India, China get a pat on the back from ILO1 min read . Updated: 20 May 2015, 12:27 AM IST
ILO says Asian countries, including India and China, have done substantially well in making provisions for legal coverage of old-age pension
New Delhi: The International Labour Organization (ILO) said Asian countries, including India and China, have done substantially well in making provisions for legal coverage of old-age pension.
In Asia, just over 10% of the working-age population was legally covered in 1990. This number almost trebled between 1990 and 2000, and doubled again from 2000 to 2013, ILO said in a report released on Tuesday.
“This expansion was largely supported by the development of non-contributory pension and by the introduction of legislation allowing voluntary affiliation to contributory schemes. The two largest countries in the Asia region, China and India, provide important examples," ILO said in the report titled World Employment and Social Outlook 2015.
The global labour body said the trend in the past few years was unprecedented in terms of the intensity and speed of expansion. Between 2000 and 2013, at least 18 countries in the region introduced reforms to increase pension coverage. “In India, legal pension coverage jumped from less than 5% in 1990 to 33% in 2000 and more than 80% in 2013," it said.
“The main reason is that voluntary affiliation to the New Pension Scheme was made available in 2009 to nearly all Indian citizens. The National Pension Scheme, or New Pension Scheme (NPS), was operationalized on 1 January 2004, originally for state government and public sector employees. Since 1 May 2009, all Indian citizens aged 18-55 can open an NPS account on a voluntary basis; however, there is no matching contribution from the government in the open system," the ILO report said.
ILO said that in 2009, China started a process of extension of pension coverage that aims to achieve universal coverage by 2020. The introduction of the rural pension scheme in 2009 and the urban pension scheme for workers otherwise not covered in 2011 were the first steps to consolidating the two new pension schemes.
Globally, in 2013, 77% of people of working age were legally covered by an old-age pension, compared with 47% in 2000 and 32% in 1990.
A labour ministry official in New Delhi said that over the past few years, social security-like pension had caught the attention of the government. The Employees’ Pension Scheme (EPS) under the Employees’ Provident Fund Organisation had also helped the cause since 1995. The official said with expansion of the EPF Act, more workers would come under EPS.