Towards more effective old age security

Abstract

A convergence of factors has brought the senior citizen sharply into focus. Increasing life expectancy has led to an expanding grey population and, with the concomitant economic and social changes such as rising inflation and the breakdown of traditional support structures like the joint family. providing for one's sunset years has assumed importance as never before. Significantly, the UN has declared 1999 as the International Year of Older Persons.

Provision for the elderly is usually channelled through the 'four pillars' of social security benefits, employer pensions, private pensions and part or full time 'rehirement'. Pension funds, particularly in developed countries. are phenomenally large and constitute a sizeable percentage of the GDP. They are also an ideal source of the long term funds required for infrastructure development. Among the many presentations on pensions and social security in this time's Round Table, N M Govardhan provides an overview of the pension issues and concerns world- wide, the design of pension products, the regulatory and actuarial aspects involved. John Mungall probes the role of insurance companies in pension funds while H O Sonig details the pension schemes of LlC in India and underscores the connection between the popularity of schemes and the tax benefits granted to them. S Gopalakrishnan emphasises the need for the insurance industry to capitalise on strategic initiatives such as data warehousing, E-commerce and componentisation.

With increased life expectancy and the steady decline in the ratio of the size of the workforce to the pensioner population, state pension arrangements are coming under increasing pressure. There is also a discernible shift from defined benefit plans to defined contribution plans. Against this background, K Sriram looks at the development of new pension products, in particular their financing aspects. Nalin Thakor surveys the neglected area of health care programmes in India and outlines ideas that will provide adequate medical care while containing costs.

Most benefit schemes exclude the vast majority of people who are not employed in the organised sector. N Balasubramanian outlines a social security scheme where the focus is on social benefits rather than employee benefits. Sheilu Sreenivasan, providing the silver lining to the grey cloud, assures us that by 2025, advances in medical diagnosis, microsurgery, nutrition and lifestyle management will improve later life health and vitality, thus making ageing optional and not inevitable.