Social Security in the 90s: The Imperatives of Change

Article excerpt

The first item of discussion of the 25th General Assembly is the report on developments and trends in social security during the 3-year period which has elapsed since the previous General Assembly. Normally, providing an overview of the principal trends during the past 3 years proves to be a daunting challenge to the International Social Security Association (ISSA) Secretariat. What are the really significant trends which emerge from the thousands of legislative and administrative modifications which the member organizations implemented during the period 1993-95 in the social security programs they administer? How can we be reasonably certain that the trends which hold true for one region are also present and important in other regions? How can we strike the proper balance between the countries with older and advanced social security systems and those with younger and still emerging systems?

Surprisingly, the course of events in the world of social security has made the Secretariat's task easier on the occasion

This article is a reprint from Part I of a report presented by Dalmer D. Hoskins, Secretary General of the International Social Security Association (ISSA) to the organization's 25th General Assembly (November 1995, Nusa Dua, Indonesia). It identifies and interprets the major trends currently influencing the evolution of social security programs around the world, and analyzes these developments against the backdrop of the current economic, demographic, and social environment in which these programs operate. (Part II of the report analyzes recent developments in specific areas, such as health care, private pensions, developing areas.) Mr. Hoskins was an official of the U.S. Social Security Administration before assuming the position of Secretary General of the ISSA in 1990.

The ISSA is a nongovernmental international organization headquartered in Geneva, Switzerland. It is made up of 340 social security-related institutions, including the U.S. Social Security Administration, in 130 countries. The Association's aim is to protect, promote, and develop social security worldwide. Requests for copies of the full report (Developments and Trends in Social Security, 1993-1995) should be addressed to the ISSA General Secretariat at Case postale 1, CH-1211 Geneva 22, Switzerland, or through telefax at (41-22) 798-63-85. of the 25th General Assembly, since the major developments can be summarized under a single heading: the realization and conviction of social security managers and decisionmakers throughout the world that change is both inevitable and necessary.

Change is hardly new to social security schemes since, as institutions which are closely linked to social needs and economic conditions, they have always been subject to frequent adjustments in their benefits, eligibility requirements, and the methods of financing. What is striking now is that, more than ever, there is a growing consensus that these changes must be made by adopting new and more far reaching policies and orientations. The past can no longer be relied on to provide the roadmap for future social security policy.

The message from social security organizations around the world has become increasingly clear and explicit: the future of social security can no longer be ensured by merely increasing, once again, the contribution rates or by merely readjusting benefit entitlements. Technical adjustments no longer seem sufficient, and the question is posed whether more basic structural and policy reforms must be undertaken. Pressure for change is evident in all the branches of social protection, but the proposals to undertake the most radical reforms are particularly strong in the medical care and the old-age pension insurance branches.

The fact that social security in many parts of the world is approaching an historic crossroads was already apparent on the occasion of the 24th General Assembly held in Acapulco in 1992. …