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Pensions reforms have slowed in OECD countries but need to continue

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Further reforms are needed across OECD countries to mitigate the impact of population ageing, increasing inequality among the elderly and the changing nature of work, according to a new OECD report.

Pensions at a Glance 2017 says that public spending on pensions for the OECD as a whole has risen by about 1.5% of GDP since 2000. However, the pace of spending growth is projected to slow substantially. 

 At the same time, recent reforms will lower the incomes of many future pensioners. People will live longer and to ensure a decent pension would have to postpone the age of retirement.

“The challenges of financial sustainability and pension adequacy mean that bold action from governments is still needed,” said OECD Secretary-General Angel Gurría. “The world of work is changing fast and policy makers must ensure that decisions made today take this into account and our pension and social protection systems do not leave anyone behind in retirement.”

 The net replacement rate from mandatory pension schemes for full-career average-wage earners entering the labour market today is equal to 63% on average in OECD countries, ranging from 29% in the United Kingdom to 102% in Turkey. On average, replacement rates for low-income earners are 10 points higher and range from under 40% in Mexico and Poland, to more than 100% in Denmark, Israel and the Netherlands.

 Over the past two years, one-third of OECD countries changed contribution levels, another third modified benefit levels for all or some retirees and three countries legislated new measures to increase the statutory retirement age. Under legislation currently in place, by 2060 the normal retirement age will increase in roughly half of the OECD countries, by 1.5 years for men and 2.1 years for women on average, reaching just under 66 years. The future retirement age will range from 60 years in Luxembourg, Slovenia and Turkey to 74 in Denmark, according to the latest estimations.

 The projected increase in retirement ages will be exceeded, however, by expected advances in longevity, meaning that the time people spend in retirement will increase relative to people’s working lives. Employment at older ages will need to increase further to ensure adequate pensions for many people, according to the report.

 Pensions at a Glance 2017 also looks at ways countries can meet the growing calls for more flexible retirement options. Rigidly set retirement ages might not be beneficial for society as a whole. Currently, only around 10% of Europeans aged 60-69 combine work and pensions. Of those that do work beyond the age of 65, half work part-time — a share that has been stable since the 1990s. Several countries including Australia, the Czech Republic, France and the Netherlands allow for early partial-retirement schemes.

 Obstacles to combining work and pensions after the official retirement age exist, for example through earnings limits in Australia, Denmark, Greece, Israel, Japan, Korea and Spain. Barriers to continuing to work beyond the retirement age also exist outside the pension system, especially through age discrimination from employers or in cultural acceptance of part-time work.

 Overall, for people with full careers, retirement is more flexible around the retirement age in Chile, the Czech Republic, Estonia, Italy, Mexico, Norway, Portugal, the Slovak Republic and Sweden.

 Policy makers need to ensure that postponing retirement should be sufficiently rewarding while not overly penalising people who retire a few years before the normal retirement age. In Estonia, Iceland, Japan, Korea and Portugal, the financial incentives to continue working after the retirement age are large but costly for pension providers. Flexibility should be conditional on ensuring the financial balance of the pension system, with pension benefits actuarially adjusted in line with the flexible age of retirement.

 Pensions at Glance 2017 provides comparative indicators on the national pension systems of the 35 OECD countries, as well as for Argentina, Brazil, China, India, Indonesia, the Russian Federation, Saudi Arabia and South Africa.

 Country notes are available for Australia, Canada, France, Germany, Italy, Japan, Spain, Switzerland, the United Kingdom and the United States.

 A recent OECD report, Preventing Ageing Unequally, also analysed the impact of rising inequalities and population ageing. It found that younger generations will face greater risks of inequality in old age than current retirees and for generations born since the 1960s, their experience of old age will change dramatically relative to that of previous generations.

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International Labour Conference ends with adoption of key Convention and Declaration

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photo: ILO

The Centenary Conference of the International Labour Organization  (ILO) ended on Friday with the adoption of an unprecedented Convention and accompanying Recommendation  to combat violence and harassment in the world of work, as well as a Declaration  charting the way towards a human-centred future of work.

The ILO Centenary Declaration for the Future of Work, 2019 , is a reaffirmation of the relevance and importance of the ILO’s mandate in the changing world of work, a strong statement of intent, a mobilizing call, and a road map for action by the ILO itself.

“What we have adopted today is a roadmap, a compass to take us forward in the future of this Organization, because the future of work is the future of our Organization,” said ILO Director-General, Guy Ryder.

