Chapter VII. Conclusions

I. Difficulties in application and prospects of ratification

233. A number of governments have referred to difficulties which they consider likely, temporarily at least, to prevent acceptance of Part V of Convention No. 102 and/or Part III of Convention No. 128, while others have expressed their intention to ratify these Conventions or adopt measures for their application.

Difficulties

234. Some governments state in general terms that there are difficulties involved in the ratification or application of Conventions Nos. 102 and 128. (Endnote 1) Many other governments report economic, financial or administrative difficulties. (Endnote 2) The economic crisis and inflation, (Endnote 3) as well as the country's level of development (Endnote 4) and the lack of human resources (Endnote 5) were also mentioned as factors impeding the application of the Conventions. Some governments also referred to the difficulty of collecting the statistical information required by the instruments. (Endnote 6) Lastly, as may be seen in the following paragraphs, several governments referred to problems relating to specific aspects of the Conventions.

235. The Government of New Zealand considers that it is unable to apply Conventions Nos. 102 and 128 because of technical difficulties resulting principally from the non-contributory nature of the national social security system. As was stated in Chapter I of this Survey, Conventions Nos. 102 and 128 were drafted with a high degree of flexibility as regards the methods of protection which may be adopted by governments with a view to application of their provisions. Thus, they make allowance both for systems based on the principle of social insurance and for schemes applicable to all residents and financed through general taxation. The Committee would therefore like to draw this country's attention to the fact that the non-contributory nature of old-age benefit paid by the New Zealand social security system does not in itself constitute an obstacle to the application of Conventions Nos. 102 and 128.

236. The Committee notes that the Government of Thailand stated that there was no system of old-age protection in force in the country apart from the public servants' pension scheme. In this context, the Committee considers that countries which only protect such a limited sector of the population should be given special attention by the Office in the form of technical co-operation in this area.

237. The question of coverage was raised by a number of governments. The Government of Honduras stated that homeworkers, domestic temporary and casual workers, as well as agricultural workers and herdsmen are not covered by social security, so that the coverage of legislation does not meet the requirements of the instruments under consideration. According to the Government of Pakistan, the coverage of legislation is very restricted, owing to limited resources, so that it falls far short of the requirements of Article 27 of Convention No. 102 and Article 16 of Convention No. 128. However, it adds that the scope has been improved considerably since 1976 and that it should be possible in future to further extend it in stages, in conformity with paragraph 2 of Recommendation No. 131. The Government of Morocco states that only persons covered by social insurance, who contribute financially to the social security scheme, are protected. The Government of Suriname considers that one of the problems involved in applying the instruments concerns the protection of workers employed in small enterprises and those in the rural and informal sectors, as well as that of homeworkers. The Government of Tunisia states that the percentages laid down by the Conventions for protected persons are not attained in practice, although the coverage provided for by law is very extensive. (Endnote 7) Lastly, the Government of Japan considers that the coverage of protected persons may raise certain questions as regards Convention No. 128.

238. It should be pointed out in this context that Conventions Nos. 102 and 128 define their scope largely by referring to statistical criteria, leaving governments a choice of several options. Moreover, as the Committee emphasised in paragraphs 55 to 59 of Chapter II of this Survey, both Conventions contain a number of provisions allowing for exceptions, one of which is intended specifically for developing countries (Article 3, read in conjunction with Article 27(d), of Convention No. 102, and Article 4, read in conjunction with Article 16, paragraph 2, of Convention No. 128). In view of the particular importance of this question, the Committee hopes that the governments of the countries concerned will continue to make every effort to gradually extend old-age benefit to new categories of workers, on the one hand, and that they will re-examine the possibility of accepting the obligations under Part V of Convention No. 102 or Part III of Convention No. 128, on the other.

239. The Government of Australia raised the question whether the term "resident" in Article 27(c) of Convention No. 102 and Article 16, paragraph 1(c), of Convention No. 128 also includes illegal immigrants. In this respect, the Committee would like to emphasise that, in accordance with the views it expressed in paragraph 53 of Chapter II of this Survey, this term should be understood as including only non-nationals who are lawfully resident within the country of immigration. These provisions do not, of course, prohibit countries from going beyond this obligation by also affording protection to non-nationals whose position cannot be regularised, particularly in the case of contributory schemes.

