A Critical Literature Review on Financing of Social Security Schemes
Author | : William Ambaka Akwimbi |
Publisher | : |
Total Pages | : 0 |
Release | : 2014 |
ISBN-10 | : OCLC:1375288646 |
ISBN-13 | : |
Rating | : 4/5 (46 Downloads) |
Book excerpt: Social security schemes around the world face the challenge of generating sufficient and sustainable funds to cater for their ever increasing needs. Although they play a major role in the fight against poverty, in most countries such institutions have of late been plagued with the problem of under-funding resulting in increase in pension deficit. This paper presents a critical review of the main features of those plans and the key issues they face. The review shows that there were five basic challenges that were particularly critical in the financing of pension funds both in developed and EMEs. These included inadequate regulatory capacity; imprudent investment, macroeconomic instability; poor corporate governance; inability to extend coverage; and design issues such as choices between Defined Benefit and Defined Contribution schemes, funding versus PAYG principles and public versus private management. It also shows that the influence of these factors varies between countries. However, the paper shows that there is scanty or lack of information on researches done on social security schemes in Africa, particularly on factors that influence pension funding.