The Declaration looks to the future of work with a human-centred lens. It has a strong focus on enabling people to benefit from changes in the world of work, by strengthening the institutions of work to ensure adequate protection of all workers, and by promoting sustained, inclusive and sustainable growth and full and productive employment.

Specific areas for action identified include:

  • The effective realization of gender equality in opportunities and treatment
  • Effective lifelong learning and quality education for all
  • Universal access to comprehensive and sustainable social protection
  • Respect for workers’ fundamental rights
  • An adequate minimum wage
  • Maximum limits on working time
  • Safety and health at work
  • Policies that promote decent work, and enhance productivity
  • Policies and measures that ensure appropriate privacy and personal data protection, and respond to challenges and opportunities in the world of work relating to the digital transformation of work, including platform work.

UN Secretary-General António Guterres  joined some three dozen world leaders who, in the course of the two-week International Labour Conference (ILC), delivered strong messages of support for the ILO and its social justice mandate.

“You are carrying forward the torch that was lit one hundred years ago to help build a new world – a world based on social justice, founded on a model of inclusion – with governments, workers and employers at the decision-making table together,” Guterres said.

Guterres told delegates that the Declaration “marks an historic opportunity to open a door to a brighter future for people around the world.”

“The Declaration is ambitious – setting out the basis for delivering the ILO’s mandate in its second century. But the Centenary Declaration is much more than a statement of wishes or intent. The Declaration proposes a shift in the paradigm of how we look at development,” he said.

Guterres also welcomed the adoption of the Violence and Harassment Convention, 2019, which is accompanied by a Recommendation.

The Convention recognizes that violence and harassment in the world of work “can constitute a human rights violation or abuse…is a threat to equal opportunities, is unacceptable and incompatible with decent work.” It defines “violence and harassment” as behaviours, practices or threats “that aim at, result in, or are likely to result in physical, psychological, sexual or economic harm.” It reminds member States that they have a responsibility to promote a “general environment of zero tolerance”.

The new international labour standard aims to protect workers and employees, irrespective of their contractual status, and includes persons in training, interns and apprentices, workers whose employment has been terminated, volunteers, jobseekers and job applicants. It recognizes that “individuals exercising the authority, duties or responsibilities of an employer” can also be subjected to violence and harassment.

The standard covers violence and harassment occurring in the workplace; places where a worker is paid, takes a rest or meal break, or uses sanitary, washing or changing facilities; during work-related trips, travel, training, events or social activities; work-related communications (including through information and communication technologies); in employer-provided accommodation; and when commuting to and from work. It also recognizes that violence and harassment may involve third parties.

Ryder welcomed the adoption. “The new standards recognize the right of everyone to a world of work free from violence and harassment, “he said. “The next step is to put these protections into practice, so that we create a better, safer, decent, working environment for women and men. I am sure that, given the co-operation and solidarity we have seen on this issue, and the public demand for action, we will see speedy and widespread ratifications and action to implement.”

Conventions are legally binding international treaties that may be ratified by member States, while Recommendations serve as non-binding guidelines. Declarations are resolutions of the ILO’s member States used to make a formal and authoritative statement.

During the Conference, the Committee on the Application of Standards  adopted conclusions on 24 individual cases  related to issues arising from the implementation of Conventions by ratified by member States.

The Conference outcomes “empower the ILO to perpetuate its commitment to social justice in support of peace in the world,” said Conference President Jean-Jacques Elmiger, head of International Labour Affairs at Switzerland’s State Secretariat for Economic Affairs. “Let us dare admit it, our conference will mark history.”

The two-week ILC was attended by about 6,300 delegates, representing Governments, workers and employers from 178 of the ILO’s member States, as well as observer national and international non-governmental organizations.

A number of thematic forums on future of work issues  took place during the Conference, featuring heads of United Nations and multilateral agencies and high-level government, workers’ and employers’ representatives.

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New mandate must bring equality for women

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PES Women President Zita Gurmai speaks at the meeting

Gender equality and parity within the institutions must be priorities for the next mandate, PES Women said today as it released a statement ‘Call for a feminist Europe’.

PES Women – which promotes gender equality and women’s representation both inside and outside the Party of European Socialists – was gathering for the first time since the European elections.

PES Women members unanimously adopted Call for a feminist Europe, reiterating and outlining the steps the EU institutions must take to achieve greater gender equality.

PES Women President Zita Gurmai, said:“We are entering the ninth mandate of the European Parliament, and yet we have still not achieved gender equality. Last month’s vote saw an increase in the number of women elected to the European Parliament, which is very welcome. But despite this, no institution comes close to ensuring equal representation in decision-making for women, or gender equality more generally. So after the PES feminist campaign, this is what we are reiterating today. It is time for a feminist Europe where every woman and girl can exercise her freedoms, choices and rights.”

