The first-ever left-wing coalition government in the history of Uruguay came into power in 2005. One major reform introduced by this government is Law 18.227 on the New Family Allowance Scheme (NRAF), which supersedes Laws 17.139 and 17.758. Through targeting children and adolescents from vulnerable socio-economic households, the objective of the new law implemented in 2008 is to significantly improve welfare by extending coverage and improving the adequacy of benefits paid. Initial evidence shows that progress has been made toward achieving this important objective.

The need for reform

Between 1999 and 2002, Uruguay experienced a severe economic recession that resulted in an 18 per cent loss in GDP and a sharp increase in poverty levels. In 2004, approximately 32 per cent of the population was living in poverty (according to national statistics; 25 per cent according to CEPAL (Comisión Económica para América Latina y el Caribe); levels which were unprecedented for Uruguay. Moreover, the distribution of poverty by age group for the years 2004 and 2007 reveals that the highest poverty levels were among children younger than age 18; a phenomenon known as the “juvenilization” of poverty. In contrast, poverty levels were lowest among senior citizens aged 65 or older (see Figure 1). This observation can be partly explained by the fact that 95 per cent of this older age cohort receives either a retirement pension or an old-age benefit.

The New Family Allowance Scheme (NRAF)

Since 2000, two family allowance schemes have co-existed: the traditional scheme for formal workers (Law 15.084 of 1980) and the scheme for low-income households (Law 17.139 of 1999 and 17.558 of 2004, which are now superseded by Law 18.227 on the NRAF).

The NRAF complements existing social security instruments and provides coverage to beneficiaries irrespective of whether the head of the household is in informal or formal employment. Adopted in 2007 and implemented on 1 January 2008, the initial aim of the scheme was to provide coverage to approximately half of all children and adolescents in Uruguay. By December 2008, 99.4 per cent of the target objective for the year had been reached, with coverage extended to 327,916 children and adolescents. As a next step, the objective is to raise coverage to 500,000 by the end of 2009.

It is to be hoped that the NRAF will provide added impetus to the observed trend that has witnessed total coverage under family allowances programmes increase. As Figure 2 illustrates, coverage for the period 1999 to 2007 has increased by 58 per cent.

Despite the growth of coverage, the longer-term challenge remains one of realizing significant and lasting reduction in levels of child poverty. Positively, in 2006 and 2007, the overall poverty level dropped sharply as a result of the various public and social polices implemented by the new government. It continued to fall in 2008 and has stabilized at 21.3 per cent of the total population. However, child poverty has not been eradicated.

Despite this increase in coverage over the period 1999-2007, and notwithstanding positive results in terms of reduced measures of the intensity and severity of poverty over recent years, it is clear that the overall positive impact on the incidence of child poverty could have been greater if benefit levels were more generous.

Defining the NRAF target population

To be eligible for the NRAF, vulnerable socio-economic households are assessed independently of the formal or informal employment of the head of household or guardian. They must satisfy stipulated statistical criteria developed in collaboration with the University of the Republic of Uruguay. These criteria include: household income (the single determining factor in previous normative standards), living and environmental conditions, the composition of the household, the characteristics of the family members that make up the household, and state of health. In practice, the assessment is made using an algorithm, which estimates the probability of the household falling into the target population. Beneficiaries are also required to satisfy the following conditions: children and adolescents must attend school and undergo health check-ups.

Improving child welfare

The NRAF reform has substantially increased the amount of benefit paid (generally by 80 per cent; however, in several sectors, by as much as 300 per cent) to households. Benefits vary according to the number of children per household and are calculated using a scale of equivalence. Additional benefits are paid for each child or juvenile who satisfies the educational criteria (equivalent to USD 35 per month for the first child in primary education and USD 50 for the first child in secondary education) with the objective of reducing the number of children who fail to complete formal education.

Figure 3 provides a comparison of the average benefit paid per child in US dollars before and after the introduction of the NRAF:

More recent public and social policy reform in Uruguay

The new Government in Uruguay adopted the National Plan for Social Emergency Assistance (El Plan Nacional de Atención a la Emergencia Social (PANES)) in 2005, which was aimed at fighting against extreme poverty and ended in 2007. PANES was characterized by a coordinated network of promotional and income transfer programmes, which mainly targeted low-income households with several children. PANES was managed by the Ministry of Social Development (Ministerio de Desarrollo Social (MIDES)), which was created by the present government, and was successful in meeting its objectives.

