Social Security Programs Throughout the World: The Americas, 2011

[Excerpt] This fourth issue in the current four-volume series of Social Security Programs Throughout the World reports on the countries of the Americas. The combined findings of this series, which also includes volumes on Europe, Asia and the Pacific, and Africa, are published at six-month intervals over a two-year period. Each volume highlights features of social security programs in the particular region. The information contained in these volumes is crucial to our efforts, and those of researchers in other countries, to review different ways of approaching social security challenges that will enable us to adapt our social security systems to the evolving needs of individuals, households, and families. These efforts are particularly important as each nation faces major demographic changes, especially the increasing number of aged persons, as well as economic and fiscal issues

Social Security Programs Throughout the World: Africa, 2011

[Excerpt] This third issue in the current four-volume series of Social Security Programs Throughout the World reports on the countries of Africa. The combined findings of this series, which also includes volumes on Europe, Asia and the Pacific, and the Americas, are published at six-month intervals over a two-year period. Each volume highlights features of social security programs in the particular region. This guide serves as an overview of programs in all regions. A few political jurisdictions have been excluded because they have no social security system or have issued no information regarding their social security legislation. In the absence of recent information, national programs reported in previous volumes may also be excluded. In this volume on Africa, the data reported are based on laws and regulations in force in January 2011 or on the last date for which information has been received

Strange But True: Claim and Suspend Social Security

With the current financial crisis wreaking havoc on retirement savings, many older people have had to reassess their retirement plans – they may decide to work longer or, if already retired, to re-enter the workforce. For those currently in the labor force, working longer increases monthly Social Security benefits. Social Security benefits are actuarially adjusted so that, on average, lifetime benefits remain the same whether a person retires at any age between 62 and 70. So the later a person retires, the higher the monthly benefit. For those thinking of re-entering the workforce, Social Security provides for higher benefits later in exchange for withholding benefits while they are employed. For those under the Full Retirement Age (currently 66), this adjustment is accomplished automatically through the annual retirement earnings test. For those over the Full Retirement Age, the adjustment can be made through the voluntary option of “claim and suspend.” The “claim and suspend” strategy also enhances the claiming options of one-earner couples. For example, a husband who reaches the Full Retirement Age may elect to claim and immediately suspend benefits, allowing his wife to receive a spousal benefit based on his earnings record. The husband is then free to continue working and receive delayed retirement credits, which increases not only his monthly benefit but also his wife’s survivor benefit. By using “claim and suspend” in this way, the couple can enhance the value of their lifetime benefits...

Social Security Primer

[Excerpt] This report provides an overview of Social Security financing and benefits under current law. Specifically, the report covers the origins and a brief history of the program; Social Security financing and the status of the trust funds; how Social Security benefits are computed; the types of Social Security benefits available to workers and their family members; the basic eligibility requirements for each type of benefit; the scheduled increase in the Social Security retirement age; and the federal income taxation of Social Security benefits

Social Security Reform: Legal Analysis of Social Security Benefit Entitlement Issues

[Excerpt] Calculations indicating that in the long run the Social Security program will not be financially sustainable under the present statutory scheme have fueled the current debate regarding Social Security reform. This report addresses selected legal issues which may be raised regarding entitlement to Social Security benefits as Congress considers possible changes to the Social Security program, and in view of projected long-range shortfalls in the Social Security Trust Funds

Sustaining Social Security

This paper analyzes the sustainability of intergenerational transfers in politico-economic equilibrium. We argue that these transfers arise naturally in a Markov perfect equilibrium in the fundamental sate variables. In contrast to earlier literature, our explanation does not resort to altruism, commitment, or trigger strategies but rests on the incentive for young households to monopolize capital accumulation, as pointed out by Kotlikoff and Rosenthal (1990). Since transfers to the old are instrumental in that respect, the vote-maximizing platform under electoral competition sustains a large social security system. Introducing fully rational voters and probabilistic voting in the standard Diamond (1965) OLG model, we find that transfers in politico-economic equilibrium are too high relative to the social optimum. Standard functional form assumptions yield analytical solutions for both the Ramsey and the probabilistic voting case. Under realistic parameter values, the model predicts a social security tax rate of 12 percent, as compared to a Ramsey tax rate of 3.5 percent. Other predictions of the model are also consistent with the data. Analytical solutions for the case with endogenous labor supply and tax distortions show the results of the model to be robust.Social security; Intergenerational transfers; Markov perfect equilibrium; Probabilistic voting; Aggregate saving; Aggregate labor supply

Social security finances

One of the government’s main functions is to protect the population against a number of social risks. Hence, replacement incomes are provided in the event of unemployment, old age or occupational disability. Income supplements are granted to compensate in part for the financial burden associated with illness or with bringing up children. These social benefits are an important facet of the redistribution of income effected by the government. In Belgium, social protection is provided mainly by the social security sub-sector, which is the largest component of the general government sector. The level of government expenditure on social protection in Belgium is, expressed as a percentage of GDP, above the European Union average. This is due mainly to relatively higher expenditure on pensions and unemployment. The Belgian social security sector expanded strongly in the 1970s. In the ensuing period, total social security receipts and expenditure remained relatively stable on average; expressed as percentages of GDP, they stood in 2000 at roughly the same level as in 1980. During this period, however, there was a “stop and go” policy on expenditure and receipts : expansion periods were followed by periods in which a more restrictive policy was pursued. In recent years, social security has again been expanding, although only to a more limited extent. Over the years, the structure of social security spending has changed significantly : due to the strong rise in health care expenditure, this spending item has now become the most important component, just ahead of pensions. Since receipts and expenditure have hitherto moved very much in parallel, the financial balance of social security has always hovered around equilibrium. At present, the social security sector is not only free of any financial liabilities, it actually has substantial financial assets. Population ageing will clearly exert strong upward pressure on future expenditure on pensions and health care. This increase can be only partly offset by the predicted decline in unemployment expenditure and family allowances. Therefore, social security will have to face a major financial challenge in the (near) future.Belgian public finance, social security, social protection expenditure