240. The Government of Denmark, referring to Convention No. 128, raised difficulties in regard to pensionable age, which is 67 years in that country, both for national social pensions and supplementary pensions (ATP scheme). In this respect, the Committee recalls that Article 15, paragraph 2, of Convention No. 128 allows an age higher than 65 years to be fixed "with due regard to demographic, economic and social criteria, which shall be demonstrated statistically". (Endnote 8) Therefore this does not constitute a real obstacle or difficulty in the application of this instrument.

241. In Australia, (Endnote 9) Ireland and Mexico, (Endnote 10) the absence of provisions for lowering the pensionable age in respect of workers engaged in arduous or unhealthy occupations is mentioned by the Governments as impeding the application of Convention No. 128, of which Article 15, paragraph 3, provides that "if the prescribed age is 65 years or higher, the age shall be lowered, under prescribed conditions, in respect of persons who have been engaged in occupations that are deemed by national legislation, for the purpose of old-age benefit, to be arduous or unhealthy".

242. In Kenya, the payment of old-age benefit in the form of a lump sum impedes the application of Conventions Nos. 102 and 128. The Government states that the necessary amendments cannot be introduced until workers show willingness or desire to have their provident fund transformed into a pension scheme. While the Committee appreciates the attachment of workers in certain developing countries to the system of reimbursement of individual contributions which is characteristic of provident funds, it none the less emphasises the importance which it attributes to payment of old-age pensions based on the distribution of risks, as the only form of benefit which can provide guaranteed security for beneficiaries in their old age, irrespective of the duration of their retirement. However, the Committee notes in this respect that the Kenyan Public Servants' Pension Scheme provides for the payment of old-age pensions.

243. The Government of Senegal considers that the main difficulty lies in the calculation of the rate of benefits. It should be recalled here that neither Convention No. 102 nor Convention No. 128 impose a particular method for the calculation of benefits; States are given the freedom to adopt their own rules and methods of calculation for fixing the amounts of benefit paid under their national system, provided that such amounts meet the requirements laid down by the instruments. (Endnote 11) In this context, the Committee notes that the objective of the managing board of the Senegalese Social Security Fund should be to provide a retirement pension equal to 1.33 per cent of remuneration per year of service. The Committee would also like to draw attention to the fact that, contrary to what the Governments of Morocco and Rwanda appear to believe, the provisions of Conventions Nos. 102 and 128 concerning old-age benefits do not require dependents to be taken into account in order to increase old-age pension, neither do they stipulate that family allowances must be paid in addition to old-age benefit.

244. More particularly as regards the rate of old-age benefit, the Government of Mauritius stated that it was not possible, in view of the state of the economy of the country, to increase the rate of contributions to the National Pensions Fund in order to ensure a level of 40 per cent of previous earnings as contributory retirement pension after 30 years of contribution. However, the Government considers that the level prescribed by Convention No. 102 may be attained if the amount paid as non-contributory pension is also taken into consideration. In so far as the non-contributory pension scheme is applicable to all residents without a means requirement, the Committee considers, bearing in mind the views expressed in paragraph 134 of Chapter IV, that the benefits provided under such a scheme may be added to the contributory benefits paid to employees in order to assess whether the level stipulated by the Conventions is attained. The Government of the United Kingdom considers that, although in practice the benefits reach the standards set by Convention No. 128, they do not necessarily do so through retirement pension alone. Lastly, the Government of Israel believes that the main problem as far as Convention No. 128 is concerned lies in the level of benefit, given the difficult economic situation in which the country now finds itself.

245. The length of the period to be taken into account for the calculation of benefit also appears to give rise to some difficulties. In this respect, the Government of Australia states that entitlement to old-age benefit is subject to a residence requirement of either ten years' continuous residence or combined periods of broken residence totalling ten years, provided that one of these periods is at least five years. It should be stressed that Article 29, paragraph 1(a), of Convention No. 102 and of Article 18, paragraph 1(a), of Convention No. 128, by referring to "prescribed rules" leave it to a certain extent to national legislation to determine the conditions in which the qualifying period should be completed.

246. The Government of Ireland points out that periods of insurance preceding 1953 are not taken into account. In this respect, the Committee wishes to recall that both Article 73 of Convention No. 102 and Article 43 of Convention No. 128 specify in subparagraph (b) that these instruments "shall not apply to benefits in contingencies occurring after the coming into force of the relevant Part of the Convention for the Member concerned in so far as the rights to such benefits are derived from periods preceding that date". The Committee therefore considers that the situation described by Ireland does not in itself constitute an obstacle to acceptance of the parts of Conventions Nos. 102 and 128 relating to old-age benefit.