As from January 2008, the government adopted the Equity Plan, whose role is to modify the balance of social protection to better address the evolving nature of risks within the country (The NRAF is one of the Equity Plan’s network of social integration assistance programmes). One key measure of the plan is a substantial increase in budgets to support social policies to improve the situation of children and adolescents. For instance, budgets for national health care and education have tripled, covering the provisions for the reforms introduced by the NARF.

As from mid-2007, an ongoing extensive National Dialogue on Social Security, which began at the government’s instigation and with the full participation of all sectors of society, has concluded important agreements, with a large majority becoming social protection laws already in force or to be implemented in 2009. The NRAF is one example of this.

The ultimate objective of the Government of Uruguay is to build a new social protection system based on the social reforms that have already been implemented and those that are still being discussed. The new system will improve the welfare of Uruguayan citizens through the extension of social security coverage, integration, inclusion and social justice polices.

Of note, the participation of Uruguay’s social security administration, the Social Insurance Bank (BPS), in the design and implementation of these new policies, has resulted in a significant reduction of administrative costs for the government.

Amongst other aims, public policies in the last few years have sought to promote labour reforms (via tripartite collective bargaining for all sectors of activity and other normative standards), create a new national integrated health care system, and implement tax and social security reforms.

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.

Cameroon: Extension of social security cover

On 4 November 2008, an Inter-Ministerial Committee on the modernisation of the social security system was formed in order to reflect upon the implementation of practical measures to extend and improve social security system in Cameroonian.

Full article >>

ISSA Country profile: Cameroon >>

The People's Republic of China: Addressing social impacts of the crisis

China's State Council issued on 3 February 2009 a 26-point special notice that urged government at all levels to adopt proactive policies to boost employment and enhance social protection.

Full article >>

ISSA Country profile: The People's Republic of China

Cuba: Retirement age increased

In accordance with the new Social Security Law, implemented in the beginning of 2009, the general retirement age for entitlement to a full old-age pension has been set at 65 years for men, increased from 60 years, and 60 for women, increased from 55 years.

Full article >>

ISSA Country profile: Cuba >>

Gabon: Launch of mandatory health insurance in Gabon

On 22 January 2009, Gabonese citizens deemed as being "economically weak" and living in Mouila were entitled to join the medical coverage system provided for by the National Health Insurance and Social Insurance Office (CNAMGS). The implementation of this project owes its success to the earlier finalisation of an agreement between Mouila Regional Hospital and the pharmaceutical service providers for the town.

Full article >>

ISSA Country profile: Gabon >>

Germany: A law to reform statutory accident insurance

In mid-2008, the German Bundestag (Parliament) adopted the Law on the Modernization of Statutory Accident Insurance (Unfallversicherungsmodernisierungsgesetz - UVMG). The main aims of this reform are to adapt organizational arrangements to changing economic structures, to solve the problem of inherited obligations (Altlasten) and to modernize administrative structures. The following text deals with certain aspects involving employers.

Full article >>

ISSA Country profile: Germany >>

Kenya: Expansion of coverage for low-cost private health insurance

According to data from the health management industry, while all salaried workers make contributions to the Government health scheme, only about 500,000 Kenyans belong to private schemes. A lack of sufficient public health care services drives higher-income earners to take out private health insurance, but traditionally high premiums due to inadequate actuarial data, fraud, and lack of standardization have prevented participation by those in lower income brackets. Recently, however, new low-cost private health insurance options have become available.

Full article >>

ISSA Country profile: Kenya >>

Republic of Korea: Basic old-age pension for needy seniors

A new basic old-age pension totally financed through general taxation was enacted in 2007 and implemented in 2008 in order to secure a stable livelihood for senior citizens facing economic difficulties.

Full article >>

ISSA Country profile: Republic of Korea >>

Morocco: A step towards benefits during the first six months of unemployment

The creation of job loss benefits seems to be moving towards implementation, several years after this idea was conceived. The Decree laying down the arrangements for the implementation of this benefit is ready and it is probable that the Employment Minister will approve it during the National Social Security Office (CNSS)'s Board of Directors. This body will be responsible for managing the new benefit.

Full article >>

ISSA Country profile: Morocco >>

Poland: Early retirement is over!

Numerous early retirement schemes, covering more than 1 million people, were finally abolished at the beginning of January 2009 when the Parliament rejected the President's veto and reconfirmed the abolition. As of 1 January 2009, retirement age of 65 years for men and 60 for women becomes the minimum retirement age.