2020 marks the 25th anniversary of the Beijing Platform for Action – an agenda for women’s empowerment adopted at the UN’s Fourth World Conference on Women (Beijing, China, 1995). As this anniversary is approached, Call for a feminist Europe picks up many of the areas the Platform for Action identified.

The PES Women statement calls for:

Gender-balanced committees, committee chairs and heads of delegations in the European Parliament;

That national governments propose two candidates, a woman and a man, for Commissioner to ensure gender parity in the Commission’s college;

Gender equality as a stand-alone European Commission portfolio, and as a priority of the Commission President or Vice-President, and a feminist approach to overall Commission policy-making;

The European Commission to introduce gender budgeting, and more resources to strengthen women’s rights, including for the European Institute for Gender Equality;

All institutions to amplify their ambitions to create and adopt legislation that improves the lives of women and girls in Europe; and, reaffirm their aim to achieve full gender equality, including through training for staff and policy-makers on gender mainstreaming.

All institutions to introduce reporting mechanisms and mandatory training for staff and elected members on all types of harassment and sexism.

The statement also advocates for an ambitious and binding EU Gender Equality Strategy that ends all gender gaps – especially the gender pay gap, makes the work-life-balance Directive a reality, empowers women, combats gender-based violence, and ensures access to sexual and reproductive rights. This was a key proposal of PES Common Candidate Frans Timmermans, who PES Women continue to fully support for the President of the European Commission.

Together with Iratxe Garcia Perez, newly elected President of the Social Democratic Group, PES Women will continue its commitment to women’s rights, further enhancing the chances of successfully taking forward gender equality policies in the European Parliament.

Read Call for a feminist Europe here

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Tech News

5G is here. What does it mean for you?

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 By now, you’ve probably heard about the coming launch of 5G. Rolling into the marketplace for the first time this year, it’s the next (fifth) generation of cellular technology, and promises to significantly enhance the speed, coverage and responsiveness of wireless networks.

It’s a major upgrade, and has wireless carriers excitedly rushing to promote the arrivals of their 5G networks and compatible products. As a result, the average cellphone user may well be wondering: How and when will 5G really make an impact on me?

Well, before you feel compelled to rush out and upgrade your phone, consider the following.

A limited rollout

Ever since the first field tests of 5G were deployed in 2015, hype for the technology has been building. Tests have delivered responses 10 to 100 times speedier than current 4G cellular connections. The arrival of 5G is predicted to bring phenomenal advancements to the digital landscape, supercharging marvels like self-driving cars, virtual and augmented reality, and even newly emerging medical services like remote surgery.

But that magnificent future is just that: the future. Initially, 5G is only being made available in a small number of launch cities, and even there only to those who’ve already laid out upwards of $1,200 for the first generation of 5G-compatible phones.

The rest of us will still be connected to the reliable 4G service we’ve grown used to — and 4G won’t be going away anytime soon.

Check the expiration date

It’s estimated that most wireless networks won’t be providing widespread 5G coverage until the end of 2020, at the very earliest. And even when they do, you can expect the technology supporting 4G to remain in place indefinitely. In fact, unless you’re actively seeking to change, you may not even notice that 5G has been turned on in your area for a long time.

How long? Let’s use history as a guide. Just this year, major network providers have begun the final phase-out of 3G technology, which launched in 2001, meaning it’s had a productive lifespan of almost 20 years. 4G launched in 2010, so it will likely still be supported for as much as another decade.

The bottom line is, if you’re comfortable with your current network speeds and performance, you won’t need to change a thing for a long time to come.

Going down a familiar road

The best approach for upgrading to 5G may very well be: Wait and see. If you trust your wireless provider, remember that they’ve been through these changes for each successive generation, and have plans in place to make sure customers stay “up to speed,” so to speak.

A good example is Consumer Cellular. Focusing largely on customers ages 50 and up, the company recognizes that its users may be less tech-savvy than other segments of the market. As a result, they’ve helped steer them through transitions all the way from 2G by proactively reaching out to alert customers as to what changes to expect, and when, with each succeeding upgrade. The result has been millions of customers making seamless transitions, whether that required simply changing a setting on a cellphone or upgrading to an entirely new device.

5G offers a bright future for wireless, and opens an almost unlimited range of technological possibilities. Yet for the average user, and for the foreseeable future, it will be a “nice to have” rather than a “need to have” upgrade, meaning there’s really no rush to decide.

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