Administration and Finance
There is considerable diversity in the ways social security is both administered and financed globally. The most common approach is for a centralized independent agency, under central government control, to collect employer and employee contributions and to disburse program benefits.
In all countries social security administration is, primarily, a central government responsibility. Regional governments have a role to play in 15 countries, seven of which have federal political structures ( Australia, Canada, Germany, India, Russia, Switzerland and the United States). Local government plays a role in 10 countries, five of which are in Western Europe ( Denmark, Finland, Luxembourg, the Netherlands and Switzerland). However, the involvement of all three levels of government is rare, restricted to six countries ( China, Denmark, Japan, Lithuania, North Korea and Switzerland). Two microstates (the Marshall Islands and Micronesia) have chosen to contract out their social security program administration to a public social security agency in another country (the United States), as has Palau, a United Nations Trust Territory administered by the United States. The Cook Islands has chosen to contract out its social security administration to an insurance company.
The most common public mode of social security program administration is the independent (parastatal or quasi-governmental) agency (109 countries), although public agencies under direct governmental control -- typically a