SHAPING THE FUTURE HOW CHANGING DEMOGRAPHICS CAN POWER HUMAN DEVELOPMENT

TABLE 4.3:
Social pensions are an important way to extend access, but most are still limited in their support
Source: Asher 2012.
ed. Coverage ranges from almost 1 percent in
Papua New Guinea and Tonga to 100 percent in
Mongolia and Timor-Leste. Coverage in Nepal,
a least developed country, is higher than in some
middle-income countries such as Malaysia and
Sri Lanka. Among 34 countries with available
data, 14 have coverage rates of 50 percent or
more (Figure 4.11). Pension coverage shrinks if
considered only in light of contributory pensions.
Despite gaps, developing countries in the
region have made significant progress over the
last decade, with pension coverage increasing in
30 out of 34 countries with data. Countries that
have made big jumps include China, Maldives,
Thailand and Timor-Leste, among others. 62
Differences in coverage are explained by
several factors, including public policy choices
and pension types. In China, for instance, most
people are not in the contributory pension system,
so they receive benefits from a social protection
programme that is fairly small. 63 Thailand’s
high coverage rate largely stems from defined
benefit programmes such as the Old-Age Allowance
System, which is a mandatory social
insurance system requiring all formal entities
with employees to participate, and the National
Savings Fund, which acts as a safety net for Thai
workers not covered by state pension. 64 Nepal has
higher coverage through publicly funded social
pensions. In some countries, including Bhutan,
Cambodia, Pakistan, Papua New Guinea, Tonga,
and Vanuatu, pensions coverage are relatively
low, with coverage extending only to 5 percent
or less of the older population.
Actual pension coverage tends to be less
than that promised by law. Such gaps occur,
for instance, when national institutions are
not effective enough in delivering benefits and
FIGURE 4.10:
Globally, pension coverage varies widely
Source: ILO 2014a.
133