Illustrative image (internet)

Social Security provides financial protection for our nation’s people, supporting Americans throughout all of life’s journeys.

Population ageing is a global phenomenon, and is particularly true in the Americas. In 2022, Latin America was home to 88.6 million people aged 60 or older, representing 13.4 per cent of the total population—a figure which is expected to reach 16.5 per cent by 2030 (ECLAC, 2022). The picture in North America is similar. In the United States, the decade from 2010 to 2020 saw the largest‑ever increase in the population aged 65 or older in both absolute and relative terms (U.S. Census Bureau, 2023), and in Canada, people aged 65 or older represented nearly a fifth of all Canadians (19.0 per cent) in 2021, up from 16.9 per cent in 2016 (Statistics Canada, 2022).

Illustrative image (internet)

Old-age poverty and income insecurity, already a concern for many governments across the Americas, will continue to demand the attention of policymakers as population ageing accelerates. Informality, labour market inequalities, and changes in employment patterns have meant that many people reach retirement age with little or no access to an adequate contributory pension or retirement savings. In Latin America, recent data indicates that only 51.9 per cent of people over 65 receive a pension and 34.5 per cent have no income at all from either labour-related earnings or a pension (ILO, 2022).

To address the income security needs of an ageing population, many governments in the region have implemented reforms to close the pension coverage gap. In addition to efforts at strengthening coverage and providing guaranteed minimums under contributory systems, governments have introduced social pensions that provide benefits regardless of contribution history (ISSA, 2021). Such programmes generally take the form of universal benefits that cover all, or nearly all, of the population, pension-tested benefits that reach all those not receiving a contributory pension, or poverty-targeted programmes aimed at those who fall below a given income threshold. In doing so, they complement the contributory pillars of social security systems (see Figure 1 below).

Illustrative image (internet)

Usually financed from general revenues, social pensions can reduce poverty and narrow inequality by ensuring a minimum standard of living to individuals without sufficient income in old age (either because they were not fully integrated into formal employment during their working lives or because of other barriers to labour force participation).

“Without a pension and post-retirement health care, you have people leaving this company after 30 years’ service with nothing more than a, ‘Have a nice day'"