247. The Government of Ireland also states that reduced old-age benefit is not guaranteed in every case to beneficiaries who have completed 15 years of insurance, contrary to the provisions of Article 29, paragraph 2, of Convention No. 102. (Endnote 12)

248. The review of old-age benefit to take account of increases in the cost of living was mentioned by several governments as impeding full application of the Conventions. In Saudi Arabia, no measure has been adopted to ensure that old-age pensions are revaluated. The Government of Burundi stressed the negative impact of the economic crisis on maintenance of purchasing power of pensions. the crisis, as well as a high rate of inflation, was also mentioned by the Government of Brazil as having a detrimental effect on the resources of social insurance, making it difficult to maintain the real value of pensions. Lastly, the Government of a non-metropolitan territory of the United Kingdom -- Anguilla -- referred to the fairly long interval which may elapse between revaluations of benefit as a possible difficulty.

249. The Government of Colombia cites as a difficulty the fact that the social security scheme does not provide for an early pension in certain circumstances. It should, however, be emphasised at this point that neither Convention No. 102 nor Convention No. 128 require the grant of early pensions.

250. Suspension or reduction of old-age benefit in the event of the insured person engaging in an occupational activity was mentioned by the Governments of Ireland (Endnote 13) and Poland. This is expressly allowed, however, both by Article 26, paragraph 3, of Convention No. 102 and by Article 31 of Convention No. 128.

251. The exclusion of foreign workers from coverage by the Social Insurance Act was mentioned by the Government of Kuwait as likely to impede ratification of the Conventions.

252. The Government of Poland stated that in view of the economic situation it was difficult to ensure payment of benefits where the insured person travels or resides abroad. In this respect, the Committee recalls that Article 69(a) of Convention No. 102 provides that "benefit may be suspended as long as the person concerned is absent from the territory of the Member", while Article 32, paragraph 1(a), of Convention No. 128 allows benefit to be suspended in such a case "except, under prescribed conditions, in the case of a contributory benefit".

253. Lastly, the Government of Ireland wonders whether Article 34, paragraph 2, of Convention No. 128 gives an absolute entitlement to the beneficiary to be represented by a person of his choice if he appeals in the case of refusal of benefit or complains as to its quality or quantity, in accordance with paragraph 1 of the same Article. Under Irish legislation the Appeals Officer has the discretion in the first instance to decide whether an appeal may be decided summarily or an oral hearing may be given. In the event of an oral hearing, the prescribed procedures provide that the appellant may appear at the hearing in person and may be represented by any member of his family or, with the consent of the Appeals Officer, by any other person. It should be noted in this respect that by referring to procedures "prescribed" (Endnote 14) by or in virtue of national legislation "which permit the claimant to be represented or assisted, where appropriate, by a qualified person of his choice ...", paragraph 2 of Article 34 allows governments a certain amount of leeway in the implementation of this provision.

Prospects for ratification

254. A number of governments have stated that they are favourably disposed towards ratification of Convention No. 102 and/or Convention No. 128.

255. According to information communicated by the Government of Portugal, ratification of Convention No. 102 has been approved. The Government of Belgium has stated that it is in a position to ratify Convention No. 128.

256. The Government of Malta reported that it was seriously considering the possibility of ratifying Conventions Nos. 102 and 128. The Government of Egypt stated that both of these Conventions were currently being examined prior to beginning ratification procedures. According to the Government of Jordan, ratification of Conventions Nos. 102 and 128 will be proposed after the Provisional Law of 1978 on social security has been adopted on a permanent basis in accordance with the Constitution.

257. The Government of Côte d'Ivoire states that ratification of Convention No. 102 can only take place after the current reforms to harmonise social security legislation have been implemented.

258. The Committee notes with interest this information concerning prospects of ratification. It recalls, as it pointed out in 1961 in the General Survey carried out on Convention No. 102, that social security can no longer be considered as a luxury, since it answers the call which must be heard for any social policy to be comprehensive (paragraph 190), and it hopes that Convention No. 102 and/or Convention No. 128 may be ratified in the near future by a number of member States of the ILO.