Full article >>

ISSA Country profile: Poland >>

South Africa: Extension of child benefits to poorer families

South Africa provides the child support grant to children from birth to 15 years of age and is covering just over 8.3 million children. The grant is income-tested and its value is equivalent to USD 23 per month per child. The Ministry of Social Development has recently increased the income thresholds to allow more people to qualify for this grant.

Full article >>

ISSA Country profile: South Africa >>

Thailand: Reform of the pension system

The government was forced to defer the implementation of significant changes on several occasions and it plans to make a new pension system operational in 2009.

Full article >>

ISSA Country profile: Thailand >>

Thailand: Temporary reduction in salary-related contributions

Faced with the threat of a global recession and the downward review of forecasts for 2009 of national economic growth (the World Bank forecasts a 2 per sent growth rate, i.e., the lowest level since 1998), the Thai government approved a reduction in social security contributions on 30 October 2008.

Full article >>

ISSA Country profile: Thailand >>

Viet Nam: Unemployment insurance for Vietnamese workers

As of 1 January 2009, Vietnamese workers will be entitled to unemployment insurance provided for in the new legislation on social insurance. The funding will be shared equally (1 per cent of the salary) by the worker and the employer, as well as a contribution by the State. To qualify for this new benefit, the worker must have an employment contract with a term of 12 to 36 months or a permanent employment contract.

Full article >>

ISSA Country profile: Viet Nam >>

Realizing governance improvements in the effective and efficient administration and delivery of benefits sits high on the agenda of social security administrations in all countries. Recently, the importance of such governance improvements was confirmed by the submissions to the Good Practice Award competition for Africa, organized by the ISSA in 2008.

Underlying these developments in Africa are a combination of increased client expectations regarding the need for better-quality customer services and a desire to improve administrative tasks. In particular, attention is being directed at contribution compliance and collection and the timely processing of new claims. Beyond improving administrative performance, such measures also have more general positive knock-on effects, such as enhancing public confidence in, and legitimizing the credibility of, social security administrations.

For all institutions, governance improvements represent a set of common objectives. Of course, it is for each institution in each country to pursue a strategy appropriate to its own context and situation. Nonetheless, analysis suggests that there are a number of lessons to be shared with regards to “governance” good practices. For instance, one relates to efforts to enhance staff motivation with the aim of better ensuring quality service.

Staff motivation and performance measurement

Examples from Gabon and Ghana showcase that a targeted, tailor-made training programme and the introduction of a Professional Social Security Certificate can achieve positive results for service delivery. Client surveys reveal that staff motivation has increased rapidly in both cases, which positively impacted the payment of benefits and contribution collection to the satisfaction of all concerned. To build further upon achievements, some administrations have introduced an ongoing performance measurement system, not least to detect problems in processes and procedures at an early stage. In Ghana, branch assessment mechanisms were also put in place.

Another good governance element vis-à-vis the staff-stakeholder relationship is operational transparency. The innovative example of the “Clients’ Day” in Tanzania is one way to achieve this goal.(1) The National Health Insurance Fund, Tanzania (NHIF) introduced this regular event to enhance dialogue with stakeholders. The Clients’ Day permits NHIF stakeholders to be informed about major developments and changes that have occurred during the previous year. It also allows the NHIF to report, and to get regular feedback, on important issues, as well as to gauge perceptions about service-delivery in local areas. The Clients’ Day also aims to improve understanding of administrative standards and procedures, and to enhance the awareness of the insured about their rights and obligations. Measurable outcomes of the Clients’ Day include reduced stakeholder complaints, a reduction in the time required to process claims, and improvements in the timely payment of benefits.

Information and communication technology as a strategic priority

ISSA monitoring of social security good practices confirms that high-performing information and communication technology (ICT) systems can improve the quality of client services, while also modernizing procedures and working methods. Well-functioning ICT systems are conducive to the development of a quality culture and are regarded by many managers as a strategic priority.

In Africa, a number of social security administrations have introduced online services for clients. These services are developing to become more comprehensive and user-friendly. To ensure that these objective are realized, a new quality strategy may accompany such developments. In the case of Tunisia’s National Pension and Social Insurance Fund (Caisse nationale de retraite et de prévoyance sociale), a new quality strategy was implemented with a view, for example, to assessing competencies, defining procedures, separating incompatible tasks and introducing a control system capable of improving quality and reducing risks. Staff were involved in the project through a pilot committee and working groups that encouraged participation and ownership. As a result of the quality programme and its certification, and the accompanying training plan that was introduced, the credibility of the institution and staff motivation and skills were measurably improved.

