Download Actuarial Review of The National Social Security Fund

Social Protection Expenditure and
Performance Review (SPER)
&
Social Budgeting
in Cambodia
Jean-Claude Hennicot
Consulting Actuary
OUTLINE
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Introduction
Social Protection in Cambodia
SP Expenditure & Performance Review
The Social Budget Concept
Social Budgeting
The ILO Social Budget Model
Challenges in Cambodia
Next Steps
Introduction
Social Protection (ILO):
1. Access to affordable Heath Care for all
2. Income Security for all, in case of unemployment,
sickness, maternity, old age, disability, or death
3. Family Allowances
 Benefits for families with children
4. Social Assistance/Welfare
 Transfers to the poor and vulnerable
See: World Labour Report, ILO (2000)
Social Protection in Cambodia
• Rectangular Strategy, phase II
• NSDP, update 2009 – 2013
• Social Security Law, 2002
• Law for Disabled Persons, 2010
• NSPS, 2011 - 2015
Social Protection in Cambodia
Obstacles for the extension of SP coverage:
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High poverty rate
High share of informal employment
Limited fiscal space
Legal and regulatory framework incomplete
Administrative capacity of new institutions
Infrastructure (e.g., hospitals)
Social Protection
Expenditure and Performance Review
(SPER)
What is it?
 SP Diagnostic Tool developed by ILO
 Comprehensive overview and assessment
of a country’s Social Protection system
 Helps to identify coverage gaps
 Informational tool for policy makers and
development partners
SPER
Comprises the following parts:
 Review of country setting
• Demography, economy, and labour market
• Social indicators (e.g., poverty, fertility)
 Overview of SP system: schemes, benefits,
benefit levels, and governance
 Assessment of SP Financing: Compilation of
Expenditure & Income ( Social Budget)
 Assessment of Coverage and gaps
 ‘Performance’ of system
The Social Budget Concept
a) Annual Rec. Expenditure:
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Health Care
Pensions
Short-term Benefits
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Employment Injury
Family Benefits
Social Assistance/Welfare
Annual SP ‘Income’:
• Funding from National Budget
• Contributions (EE & ER)
• Funding from ODA & NGOs
• Return on Investment
b) Annual change in Reserves
TOTAL EXPENDITURE
=
TOTAL INCOME
The Social Budget of Cambodia
• Health Care
– National Budget (Recurrent Operation cost)
– ODA-funded benefits (e.g., HEF)
– Contributory schemes (CBHI, HIP)
• Pensions
– NSSFC (old age, disability, survivor pensions)
– NFV (old age, disability, survivor)
• Short-term Benefits (sickness, maternity, death)
– NSSFC maternity & funeral grants
– NFV funeral grants
The Social Budget of Cambodia
• Employment Injury
– NSSF: medical care, cash benefits, pensions
– NSSFC: cash benefits, pensions
– NFV: disability and survivor pensions
• Social Assistance
– MOSVY benefits (e.g., Food aid)
– Cash transfer schemes (e.g., CCT)
– In-kind Benefits (e.g., school feeding)
• Other schemes/provisions
See NSPS: PWP, VT, Child Labour Prevention, etc.
The Social Budget
Main Institutions and development partners:
• Council for Agricultural and Rural Development
• Ministry of Social Affairs, Veterans, and Youth
(NSSFC, NFV, Social Assistance)
• Ministry of Labour and Vocational Training
(NSSF, TVET)
• Ministry of Health (PH, and CBHI)
• Ministry of Education, Youth, and Sports
• Development Partners: USAID, ADB, GIZ, WFP,
UNICEF, World Bank, GF, ILO, GRET, etc.