Other measures for implementation

259. Several governments (Endnote 15) also mentioned that they intended to improve or extend the protection afforded by their old-age benefit system, or that they had undertaken studies for this purpose. Others referred to the drafting of new social security legislation. (Endnote 16) In this respect, the Committee notes with interest the information communicated by the Government of Sri Lanka to the effect that, in accordance with a recommendation of the ILO-sponsored National Tripartite Seminar, legislation is under preparation to convert the national provident fund into a pension scheme.

260. The Government of Tunisia stated that social security coverage, and in particular the old-age scheme, was constantly being extended to new sectors and occupational categories, but went on to point out that part of the population covered by law was not protected in practice. Measures are therefore being adopted to raise public awareness in order to give effect to legal provisions in this area.

II. General conclusions

Basic objectives and methods of protection

261. The need to provide protection to elderly persons by guaranteeing them a basic income has long been recognised as a fundamental objective of social protection. The great majority of countries have now adopted measures to set up an old-age benefit scheme, and it is especially encouraging to note that the number of countries in which this type of social benefit does not exist is decreasing. In this context, the Committee would like to emphasise the very positive role of the ILO in the field of technical assistance. In a great many cases, the setting up and improvement of social security scheme was facilitated by the advice and technical assistance provided by the Office to the governments which requested it. This is why the Committee urges those governments which have not yet set up a pension scheme generally applicable to workers to consider, together with the bodies financing international technical co-operation and in particular the United Nations Development Programme, the possibility of seeking the technical assistance of the Office. For it is hardly conceivable that on the eve of the twenty-first century, private-sector workers in a country, whatever its stage of development, be deprived of such essential protection as the provision of an income in their old age after working all their life.

262. Admittedly, one should welcome the fact that in the case of Convention No. 102, there have been 32 ratifications, 28 of which include acceptance of Part V relating to old-age benefit. The fact remains none the less that over two-thirds of the member States of the ILO are not bound either by Convention No. 102 or by Convention No. 128. The reason for this lies in the difficulties inherent in implementing these two Conventions, as well as in their particularly technical nature and considerable complexity. The Committee therefore hopes that this Survey will facilitate comprehension of these instruments and clarify a number of points, thus giving an increasing number of countries the opportunity to reconsider their position as regards ratification of Convention Nos. 102 and 128.

263. In drawing up this Survey, the Committee was fully aware of the problems and difficulties facing countries with different economic and social backgrounds, whose state of development varies considerably. However, the Committee considers that the flexibility formulae provided for by these instruments should make it easier for countries with a wide variety of economic and social conditions to implement the objectives pursued by Conventions Nos. 102 and 128. These allow a wide variety of methods to be applied in providing the protection which they stipulate, thus enabling account to be taken of the extremely broad range of national situations, which follow two main lines of approach: that of social insurance, on the one hand, and that of benefits provided as a state service and financed through taxation on the other. The Conventions also make allowance for the protection provided by non-compulsory social security schemes, provided that these meet certain conditions. Governments are also offered the choice among a number of options for assessing whether the scope and level of protection are attained. Lastly, the Committee would like to draw the attention of governments more particularly to the fact that the Conventions allow exceptions to be made, inter alia, as regards scope, with especial flexibility in the case of Convention No. 128.

Coverage

264. Since the last general survey, the Committee has been aware of a tendency to extend the coverage of national old-age protection schemes, although it has slowed down in recent years. In the great majority of industrialised countries, the social security system now covers employees at least, while many countries have extended protection, to varying degrees, to self-employed persons. Moreover, social security coverage has by definition been generalised in countries which have instituted universal schemes covering the entire resident population. In addition, in countries with a centrally planned economy, social security protection has been extended to self-employed persons, in particular those of the agricultural sector. The developing countries have also expanded their priorities, initially often limited to narrow categories of workers such as the employees of industrial enterprises, to cover new categories of workers excluded up to now. However, these positive developments should not obscure the fact that some occupational categories, the self-employed in particular, are not yet protected in many countries, and that some continue to cover only a limited number of workers. In several developing countries, only public servants are covered by a pension scheme. Moreover, the extension of social security to agricultural workers also gives rise to many difficulties due to peculiar features of this category of workers. Lastly, the question of real coverage of protected persons also appears to raise problems in some countries where the persons who, according to the legislation, should be covered by the national social security system are not always protected in practice. This is an especially important problem which calls for vigilance on the part of the national authorities, in particular as concerns the administration of the schemes. The Committee for its part has consistently endeavoured to supervise closely the implementation in practice of the provisions of Conventions Nos. 102 and 128 concerning coverage.