Committed leadership and the right tools

With growing pressure on social security administrations to realize improvements in performance, a good practice approach to governance has become a strategic priority of management. The examples from the Africa region show that it is possible for an organization to significantly change its culture and service-orientation. The role of a committed leadership and the adoption of the right tools and methodologies are crucial in this respect.

The ISSA’s Dynamic Social Security conceptual framework, which aims to assist social security organizations in making decisions about the direction of their policy choices, emphasizes that governance is a key factor in realizing improved organizational performance and programme outcomes. According to resources and needs, it remains for each organization to tailor current good practice governance solutions to meet their own specific circumstances. Ultimately, as one manager has stressed: “The biggest lesson of all is that social security organizations can introduce new and effective practices and unlearn poor habits with the right management tools. It only takes good leadership, time and dedication.”

(1) For further information on improving service delivery in Tanzania, see: Hussein, K. 2008. “Understanding quality of service in a delayed gratification situation: The case of social security providers in Tanzania”, in International Social Security Review, Vo. 61, No. 2.

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

Good Practice Awards

The ISSA has initiated a Good Practice Awards programme to recognize good practices in the administration of social security. The second of four Good Practice Awards will be given at the Regional Social Security Forum for the Americas, 18-20 May 2009, in Veracruz, Mexico.

http://www.issa.int/News-Events/News/Focus-ISSA-Good-Practice-Awards-Americas

Debate about pension system adjustment has witnessed a move away from the one-size-fits-all blueprints that dominated discussions over a number of years. However, the financial and economic crisis has heightened the immediate challenges facing national pension systems – both private and public alike.

The ISSA's "International Social Security Review" is releasing a themed issue dedicated to “Pension system reform”, available in April 2009. The five articles in this issue analyse reform design and policy internationally as well as specific national approaches, and underscore that old-age pension reform is linked to international trends: declining fertility, increasing life expectancy, and retirement ages that have not kept apace with the latter.

As Nick Barr and Peter Diamond underline in the issue’s lead article, many pension systems were designed for an earlier era in terms of their contribution rates, monthly benefits and retirement ages. Another theme addressed is that pension system design often reflects embedded cultural values and societal relations, including gender relations, and reforming pensions thus implies reforming the same.

Different countries are confronted by distinct challenges, and this is subsequently reflected in their reforms. For many, coverage extension remains paramount. Yet, as the issue shows, extending coverage may first hinge on improving governance. Building on developments in the Americas, the international juncture implies revisiting the existing balance between funded and unfunded schemes in national pension systems. Overall, however, the issue suggests no weakening of the trend towards multi-pillar systems. Ultimately, the chosen pension reform path must be practicable for the country concerned.

International Social Security Review is published by the ISSA and available by subscription and online:

http://www.wiley.com/bw/journal.asp?ref=0020-871x

Article Abstracts

Volume 62 Issue 2 (April/June 2009)

The “X Component” in Shanghai’s Social Security Reforms

Gloria Davies, Ingrid Nielsen, Chris Nyland, Russell Smyth, Cherrie Zhu and Judith Zhu

In 2003, the Shanghai Bureau of Labour and Social Security launched the zhenbao (town insurance) programme, now widely known as 25 plus X. This scheme is regarded as an important experiment in social security reform and has been lauded for extending social security to areas where previously only segments of the population had mandatory coverage. Using data from 103,000 individuals enrolled in 25 plus X, we examine the extent to which the scheme represents an extension in social security coverage. Our analysis suggests that while it does represent an extension of benefits for some, for many it represents a considerable dilution in benefits.