Social Budgeting
‘Picturing the Future’
Projecting the Social Budgets of the future
a) Based on current schemes and provisions
 Future cost of existing provisions
(Status Quo Scenario)
b) By including alternative policy options
 Cost and viability of new policy provisions
(Alternative Scenarios)
The ILO Social Budget Model
Demography
Source: NIS, Population Census 2008
Population Projection
 ILO generic Population Projection Model
 Uses Single-age cohorts M/F (age 0 – age 99)
 Mortality profile from UN model life tables
 Age-specific fertility rates: use regional patterns
(UN DESA) or country data if available
 Adjust for int. Migration (if data available)
 Main Assumptions (preliminary):
 TFR to decrease to 2.1 by 2025
 LEB to increase to 67.4 (71.7) for M(F) by 2025
 Sex ratio at birth: 1.05 (M/F)
Population Projection
Source: ILO projection (preliminary)
Labour Force projection
Employment
Employment
Projecting Employment
actual
Source: ILO projection (preliminary)
projected
Employment Projections
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Paid Employees (‘formal economy workers’)
 Workers covered under statutory schemes:
- Government Employees (NNSFC)
- Private Sector Workers (NSSF)
 Dependents (if covered)
Residual (‘informal economy workers’)
 Self-Employed and unpaid family workers
Unemployed and inactive population
Poor versus Non-Poor
Economic Module
Projection of:
 GDP (from labour supply)
 Prices ( Indexation of benefits)
 Wages ( Contributions)
 Interest rates ( Income from Reserves)
 Use both real and nominal values
 Objective: model consistency
 Relationship between variables realistic
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Government Module
Projection of:
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Government Revenues
From national output (GDP)
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Sectoral Allocation of National Budget
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Allocation to social sectors:
 Health
 Social Protection
 Fiscal Space
Social Protection Module
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Develop Model for each scheme as required
Projection of scheme-specific variables
- Population Coverage by age/sex
- Beneficiaries by age/sex
- Benefits and expenditure
- Financial indicators
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Use actuarial model toolkit
(e.g., ILO pension model)
Social Budget Projections
A. Status Quo Scenario:
• Assuming no new SP schemes or provisions
• To be included:
a) All SP programs & provisions already in force
b) All enacted programmes awaiting implementation:
- Contributory SHI for private sector (NSSF)
- Contributory Pensions for private sector (NSSF)
- SHI for Government Employees ?
- Disability pensions ( Disability Law)
- Other programmes outlined in NSPS
• Objective: Costing of SP system (NSPS +)
Status Quo Scenario
Projection of Income & Expenditure based on:
• Existing benefit provisions and entitlements
• Expected development of macro framework
(labour market, wages, fiscal revenues, etc.)
 Use realistic, ‘most-likely’ approach
Main challenges:
• Future scope of ODA-funded programmes
• Implementation plans for enacted policies:
e.g., NSPS, NSSF (SHI and pension branches)
Projection Scenarios
B. Alternative Scenarios
 ‘Costing’ of:
• Policy Options under consideration
• Other Policy Options for illustration
Still to be defined, e.g. SP Floor Components of the:
a) Universal Health Protection
b) Cash transfers for all Children
c) Universal pensions for elderly & disabled
d) Income security for working age population:
(e.g., Cash Transfers to the poor?)
Alternative Scenarios
Costing of Policy Options helps to:
• Assess feasibility and timeframes
• Illustrate Trade-offs between policies
( fiscal space)
• Setting of Priorities and long-term SP
development agenda in Cambodia
 Tool for long-term policy making
Challenges
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Availability of data
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Many actors (line ministries, DP)
 No centralized database
 No standardized financial reporting
 Scarce data for off-budget programmes
(mainly ODA and NGO-funded schemes)
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New Schemes / Provisions
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Design process still ongoing
 Timeframes for Implementation?
Next Steps
• Complete & Update Database
• Revise draft SPER for comments (Dec 11)
• Define policy options for costing
( national policy priorities)
• Support CARD in costing NSPS (Jan 12)
• Finalize Social Budget projection (?)
Thank you
Questions & comments
are welcome