265. Improvements in the coverage of old-age protection schemes should enable an increasing number of countries to meet the requirements of the instruments under consideration, and in particular those of Convention No. 102, which are relatively low. It should, however, be recalled that both Convention No. 102 and Convention No. 128 refer to statistical criteria in determining their scope. As regards the governments which are not bound by either of these Conventions, very few have included in their reports the statistical information necessary to assess how effect is given to the provisions of the instruments on this point.

Pensionable age

266. Pensionable age does not appear to raise any major problems in the implementation of Conventions Nos. 102 and 128, except for the lowering of the age of workers engaged in arduous or unhealthy occupations required by Convention No. 128. In more general terms, however, this question calls for a number of comments.

267. The pensionable age as fixed by national legislation generally meets the requirements of Conventions Nos. 102 and 128, which prescribe that this age should not, in principle, be higher than 65 years. Since the last general survey on Convention No. 102, some countries have adopted measures to lower the pensionable age, usually in response to workers' desire to retire earlier, but also in order to create new vacancies by encouraging retirement. The question arises, however, as to what is the real impact on employment of lowering the pensionable age, since there is no guarantee that the vacancies created by early retirement will be filled by unemployed persons, and not simply abolished following rationalisation measures. It is also possible that retired persons may be tempted to re-enter the labour market under conditions inferior to those normally offered to other workers. In this context, the question arises as to whether it is appropriate to use old-age insurance as an instrument of employment policy. (Endnote 17)

268. Some governments feel that demographic factors justify raising the pensionable age as a means of cutting social security costs: as life expectancy has been increasing alongside an improvement in living standards, workers should be able to remain longer in active life. However, there are many arguments against this point of view, of which one is linked to employment. An overall raising of the pensionable age would not fail to have negative repercussions on the employment opportunities of younger workers. Furthermore, the increase in life expectancy is not necessarily a universal phenomenon; moreover, within a single country, the increase may not affect the various categories of workers to the same extent. In some developing countries, a worker's life expectancy at the time he starts his career is such that, even in spite of progress made, he still has few chances of living long enough to reach pensionable age. Even in industrialised countries, it may be seen that many workers have to stop working on health grounds before this age.

269. It should also be pointed out that pensionable age is not synonymous with retirement age; i.e. the age at which a worker decides to stop work or has to leave his job. When the pensionable age is fixed in a rigid manner, problems are therefore likely to arise not only for older workers who have had to, on health grounds, stop working earlier than planned, but also for those who, having lost their jobs, have remained unemployed for a long time because of their limited chances -- given their age -- of finding a new job. Account should also be taken of the wishes of workers who, for personal reasons, might like to take early retirement or, on the contrary, postpone their retirement. This is why it would appear to be particularly desirable to allow each person according to health or personal preference, a certain choice as to when they wish to start drawing their old-age pension, in accordance with the provisions of the Older Workers Recommendation, 1980 (No. 162), and in particular Part IV. In this respect, the Committee notes with interest that a growing number of countries have introduced flexible retirement arrangements, such as voluntary early retirement, deferred retirement or progressive retirement, into their legislation. These measures are often coupled with other provisions to make the pensionable age more flexible according to various specific criteria designed to take into account the actual situation of those concerned -- arduous or unhealthy occupations, loss of working capacity, long-term unemployment -- and should give individuals greater freedom to decide upon the age at which they stop working.

270. In many countries, women are entitled to draw their old-age pensions at an earlier age than men, so that they will receive benefits for a longer period. It should, however be borne in mind that where the amount of the pension is linked to the length of contributory service, women may receive lower pensions than men, because of a shorter career, unless adjustments are made, depending on the system, to the accumulation rate or the number of years considered as constituting a full period of insurance. The debate over whether the pensionable age should be different or equal for men and women is still very much alive today. Against the argument on principle advanced by some, based on respect for equality of treatment between men and women, others contend that the "double working-day of women", at home and at work, should be compensated. In practice, the main question which arises is whether the pensionable age for women should be gradually raised to that of men, or the pensionable age for men lowered to that of women, or an intermediate age be adopted for both women and men.