Reforming pensions: Principles, analytical errors and policy directions

Nicholas Barr and Peter Diamond

This article sets out a series of principles for pension design rooted in economic theory: pension systems have multiple objectives, analysis should consider the pension system as a whole, analysis should be framed in a second-best context, different systems share risks differently, and systems have different effects by generation and by gender. That discussion is reinforced by identification of a series of widespread analytical errors – errors that appear in World Bank work, but by no means only in World Bank work: tunnel vision, improper use of first-best analysis, improper use of steady-state analysis, incomplete analysis of implicit pension debt, incomplete analysis of the impact of funding (including excessive focus on financial flows, failure to consider how funding is generated, and improper focus on the type of asset in trust funds), and ignoring distributional effects. The second part of the article considers implications for policy: there is no single best pension design, earlier retirement does little or nothing to reduce unemployment, unsustainable pension promises need to be addressed directly, a move from pay-as-you-go towards funding in a mandatory system may or may not be welfare improving, and implementation matters – policy design that exceeds a country’s capacity to implement it is bad policy design. We illustrate the ranges of designs of pension systems that fit the fiscal and institutional capacity constraints typical at different levels of economic development. The potential gains from simplicity imply that a country capable of implementing an administratively demanding plan does not necessarily gain from doing so. New Zealand has a simple pension system through choice, not constraint.

Pension system generosity and reform in Algeria, Morocco and Tunisia

Mehdi Ben Braham

Abstract Pension systems in the North African countries of Algeria, Morocco and Tunisia are facing a certain number of difficulties. Presenting the characteristics and organizational structure of each, this article identifies the specificities of, as well as the common problems confronting, these countries’ pension systems. With reference to authorizing legislation and case simulations, the high level of generosity of the different pension systems is discussed and an analysis presented. In a context of population ageing, it is argued that current levels of generosity cannot be maintained; reform is needed. The article discusses different reform options, the challenges of implementation and the possible macroeconomic impacts of reform.

Determining factors leading affiliates to transfer from an individual accounts pension scheme to a pay-as-you-go pension scheme: Evidence from Argentina

Vanesa Valeria d’Elia

Prior to the recent implementation of the Argentine Integrated Social Security System (SIPA – Sistema Integrado Previsional Argentino), the 2007 reform represented the first major change in Argentina’s old-age social security system since 1994. For the first time, workers contributing to the private defined-contribution individual accounts scheme were able to choose freely to move over to the public pay-as-you-go (PAYG) scheme. This study is an attempt to analyse the special characteristics of those who opted for transfer to the public PAYG scheme and to discover whether the behaviour of these individuals is in line with that of a “simulated worker” attempting to optimize income. The analysis includes an estimate of the probability that individuals with certain characteristics will transfer.

The gender impact of National Pension reforms in the Republic of Korea

Mi-young An

This article examines the gender impact of National Pension reforms in the Republic of Korea. In 2007, the Korean government introduced an income-tested basic old-age pension scheme paying flat-rate benefits. It also introduced credited pension coverage periods for child rearing and changed entitlement conditions for divorcees and widows and widowers. This paper examines the impact of these policy changes for individuals with shorter working lives and lower wages, for survivors and for the traditional social protection role played by the family in Korea. Findings indicate that the reforms have some positive features. However, the reforms still offer better value for those with higher earnings and an uninterrupted employment history, both of which are more characteristic of male workers. Moreover, the important income security role played by the family is still strongly embedded in the provisions and the protection available to survivors remains weak.

Despite strong economic growth that produced millions of new jobs since the early 1990s, income inequality grew dramatically in most regions of the world and is expected to increase due to the current global financial crisis, according to a new study published by the research arm of the International Labour Organization (ILO).

The report, entitled "World of Work Report 2008: Income inequalities in the age of financial globalization", produced by the ILO’s International Institute for Labour Studies also notes that a major share of the cost of the financial and economic crisis will be borne by hundreds of millions of people who haven’t shared in the benefits of recent growth.

“This report shows conclusively that the gap between richer and poorer households widened since the 1990s”, said Raymond Torres, Director of the Institute responsible for the report. “This reflects the impact of financial globalization and a weaker ability of domestic policies to enhance the income position of the middle class and low-income groups. The present global financial crisis is bound to make matters worse unless long-term structural reforms are adopted.”

The report notes that while a certain degree of income inequality is useful in rewarding effort, talent and innovation, huge differences can be counter-productive and damaging for most economies, adding that “rising income inequality represents a danger to the social fabric as well as economic efficiency when it becomes excessive”.

The report marks the most comprehensive study to date of global income inequalities by the Institute, and examined wages and growth in more than 70 developed and developing countries. It calls for longer term action to put the global economy on a more balanced track, including promotion of the ILO’s Decent Work Agenda to link economic, labour and social policies to boost employment and improve incomes and income distribution.

