Social Protection

Building social protection floors
and comprehensive social security systems

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Thematic areas

Old-age pensions

Providing adequate income security for all older people

Baseline

  • Pensions are the most prevalent form of social protection globally. Worldwide, 79.6 per cent of individuals above the retirement age receive some form of old-age pension. Nonetheless, more than 165 million individuals above statutory retirement age do not receive a pension.
  • In many countries, especially those with widespread informal employment, extending contributory pensions has been challenging. The introduction of tax-financed pensions provides an important source of income for older persons, especially for previously excluded groups. Yet, in some countries, benefit levels are insufficient to guarantee a social protection floor for older persons.
  • The trends to expand and adapt pension systems exhibit significant variability across and within regions. In countries boasting extensive and well-established social protection systems, where populations are ageing, the primary challenge lies in preserving a delicate equilibrium between financial sustainability and pension adequacy. Other countries still face extension- and financing-related challenges in their pension systems, such as low economic development, pervasive informality, limited contributory capacities, poverty, fiscal resource constraints and increases in the cost of living.
  • The climate crisis threatens the financial sustainability and adequacy of pension schemes. Consequently, pension schemes must adapt to contend with climate-related risks to ensure long-term sustainability and protect the quality of life of beneficiaries. Pension funds can also help combat the climate crisis through strategic investments in sustainable and low carbon assets. By aligning their investment strategies with environmental sustainability and embracing responsible investment principles, pension funds can become key players in global mitigation efforts, ensuring a sustainable future for all generations.
Source: World Social Protection Report 2020-22: Social protection at the crossroads - in pursuit of a better future International Labour Office - Geneva: ILO, 2021

Standards and Guiding Principles

Key resources

Approach and Technical Support

The ILO advocates for a rights-based approach to the protection of older persons, grounded in international human rights and social security standards. These standards reflect a global consensus on the principles that should guide the development of inclusive and sustainable social protection systems. 

In line with the international standards adopted by its members, the ILO provides a comprehensive range of services in the area of old-age pensions. Additionally, in response to evolving challenges such as demographic transitions, economic fluctuations, and the expansion of informal employment, the ILO is committed to strengthening its technical support for pension systems—particularly old-age pensions.

The objective is to ensure the long-term sustainability of these schemes while assisting institutions in formulating policies that align with the principles and minimum requirements established in international social security standards. 

The ILO provides technical support to its Member States through the process of evaluation, development, and implementation of social protection policies in the area of pensions. To that aim, the ILO has developed a series of quantitative tools that form part of the Quantitative Platform on Social Security (QPSS), including the ILO/PENSIONS actuarial model, which aims to assess the expected financial impact of the introduction of changes to pension systems.

A critical issue for the ILO is that actuarial work and its linkage to policy design should be framed within international social security standards as well as comparative best practices. The ILO Social Security (Minimum Standards) Convention, 1952 (No. 102), which served as the blueprint for the development of social security worldwide, states that the periodic realization of actuarial studies and calculations is the main way in which the State can assume its general responsibility for the due provision of social security benefits (Article 71.3). In this context, the technical assistance provided by the ILO at the country level is informed by the guiding principles embedded in international ILO standards, in particular:

  • designing sustainable and universal pension systems based on collective financing
  • combining contributory and non-contributory components where possible
  • ensuring predictable benefits guaranteed by law.

According to the ISSA-ILO Actuarial Guidelines, actuarial work should be adequately linked to national and institutional needs to undertake reforms and improve systems, both in the design of the schemes and its managing institutions, and in the building of institutional capacities.

Partnerships

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Developed jointly by the ISSA and ILO, the ISSA-ILO Actuarial Guidelines provide guidance to actuaries and other social security professionals undertaking actuarial work for social security schemes, as well as social security institutions, policy-makers and other stakeholders overseeing or reviewing actuarial work.
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The International Monetary Fund (IMF) and the ILO have launched a collaborative initiative aimed at supporting the sustainable extension of fiscal space for social protection in multiple countries. As part of this joint effort, the two organizations are working together in up to 15 countries to develop evidence-based policy solutions that strengthen social protection systems while ensuring macroeconomic stability. Through this collaboration, the IMF and ILO aim to provide technical assistance, policy advice, and capacity-building support to participating countries, ensuring that social protection systems are both fiscally viable and responsive to the needs of vulnerable populations.

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Stern-Plaza, Maya
Old-age
10.03.2025