Pension systems in many parts of developing Asia are unprepared and underfunded for the region’s rapidly ageing population, according to a book launched on Tuesday by the Asian Development Bank (ADB).
“Across Asia, great divides exist in pensions available in rural and urban areas, between retirees from the public and private sectors, and those leaving the informal and formal job sectors,” ADB principal economist Donghyun Park said.
“Without far-reaching reforms, the financial burden of these schemes on future workers may become more than they can bear.”
The book examines pension systems in China, Indonesia, South Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
According to Park, in Cambodia pensions and old-age saving schemes are limited to civil servants and war veterans.
“As a result, only a small segment of the working population is covered.”
“Benefit levels do not provide income security and barely enable pensioners to meet basic needs,” he said. “The average civil servant’s pension is about US$60 a month, while the average veteran receives $23 ar month.”
Six per cent of Cambodia’s population was aged over 60 in 2010, according to Pension Watch, an online resource for policy-makers and development practitioners on non-contributory pensions.
The projection for 2050 lies at 17 per cent.
According to Vuthy Kim, project manager at the Cambodia Retirement Village, the Cambodian population is ageing rapidly.
He said there was no overall pension system in Cambodia and elderly people relied on their children’s support.
“This has changed a lot in recent decades, and the support from children is not enough.”
In traditional Cambodian culture, children took care of their parents and grandparents, but the Khmer Rouge regime had left some people without families and many young people had left home to find work in the cities or in other countries, Kim said.
To contact the reporter on this story: Anne Renzenbrink at [email protected]