271. The issue of an equal pensionable age for men and women is at present being examined at the national, regional and international levels within the wider context of equality of treatment between men and women in social security; until now, no ILO standard has been drawn up on this subject. It is for this reason that the Committee welcomes the decision taken by the Director-General of the ILO to propose to the Governing Body that equality of treatment between men and women in social security be one of the subjects concerning which new standards may be drawn up. It would also like to take this opportunity to draw the attention of the Conference to the fact that there are no specific standards on this subject at present.

Co-ordination of systems

272. Irrespective of the level of protection provided by the national systems, difficulties have often been noted in the past when a beneficiary has been covered by more than one pension scheme during the course of his career. In countries where special schemes exist alongside a general scheme -- even if only for public servants, as is often the case -- those concerned risk losing their rights or only receiving a reduced pension if they are unable to meet the qualifying conditions established by the various schemes. Co-ordination measures must therefore be taken to guarantee maintenance of beneficiaries' rights in the course of acquisition. As the significance of this problem is often underestimated, the Committee wishes to draw it to the attention of governments. The lack of co-ordination measures, which affects private pension schemes even more, not only runs counter to the individual interests of those concerned but can also, more generally speaking, impeded occupational mobility.

Level and adjustment of benefits

273. As regards the amount of old-age benefits, this survey has revealed that, in some cases, the level of benefits has been maintained or even increased since the last general survey on Convention No. 102, in spite of the economic crisis and or inflation. However, it should be pointed out that in many countries, especially developing countries, the insurance scheme has not yet matured because it was only set up or extended fairly recently; consequently, the protected workers cannot yet have completed the period of insurance the instruments take as a basis for establishing the amount of benefits. What is more, most schemes awarding benefits linked to the beneficiary's previous earnings only take into account, when calculating the pension, wages not exceeding a certain ceiling and/or provide that the pension itself should not be more than a maximum determined amount. Although a ceiling of this nature is not in itself contrary to the provisions of Conventions Nos. 102 and 128, it must be fixed in such a way that it attains the percentages prescribed by these instruments in the case of a standard beneficiary whose earnings are equal to or lower than the wage of a skilled manual male employee. In most cases, additional statistical information would be required to assess the impact of maximum limits placed on earnings or benefits under national legislation. The lack of statistics has also prevented the Committee from determining whether the level prescribed by the instruments was attained in the case of several national systems providing flat-rate benefits.

274. More generally speaking, the introduction of minimum benefits by countries in which social security schemes award benefits linked to beneficiaries' previous earnings should normally improve the situation of some pensioners. They are thus guaranteed a minimum level of security that has to be fixed and maintained at a rate which can meet their basic needs. This is automatically achieved in countries which have a system providing flat-rate benefits. However, there is also a significant trend in these countries towards the provision of a supplementary pension related generally to previous earnings which is often added to basic benefits. There is therefore increasing recourse to a combination of the various methods that may be used to determine the amount of old-age benefits.

275. Cost-of-living increases in countries with a high rate of inflation have serious repercussions on the situation of pensioners if measures are not taken to adjust their pensions. Even in countries where inflation has been brought down to lower levels, price increases result very quickly in a significant drop in the purchasing power of pensions requiring adjustment measures. In this respect, the Committee notes with regret that in a growing number of countries that have adopted systematic methods of review, measures have been taken during the past few years, following the economic crisis, to slow down pension adjustment. In countries which leave it up to the competent authority to make the necessary adjustments as the need arises or which fix long intervals between reviews, there is a particularly high risk that the gap between cost-of-living increases and the adjustment of pensions will have intolerable consequences for pensioners. The situation is particularly worrying in countries beset by severe inflation. In these circumstances, the Committee wishes to stress the vital importance which it attaches to maintaining the purchasing power of pensions. This is one of the major challenges that social security institutions must take up if they wish to continue fulfilling the objectives for which they were created. Over and above the responsibility of social security institutions, the community as a whole should be made aware of the need to ensure, in the name of social justice, that pensioners receive a fair share of what they gave as members of the working population.

