, to serve people in need. When services work in “silos”, or are too focused on a single objective, he said, it is possible for people to “fall through the safety net”.
Mr. Carter described how a review triggered by this tragedy identified fundamental design flaws in the social safety net, with diverse programmes too focused on single objectives and lacking coordination. The review resulted in the development of integrated operating processes across a range of social service programmes and agencies.
“During the past decade, technological advances have increasingly allowed disparate information systems to be joined in order to provide better outcomes for those served. Employing these emerging technological tools provides a foundation for the District’s transformation efforts. The result will be to link the disparate information systems into a powerful tool that allows the agencies to operate as a multi-disciplinary team jointly focused on human well-being,” Mr. Carter concluded.
Connecting systems
The conference heard case studies from all regions that confirmed the rapid development of new forms of interoperability at the national and transnational levels.
In South America, social security organizations from the MERCOSUR member states (Argentina, Brazil, Paraguay and Uruguay) developed a system to manage the pension requests of individuals in a context of growing worker mobility by connecting information systems and enabling the exchange of essential data across borders.
In 2004, France’s Ministry of Social Affairs launched a project to enable inter-operability of systems among social security institutions. The project built on mutual confidence among the institutions to apply common and secure standards, with decentralized authentification, to enable an integrated approach to service delivery.
The recent “Panchdeep” project, implemented by the Employees’ State Insurance Corporation, is one of the largest e-Government projects in India, and the system will allow the sharing of data and the inter-connection of services with a potential impact on over 50 million people.
In Côte d'Ivoire, the introduction of a centralised identification system by the Social Insurance Institute - National Social Insurance Fund, combined with an improved data-sharing network among the country's offices, allows people to receive payments from the location of their choice. The new service possibilities were of critical importance for many clients during the period of civil tensions in the country.
Thriving in a weak economy
ICT can also enable innovation and higher performance, and, despite the challenges, the current economic crisis provides an opportunity for social security organizations to improve their services, according to Chris Gibbon, Vice-President and Partner, Global Social Segment IBM (UK).
“With new ways of thinking about client needs and programme design, and new methods of service delivery and administration; administrators can enhance existing programmes and services as well as create innovative new approaches to position their organizations for long-term success. Innovation is not only possible in a weak economy, it’s essential,” Mr. Gibbon said, giving the example of increased segmentation to better serve clients.
But he warned that new technologies alone will not enable access to services. “If social programmes are to succeed at making information easily accessible to their clients and their staff, they will need to go beyond special technologies that facilitate accessibility and look to universal technologies that are easy to use… for everyone,” he said.
Looking to the future, Fidel Ferreras Alonso, Director General of the INSS and Chairperson of the ISSA Technical Commission on Information and Communication Technology, underlined how the information society is transforming not only the operations of institutions, but also the ways in which citizens relate to their administrations. He confirmed that the ISSA will continue to give high priority to ICT issues in its programme, and particularly to the sharing of good practices among social security institutions in this area.
ICT - putting the person first
“New levels of interoperability, standardization and security will be needed by social security organizations if we are to achieve greater integration and customer-orientation of services,” said Yannick D’Haene, Director of the ISSA’s Social Security Observatory, calling for a person-centred approach to new technologies.
“A realistic assessment of risks and constraints, and a proactive approach focused on a clear vision of the needs of people, will ensure that social security organizations can remain at the forefront of the transformation of service delivery to the public,” Mr. D’Haene concluded.
More information: www.issa.int/ICT2009
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Major ISSA Events 2009-2010
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In 2009 and 2010, the ISSA is organizing the following major events:
16th International Conference of Social Security Actuaries and Statisticians
16.09.2009 - 18.09.2009 | Ottawa, Canada
Regional Social Security Forum for Asia and the Pacific
21.10.2009 - 23.10.2009 | Manila, Philippines
Regional Social Security Forum for Europe
01.03.2010 - 05.03.2010 | Warsaw, Poland
Regional Social Security Forum for the Americas
Date to be confirmed | Veracruz, Mexico
International Policy and Research Conference on Social Security
29.09.2010 - 01.10.2010 | Luxembourg
World Social Security Forum
29.11.2010 - 04.12.2010 | Cape Town, South Africa
More information on upcoming ISSA events >>
Information on other social security events >>
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