The report says that as global employment rose by 30 per cent between the early 1990s and 2007, the income gap between richer and poorer households widened significantly at the same time. What’s more, compared with earlier expansionary periods, workers obtained a smaller share of the fruits of economic growth as the share of wages in national income declined in the vast majority of countries for which data was available.

World of Work Report 2008: Income inequalities in the age of financial globalization, International Institute for Labour Studies. ISBN 978-92-9014-868-5. International Labour Office, Geneva, 2008.

Download and addional information (external link)

http://www.ilo.org/global/About_the_ILO/Media_and_public_information/Press_releases/lang--en/WCMS_099406/index.htm

In the last quarter-century, particularly the last 15 years, virtually all 20 countries of Latin America have reformed their social insurance health programmes, and most of them have undertaken structural reforms to privatize totally or partially their pension programmes, albeit with considerable differences in their models, scope, depth and speed. Around 2004, coverage in health programmes averaged 41 per cent of the total population (below the International Labour Organization/ILO minimum norm of 75 per cent), ranging from 7 to 34 per cent in 10 countries, and had stagnated or decreased in nine.

Coverage in pension programmes averaged 31 per cent of the labour force—26 per cent in private systems and 39 per cent in public systems (both above the ILO minimum norm of 20 per cent); however, this exhibited a declining trend. The transformation of the labour market toward increasing informality and flexibilization has had an adverse impact on coverage and the above-mentioned reforms, and past and current social insurance policies have not adapted to the changing labour market. This paper, divided into four parts, analyses the relationship between the labour market, social insurance (pensions and health) and coverage of the labour force and the population in Latin America.

The first part briefly describes changes in the labour market toward increasing informality and labour flexibilization that have resulted in jobs without social insurance coverage; examines the difficulties in incorporating the informal sector (self-employed, domestic servants, employees in microenterprises, and so on) and the rural population (including peasants); and identifies potential factors that could explain coverage differences between countries.

The second part evaluates the impact of external factors and the system itself, as well as reforms on various aspects of coverage: overall statistical coverage of both pension and health insurance programmes before and after the reforms; inequalities in coverage by income, gender, geographic area and indigenous peoples; and coverage of the poor by social assistance and the elderly by social insurance pensions.

The third part outlines policies to extend coverage to the excluded sectors, particularly informal and rural; compares divergent approaches of international and regional organizations (such as the ILO, International Social Security Association, Economic Commission for Latin America and the Caribbean, Pan-American Health Organization, World Bank and Inter-American Development Bank) and identifies common objectives; specifies policies to incorporate excluded groups and reduce inequalities by income, gender, geographic area and among indigenous peoples, and to protect the poor and the elderly.

The fourth part draws policy lessons from the Latin American experience for other developing countries.

Download (external link):

http://www.unrisd.org/80256B3C005BCCF9/(httpPublications)/6E08841FF30C8F83C125751200320B25?OpenDocument

A new report by the Accenture Institute for Public Service Value produced in conjunction with the International Social Security Association questions practices of traditional social security systems, which have centered largely on poverty alleviation, and emphasizes the need to tackle multiple disadvantages that are isolating people from society.

Titled Empowerment, Activation and Participation: Actively Engaging Disadvantaged People in Improving the Quality of their Lives, the report was undertaken to help social security institutions address multi-dimensional disadvantage, a phenomenon of growing dependence on social services by a segment of the population fueled by interconnected conditions such as ill health, disability, lack of skills and education, poverty and old age.

The report highlights how some social security institutions and other government entities have met the challenges posed by multi-dimensional disadvantage, citing examples of best practices from around the world.

The full report is available at http://www.accenture.com/socialsecurity >>

The latest issue of Social Policy Highlight takes a closer look at the rise of prevention as a social security policy priority, and calls on all social security institutions to become key drivers in building and maintaining national preventative cultures, beyond their traditional role in occupational safety and health.

ISSN 1818-5894
ISSN online 1818-5940
First published January 2009

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Social security: Instilling a culture of prevention?
(Social Policy Highlight 08)

The United Nations has designated 20 February 2009 as the first World Day of Social Justice. The World Day recognizes that society must be based on social justice, a respect for human rights and fundamental freedoms – and on the right to social protection for all.

Social justice has been at the heart of social security developments for more than a century. Social security systems protect people against the risks of life, thereby reinforcing social cohesion, stability and solidarity.

