Annuity
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An investment vehicle offered by an insurance company which provides a guaranteed stream of income until death.
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Cash transfer programmes
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Programmes that transfer cash to eligible people or households. These programmes include child allowances, social pensions, needs-based transfers and conditional cash transfers.
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| Categorical targeting |
A targeting method which aims to identify beneficiaries by their belonging to an easily-identifiable 'group' or 'category'. Common categories used for targeting include female-headed households or older people. |
| Claw-back |
Recover benefits from the social pension from wealthier older people through the tax system. |
Conditional cash transfers
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Money provided to poor families conditional on them making investments in human capital, such as keeping their children in school or taking them to health centres on a regular basis.
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Contributory pension
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A pension paid, often at a flat rate, to a person with a full record of contributions, or pro rata to a person with an incomplete contributions record. See earnings-related pension. |
Defined benefit (DB)
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A pension scheme where the pension is related to the members' salary or some other value fixed in advance. |
Demography
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The scientific study of human populations, including their size, composition, distribution, density, and growth, as well as the causes and socioeconomic consequences of changes in these factors. |
Dependency ratio
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The dependency ratio is an age-population ratio of those typically not in the labour force (the dependent part) and those typically in the labour force. |
Earnings-related pension
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| A pension whose benefits are positively related to the worker's earnings. The relationship may be strictly proportional, or less than strictly proportional. |
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Error of exclusion
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The exclusion of a person who meets eligibility criteria from a programme. |
Error of inclusion
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The inclusion of a ineligible person in a programme. |
Fiscal space
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Room in a government's budget that allows it to provide resources for a desired purpose without jeopardising the sustainability of its financial position or the stability of the economy (Heller, 2005). |
Formal sector
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Economic sector where inhabitants' economic activities are regulated and protected by formal institutions. In its functioning the formal sector is often closely interlinked with the informal sector. The vast majority of the world's population is excluded from the formal sector. |
Funded
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Pension schemes whereby pension contributions are paid into a fund which is invested and pensions are paid out of this pot. |
GDP per capita
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Income per person in a population. Per capita income is often used to measure a country's standard of living. |
| Geographical targeting |
A targeting method which uses geographical location to identify beneficiaries. |
Gross Domestic Product
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A measure of economic activity in a country, calculated by adding the total value of a country's annual output of goods and services. |
Healthy life expectancy
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An index that combines measures of mortality and health to indicate expected years of life in good health. |
Household budget survey
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A random sampling of the population which the Central Statistics Office conducts from time to time to show the current pattern of expenditure in households. |
Human capital
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People's innate abilities and talents plus their knowledge, skills and experience that make them economically productive. Human capital can be increased by investing in healthcare, education, and job training. |
Informal sector
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Economic sector where inhabitants' economic activities are not regulated and protected by formal institutions. In its functioning the informal sector is often closely interlinked with the formal sector. The vast majority of the world's population is part of the informal sector. |
Life-time consumption model
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An economic theory which suggests that people aim to smooth consumption from year to year over their lives. Since their income tends to vary, they use saving and dis-saving to meet this aim, for example, building up a pension pot while in work and running it down during retirement. |
Longevity
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Length of life. |
Means test
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A targeting method based on income that seeks to collect comprehensive information on household income and/or wealth and verifies the information collected against independent sources. |
Occupational pension
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A pension that is provided via the employer. |
Pay as you go
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Pay as you go is found in the state system and in unfunded public sector pensions. Here pension rights represent a claim against the totality of future GDP enforced via future contributions or taxes which could fall under an element of GDP. |
Pensions-testing
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A targeting method which aims to exclude those already in receipt of a pension. |
Poverty headcount ratio
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Poverty headcount ratio at the national poverty line is the percentage of the population living below the national poverty line. The World Bank's "global" poverty measures have usually been based on an international poverty line of about US$1.25 ppp (purchasing power parity) a day. |
Poverty lines
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Cut-off points separating the poor from the non-poor. They can be monetary (for example, a certain level of consumption) or non-monetary (for instance, a certain level of literacy). The use of multiple lines can help in distinguishing among different levels of poverty. |
Progressive tax
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A tax on income in which the tax paid as a proportion of income increases as income increases. |
Provident fund
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A form of savings which may be mandatory and are defined contribution schemes that pay out the contributions made and interest accumulated as a lump sum on retirement or other predetermined circumstances. Participants may be able to receive part in cash and part as an annuity. Typically, equal contributions are made by both employer and the employee. |
Proxy means test
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Proxy means tests generate a score for applicant households based on observable characteristics of the household, such as the location and quality of its dwelling, its ownership of durable goods, demographic structure of the household, the education and, possibly, the occupations of adult members. Eligibility is determined by comparing the household's score against a predetermined cutoff point. |
Purchasing power parity
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PPP stands for purchasing power parity, a criterion for an appropriate exchange rate between currencies. It is a rate such that a representative basket of goods in one country costs the same as in another country if the currencies are exchanged at that rate. |
| Regressive tax |
A tax on income in which the tax paid as a proportion of income decreases as income increases. |
Replacement rate
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This measures income in retirement as a percentage of income before retirement. |
Safety net
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Non-contributory transfer programmes targeted in some manner to the poor and those vulnerable to poverty and shocks. |
Savings
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Income not used for current consumption. |
| Seignorage |
Profit on the issue of coinage by government, representing the difference between the face value of currency issued and its cost of production including the cost of base metals. IMF (1996). |
| Social pension |
A non-contributory cash transfer paid regularly to older people by government. |
| State pension age |
The age at which an individual can claim their state pension. |
| Targeting |
The effort to focus resources among those most in need of them. |
| Transfer payments |
Payments from the government to individuals used to redistribute a country's wealth. Examples are pensions, welfare, and unemployment benefits. |
| Universal social pension |
Universal social pensions are regular cash transfers paid to all older citizens by government. Unlike contributory pensions, they do not require any previous contributions from recipients. |
