Nearly half of world’s elderly lack pension: ILO

September 30, 2014 1:21 pm
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Only 48 percent of people over retirement age worldwide receive a pension, the UN's labour agency said in a report/XINHUA-File
Only 48 percent of people over retirement age worldwide receive a pension, the UN’s labour agency said in a report/XINHUA-File
GENEVA, Switzerland, Sep 30 – Nearly half of the world’s elderly receive no pension, while many of those who do receive too little and are widely seeing their benefits slashed, the International Labour Organization said Tuesday.

Only 48 percent of people over retirement age worldwide receive a pension, the UN’s labour agency said in a report.

And “for many of those who do receive a pension, pension levels are not adequate,” it said.

The result, according to study author and head of ILO’s Social Protection Department Isabel Ortiz, is that “the majority of the world’s older women and men have no income security.”

After a lifetime of hard work, these people “have no right to retire and have to continue working as long as they can, often badly paid and in precarious conditions,” she said in the 150-page study on social protection for older persons.

The report, which looked at pension systems in 178 countries, found that middle and low-income countries have in recent years been rapidly expanding pension coverage through a mix of public, tax-financed and private contributory systems.

More than 45 countries have reached 90 percent pension coverage and more than 20 developing countries, including China, have basically achieved universal pension coverage, it said.

Ortiz described this as “a very positive trend,” but stressed that “as important as expanding coverage, is guaranteeing adequate pension benefits.”

“Older men and women have a right to retire in dignity, without falling into poverty,” she said.

Globally, countries on average spend 3.3 percent of their gross domestic products on pensions for people above retirement age, generally set around 65.

But public spending on pensions range from just zero to two percent in low-income countries to 11 percent in higher-income western Europe, the study found.

But crisis-hit countries in Europe and elsewhere have in recent years been reining in their pension budgets in the name of fiscal austerity, among other things raising the retirement age and cutting benefits.

“These adjustments are undermining the adequacy of pension systems and reducing their ability to prevent poverty in old age,” the report warned.

“It is alarming that future pensioners will receive lower pensions in at least 14 countries of Europe,” it said.

Cuts to pension benefits, along with persistent unemployment, lower wages and higher taxes “have contributed to increases in poverty or social exclusion, now affecting 123 million people in the European Union, or 24 percent of the population,” the report said.

It lamented that the austerity measures were eroding the European social models that had helped dramatically reduce poverty across the continent since World War II.

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