This concern for the social dimension has been shared by the International Social Security Association (ISSA) since its inception, as expressed in the ISSA's constitutional mandate, "to co-operate, at the international level, in the promotion and development of social security throughout the world in order to advance the social and economic conditions of the population on the basis of social justice."

Founded in 1927, shortly after the creation of the International Labour Organization (ILO), the ISSA’s agenda was closely linked with the ILO’s mandate, "moved by sentiments of justice and humanity as well as by the desire to secure the permanent peace of the world", to ensure the protection of the worker and the most vulnerable in society. The ISSA soon developed to become the main international platform for the coordination and mutual support of sickness insurance funds.

Social security and social values

The expanding concept of "social security" was first formalized in 1934 when the US Congress passed the Social Security Act pioneered by President Roosevelt. Arguing the case for social security, Roosevelt linked the right to security with a return to fundamental social values.

"These three great objectives - the security of the home, the security of livelihood, and the security of social insurance – (…) constitute a right which belongs to every individual and every family willing to work. This seeking for a greater measure of welfare and happiness does not indicate a change in values. It is rather a return to values lost in the course of our economic development and expansion," Roosevelt stated.

No social justice without social security

A decade later, the Preamble to the 1944 Declaration of Philadelphia, which reaffirmed the ILO's founding principles, states that "universal and lasting peace can be established only if it is based upon social justice," and affirms social security and social protection as "fundamental principles" for the work of the Organization – principles that were "a matter of concern to the whole civilized world."

In 1948, speaking at the ISSA Assembly, the Association's Chairman Václav Nĕmeček (Czechoslovakia), echoed this universal vocation of social security:

"The achievement of social justice is possible only in a world in which war has been banished, just as permanent peace can only be established on the basis of social justice. We must redouble efforts to generalise and perfect social security so that we can achieve unqualified security."

Social security as a fundamental right

In the post-war period, the development of social security was closely related to the concern for social justice, social cohesion and human rights. The 1948 Universal Declaration of Human Rights – the "foundation of freedom, justice and peace in the world" – explicitly names social security: "Everyone, as a member of society, has the right to social security and is entitled to realization (…) of the economic, social and cultural rights indispensable for his dignity and the free development of his personality," (Article 22).

Elaborating this principle, the ILO's Social Security (Minimum Standards) Convention, 1952 (No. 102) established worldwide-agreed minimum standards for social security. Other international and regional conventions have applied or, in some cases, strengthened, the minimum standards set out by the ILO, and have confirmed social security as a right and a condition for social justice.

In Europe in particular, specialized international instruments set social security standards as means of facilitating economic and social progress, and social security is embedded as a human right in the European Social Charter (1961, revised 1996).

"The underlying idea of these instruments," according to the former Council of Europe Director of Social Cohesion Gabriella Battaini-Dragoni, "is to promote a social security model based on social justice."

More recently, the ILO Declaration on Social Justice for a Fair Globalization, adopted in 2008, reiterates the extension of social security measures as a condition for promoting and achieving social justice.

Social security facing new challenges

Since the post World War II period, when most of the international instruments were adopted, the world has undergone profound changes, and social security systems face multiple challenges in both industrialised and developing countries.

A new economic paradigm that has sought to limit the role of the State, and the global financial crisis, demographic ageing and the lack of coverage in many countries require social security systems to adapt, while recognizing that social security alone cannot seek to resolve all social inequality.

A pillar of social justice in the modern world

In a context of economic globalization, and the accompanying pressures on labour costs, social protection systems - including social security - have proved resilient. They remain an "unparalleled instrument for making choices about justice and solidarity in society," according to Hans-Horst Konkolewsky, the ISSA's Secretary General.

"While social security must adapt and innovate in response to these new challenges, it is our duty to preserve and extend social security as a pillar of social justice in the modern world," Konkolewsky concludes.

Related (external links)

UN World Day of Social Justice >>

Publication: Social Justice in an Open World - The Role of the United Nations >>

In 2009, the ISSA is organizing the following major events:

Regional Social Security Forum for the Americas
18.05.2009 - 20.05.2009 | Veracruz, Mexico

Information and Communication Technologies Conference
03.06.2009 - 05.06.2009 | Seville, Spain

16th International Conference of Social Security Actuaries and Statisticians
16.09.2009 - 18.09.2009 | Ottawa, Canada

Regional Social Security Forum for Asia and Pacific
21.10.2009 - 23.10.2009 | Manila, Philippines

More information on upcoming ISSA events >>

Information on other social security events >>