UN report says problems of ageing population exaggerated

The Geneva-based United Nations labour agency has published a book detailing the state of the world's social security and pensions systems. The author suggests the problem of ageing populations is exaggerated.

This content was published on April 27, 2000 minutes

The Geneva-based United Nations labour agency has published a book detailing the state of the world's social security and pensions systems. It outlines how western countries should deal with their ageing populations, although its authors suggests the problem is exaggerated.

The timing of the report, 'Social Security Pensions - Development and Reform', is important, coming as it does at a time of great upheaval in social security pension schemes throughout the world.

"In retrospect the 1980s and 1990s may appear as one of the great watersheds in the development of social policy," the report by the International Labour Office says. "A large number of countries are at present contemplating, planning or implementing major changes to their existing schemes of retirement protection."

The ILO says the aim of the book is to provide reference material to those governments undertaking such reforms or those establishing pension schemes for the first time. Controversially, it also has a more prescriptive purpose.

"It is concerned with making the right choice of policy," it says.

The book is appearing at a time when most western countries are concerned about how their pension schemes are going to cope with their ageing populations. It is estimated that by 2030, a third of the population of OECD member countries will be over the age of 60 - nearly double the current rate. This is going to require a comparable increase in benefit expenditure.

However, the authors of the report believe the problem of an ageing population has been exaggerated and that there is no need to panic.

"These countries shouldn't be too frightened by the ageing prospect, so long as they can increase the participation of women in the labour force and raise the retirement age," Colin Gillion, one of the authors said. "And since people are living longer, that shouldn't be too much of a problem."

"It's going to require a recasting of attitudes regarding different kinds of dependence. But don't forget, by the time the ageing bulge comes, we are all going to be significantly better off. I don't think there's any very great scare to be had," Gillion said.

The ILO believes the growing ranks of the elderly will not require an increase in the level of contributions: "The contributions made by older workers who continue past the retirement age and by the growing number of working women will offset a good proportion of the additional costs," according to Gillion.

In most countries - Switzerland included - there is a heated debate between the left and the right about what to do with their embattled pension schemes. The ILO says it recognises the growing feeling in OECD countries that some governments have been overburdened or even overgenerous when it comes to pensions, and that individuals should take more responsibility.

"Our view is that there's an element of truth in this. But governments need to ensure that the ratio of income people receive in retirement in relation to their working wage is a reasonable one, and that people should have a pension that lifts them out of poverty, whatever their contribution to history," Gillion said.

by Roy Probert

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