Pension Systems Must Enable Older Persons to Live With Dignity, IACHR Says

June 11, 2024

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Washington, D.C. – The Inter-American Commission on Human Rights (IACHR) and its Special Rapporteurship on Economic, Social, Cultural, and Environmental Rights call on States in the Americas and the Caribbean to protect the right to social security, and more specifically the right to a pension, through sustainable and predictable pension systems. Reforms of pension management models, rules concerning access to pension funds, and adjustments in pension payout amounts must seek to enable older persons to live with dignity and to enjoy benefits that ensure adequate living conditions.

In terms of pension management models, some States have fully nationalized private pension funds, while others have prescribed mandatory contributions to national pension systems to ensure these are adequately funded. All changes made in pension management models must ensure transparency and sound financial and administrative management of the relevant funds, and they must identify the authorities in charge. The State must regulate and audit fund management when it is conducted by private sector stakeholders.

Some States allow access to pension funds managed by private institutions before the beneficiary reaches the retirement age. As noted by the Inter-American Court of Human Rights, allowing early access to pension funds may create contingencies in old age that jeopardize the assets of older persons and force them to sell their possessions or get jobs at a vulnerable stage in life. State regulation of private pension fund managers must therefore ensure a management that enables individuals to have enough resources to enjoy their old age with dignity.

The IACHR further notes debates about the legal status of pension funds that are not claimed by beneficiaries. The IACHR stresses that pension funds are part of an individual's assets and are therefore protected by the right to property, so any action concerning unclaimed funds must comply with the rules concerning restrictions of the right to property according to the American Convention. All regulations affecting private retirement fund managers must therefore protect the exercise of older persons' right to property (including their right to freely access their assets), as well as preventing abuse and the unlawful alienation of the property of older persons.

New formulas have been adopted in the Americas to periodically adjust pension payout amounts in high inflation contexts. According to the International Labour Organization (ILO), a basic income for older adults guarantees social protection, and any changes in pensions must ensure that this income remains sufficient. The Inter-American Court has stated that payout amounts must be sufficient and last long enough to enable pensioners to enjoy adequate living conditions and sufficient access to healthcare, without discrimination.

The IACHR said in its report Human Rights of the elderly and national protection systems in the Americas that several countries in the region have programs in place to support older persons so they may have easy access to pensions and enjoy legal assistance in that field if needed. The ILO notes as a principle that all pension system stakeholders must be involved and consulted in efforts to develop social security policies. The IACHR and its Special Rapporteurship on Economic, Social, Cultural, and Environmental Rights therefore call on States to ensure that older persons are involved in pension reform processes.

The Commission and its Special Rapporteurship on Economic, Social, Cultural, and Environmental Rights stress that the Inter-American Convention on Protecting the Human Rights of Older Persons says that all States must adopt all measures necessary to ensure older persons' effective enjoyment of the right of life and the right to live with dignity in old age, until the end of their lives and on an equal basis with other segments of the population.

Article 17 of the Convention mentions the right to social security, as a crucial element to protect older persons so that they may live with dignity. This right is also held in the American Declaration (Article XVI), the Charter of the Organization of American States (OAS) (Articles 45 and 46), the American Convention (Article 26), and the Protocol of San Salvador (Article 9), as noted by the IACHR's Special Rapporteurship on Economic, Social, Cultural, and Environmental Rights in its compendium on economic, social, cultural, and environmental rights.

States must ensure that any changes introduced in their pension systems seek to ensure life with dignity in old age through funds that are predictable, sufficient, managed in administratively and financially transparent ways, and fiscally, economically, and financially sustainable, as required by the relevant international instruments. States must move as fast and as effectively as possible to fully enforce the right of all older persons to a pension, and therefore must not take any regressive measures concerning pensions. The IACHR stresses that the right to a pension must not only be protected through contributory systems, but also through non-contributory schemes designed for employees without social security contributions and for individuals who are caregivers for family members.

A principal, autonomous body of the OAS, the IACHR derives its mandate from the OAS Charter and the American Convention on Human Rights. The Inter-American Commission has a mandate to promote respect for and to defend human rights in the region and acts as a consultative body to the OAS in this area. The Commission is composed of seven independent members who are elected in an individual capacity by the OAS General Assembly and who do not represent their countries of origin or residence.

The Special Rapporteurship on Economic, Social, Cultural, and Environmental Rights is an autonomous office of the IACHR and was especially created to brace the promotion and protection of economic, social, cultural, and environmental rights in the Americas, leading the Commission's efforts in this field.

No. 133/24

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