Protection of foreign workers

276. The protection of foreign workers has always been one of the major concerns of the ILO. As regards social security, several Conventions of a general scope, such as Convention No. 102, as well as Conventions dealing more specifically with the issue, such as the Equality of Treatment (Social Security) Convention, 1962 (No. 118), deal with the principle of equality of treatment between nationals and non-nationals. As may be seen from the available information, the legislation of the great majority of countries recognises equality of treatment between nationals and non-nationals with respect to old-age benefits, in accordance with the provisions laid down in Convention No. 102. It should nevertheless be pointed out that this Convention provides for certain arrangements in the implementation of the principle of equality of treatment, which include making such equality subject, under contributory social security schemes, to the existence of a reciprocity agreement, which is not provided for by Convention No. 118. Furthermore, unlike Convention No. 118, Convention No. 102 does not require the payment of benefits abroad nor does it deal with the maintenance of rights in course of acquisition when the worker transfers his residence from one country to the other. On these two points, therefore, Convention No. 102 is much more limited in scope than Convention No. 118. These differences may be explained by the fact that as the main objective of Convention No. 102 was to lay down a minimum social security standard, equality of treatment had to be dealt with in a sufficiently flexible way in view of the complex technical problems raised by this question. The fact remains that the effects of ageing experienced by all human beings on reaching a certain age are undoubtedly even harder to bear for foreign pensioners. It is for this reason that the Committee urges governments to continue making every effort to establish equality of treatment in social security to the greatest extent possible between nationals and non-nationals, by taking as guide-lines the principles laid down in Convention No. 118. In so doing, they will only be acknowledging the legitimate right of foreign workers who have reached retirement age to benefit from the achievements of the social security system, which, as working members of society, they have helped to establish and build up in the same way as nationals.

Financing and future action

277. The financing of national pension schemes is one of the major concerns of governments at the present time, although Convention No. 102 merely puts forward certain general principles on the subject. There is nothing paradoxical about this, because whatever the methods adopted, they must guarantee the supply of resources needed to pay out benefits whilst ensuring that the burden of financing is fairly distributed. National social security schemes are clearly having to cope with adverse economic and demographic conditions liable to undermine the institutions' ability to disburse pensions. First, the economic crisis and the rise in unemployment have affected the amount of revenue of social security schemes. In many countries, a large proportion of the active population has, within the space of a few years, stopped paying social security contributions and pays much lower tax. Inflation has also had considerable repercussions on the amount of resources needed to maintain the purchasing power of pensions. Furthermore, in many countries, the ageing of the population -- due to the drop both in birth and in death rates -- is affecting the financial equilibrium of pension schemes, since the number of beneficiaries tends to increase in comparison with the working population, and the former draw their pension for a much longer period. In addition to these economic factors, the development and maturity of schemes must be taken into account.

278. Given the extent of these problems, doubts have been raised as to the role of the State in social protection, which is now challenged by some. In this respect, the Committee wishes to point out that the problems facing social security today, and national pension schemes in particular, are by no means due to the nature of the institution itself but are mainly caused by external economic factors, which also affect the other sectors. Furthermore, it considers that the disengagement by the State advocated by some would only shift the problems without solving them. In fact, the State's role seems even more vital in this field of social policy than anywhere else because it is necessary to forecast in the long term the balance between resources and expenditure in order to guarantee, despite difficult economic conditions, the institutions' ability to meet their pension commitments.

279. The extent of the economic problems facing national pension schemes must not make one lose sight of the extreme economic vulnerability of older persons, for whom their pension is often their only means of subsistence. To guarantee today's pensioners a fair share of what they gave during their working life is a fundamental concern of social justice. In many countries, this is a social achievement already considered as inalienable by the population as a whole. Admittedly, the principles laid down in Conventions Nos. 102 and 128 concerning old-age benefits have not yet been implemented in every country. The Committee therefore feels bound to stress the need for governments to do everything in their power to overcome their difficulties -- with the support of the representative organisations concerned, and employers' and workers' organisations in particular. In this context, it would like to emphasise the importance for governments of continuing co-operation with the ILO, for it is convinced that through technical co-operation, the States will be better able to identify priorities in the light of their economic capacity and to find ways to provide increasingly efficient social protection for older workers.

Endnotes

Endnote 2

Endnote 3

Endnote 4

Endnote 5

Endnote 6

Endnote 7

Endnote 8

Endnote 9

Endnote 10

Endnote 11

Endnote 12

Endnote 13

Endnote 14

Endnote 15

Endnote 16

Endnote 17

Cross references
Constitution: Article 19
Constitution: Article 22
Constitution: Article 35