1. The Effects of the Crisis in Social Security Systems ACTRAV – ETUI Torino 03/09/2009
Fabio Durán Valverde
Jesús García Jiménez

2. THANK YOU VERY MUCH! DEATH PERMANENT DISABILITY TEMPORAL DISABILITY
ACCIDENTS AT WORK
MATERNITY
ILLNESSS
MEDICAL
ASSISTANCE
UNEMPLOYMENT
DISABILITY
AGEING
PENSIONS
FAMILY
ALLOWANCES
SHORT-TERM
BENEFITS
LONG-TERM BENEFITS
THANK YOU VERY MUCH!

3. BENEFICTS BASED ON THE FAMILY
SOCIAL CONTROL OF MANAGEMENT TRIPARTISM - PARTICIPATION C
FULL HEALTH CARE FOR THE WHOLE FAMILY, And right to economic benefits in illness situations.
C. 102 – 130 – R134 Y 69
MATERNITY PROTECTION C. 183 R191
RIGHT FOR SOCIAL SECURITY BENEFITS OF PROTECTION TO FAMILY AND CHILDREN. C. 102

4. BENEFICTS BASED ON THE JOB
SOCIAL CONTROL OF MANAGEMENT TRIPARTISM - PARTICIPATION C
RIGHT FOR JUST PENSIONS
(Retirement - Disability - Widowhood) C – R131
RIGHT FOR HEALTH AND ECONOMIC BENEFITS   FOR OCCUPATIONAL ACCIDENTS AND DISEASES
C. 102 – R121
PROMOTION OF PRODUCTIVE EMPLOYMENT AND
RIGHT FOR UNEMPLOYMENT BENEFITS C – R176

5. COMPONENTS/PILLARS OF A THEORETICAL SOCIAL SECURITY SYSTEM
COMPLEMENTARY AND FREE LEVEL
PRIVATE (Or by collective bargaining)
INDIVIDUALLY FUNDED SYSTEMS
CONTRIBUTORY LEVEL Funded by the quotations from Workers and Employers
PAY-GO SYSTEMS
SOCIAL FLOOR
NON CONTRIBUTORY BENEFITS FUNDED BY TAXES (f.e: HEALTH CARE; NON-CONTRIBUTORY PENSIONS)

6. General Implications of the crisis (different way ♀ / ♂)
Lower rates of economic growth
Recession in various countries
Increase in unemployment and underemployment rates (it is estimated 50 millions )
Less employment opportunities
Probable increases in situations of precarious work
Impact on social security systems
Other impacts: poverty, inequality, social conflict, etc.

7. Impact on social security systems (different way ♀ / ♂)
Reduction in the level of funds of systems that work under collective and individual capitalization – financial crisis
Increase in contributory evasion and delinquency – easy escape valve for enterprises – financial and economic crisis
Contraction of affiliation to social security in the formal and informal economy – employ crisis
Contraction of collection – economic and employ crisis
Reduction of substitution rates systems of individual accounts – between 10% and 30%, depending on the type of fund – financial crisis
Increase beneficts by unemployment, increase spending. Employ crisis
Reduction of the real cost of health – social security institutions – effects of quality and quantity of attention given

8. Elements for discussion and analysis – an ILO position
Paygo Systems vs individually funded systems: demographic risk versus financial risk
The sustainability of the system: ageing and coverage
Individually funded Systems, of public or private administration, depends more on capitalization to guarantee certain levels of benefits. The crisis affects those systems that are most capitalized.
Social Security as a human right: Universal Declaration of Human Rights. Philadelphia Declaration. Nature and object of an instrument for protection. It is not about conventional financial instruments. They are not savings accounts.

9. Elements for discussion and analysis – an ILO position (continuation)
Public nature of social security systems, independently from how they are financed and managed.
The system’s mission: provide protection. ILO’s position: “benefits must be secure and non- discriminatory”. The instruments must guarantee not only solidarity but SECURITY as well.
If individuals are obliged to forecast through contributions, the State must ensure the security of funds. The position of the ILO: ILC The State is the ultimate financial guarantor.

10. Some data

11. Nominal returns to date of reserve funds selected OECD countries
Nominal returns to date of reserve funds selected OECD countries. Source ISSA

12. Nominal returns to date in pension funds selected by the OECD
Nominal returns to date in pension funds selected by the OECD. Source: ISSA

14. The most important social security problem in Latin America is low coverage…the crisis can decrease contributory coverage (%)

15. In facing the crisis, the state must play an important role
In facing the crisis, the state must play an important role ... and in facing with the structural problems of social security
The State as the ultimate financial guarantor.
Responsibility of the State and of its administrators, respect to transparency in providing information to members. Prohibit misleading information: rates of return and substitution rates. Responsibility of the institutions of regulation and supervision (Superintendents). The State must assume responsibility of minimal profitability for soon-to-be retirees and those people that dealt with changes in their retirement expectation, be it in in either in pension amounts and retirement age .
The State should assume responsibility for minimum return for people who are close to retirement who were abruptly changed their pension expectations, either in amounts of pensions or retirement ages.
Implement a means of ensuring a minimum return over the long term, collective and individual: guaranteed minimum return and minimum benefits.

16. In facing the crisis, the State must assume an important role… (…continuation)
Eliminate or regulate the instruments that compromise the security of benefits: “programmed rent”, “high-risk funds”, etc.
Strengthen the pressure to combat tax evasion and improve coverage to pay ... or at least maintain the level of coverage during the crisis
Facilitate the access and duration to unemployment benefits (where they exist)
Minimize the impact on poverty. The crisis will greatly effect those whom do not have social protection. Basic floor for social protection - strengthen systems aimed to the poorest – creation or strengthening of assistance programmes.

17. MUCHAS GRACIAS! PREGUNTAS?