Social security is the basic protection to ensure access to health care and support for families with children, as well as to guarantee income security, in case of old age, unemployment, sickness, invalidity, work injury, maternity or loss of a breadwinner.
Social security is a powerful tool to ensure minimum living standards, combat causes and effects of poverty, and facilitate smooth income redistribution from working years to retirement.
Social security was well developed in the Soviet Union, protecting workers from a wide range of risks. After the Soviet Union’s disaggregation, all CIS countries confronted the urgent need to establish their own national social security structures - to cope with a large increase of poverty and to respond to the new economic conditions and new needs of workers and their families. These efforts were constrained by the economic turmoil of transformation, which placed the systems under strong financial pressures – increased demands for benefits due to unemployment and early retirement, and decreased revenues due to financial difficulties of large enterprises. Social security benefits were eroded by inflation, and there was a reduction in spending in all countries. Pensions, the largest component of the social security systems, were heavily affected by these trends. Expenditures on unemployment benefits, which were still relatively new in CIS countries, were extremely modest.
Today many CIS countries are further reviewing their social security schemes in order to make them more financially viable and sustainable in their present socio-economic environment. Reform of national pension schemes is a major issue across the region, with most countries trying to introduce individual accounts in the pay-as-you-go systems and some countries privatizing their pension systems fully or partially (Russia and Kazakhstan). Efforts to improve benefits are constrained by the existence of large sectors of informal employment, that are beyond the reach of social security collection agencies, as well as by widespread non-compliance with the contribution requirement in the region’s formal economies. Responding to the shortage of pension revenues, more than half of CIS countries have already increased the retirement age. Armenia is the first country in CIS where same retirement age for men and women is planned to be introduced. Many countries are also developing and improving social assistance as a way of ensuring a minimum income for all.
A number of other social security reforms have been introduced as well. Based on the pressing need to protect workers from occupational accidents/diseases at work place, four countries in CIS are preparing to introduce occupational accident insurance schemes. The three Caucasus countries are trying to extend health care coverage to informal sector and rural population by improving community-based health insurance schemes. Several countries are developing and expanding community based social services.
ILO Moscow provides advisory services and technical support to social security institutions as well as to governments and workers’ and employers’ organizations for:
- restructuring national pension schemes in accordance with ILO Convention No.102 on Social Security (Minimum Standards) to ensure basic protection for all workers, tripartite scheme governance, and to take into account lessons learned elsewhere in the world on privatization and individual accounts;
- developing community based social services for person with special needs, including the elderly and persons with disabilities;
- designing new systems of occupational injury and disease benefits;
- targeting social assistance schemes effectively, and
- promoting greater gender equality in social security.