This themed issue contributes to European research on the role of front-line work in the implementation of welfare-to-work policies. A number of factors underline the relevance of such study. First, the focus on activating and disciplining the unemployed seen in many countries may on the surface look similar. However, a closer look at these policies and how they unfold in different contexts reveals many and interesting differences. While all contain a certain level of disciplining and coercive elements, they also to a varying degree contain elements that focus on the upgrading of skills, building human capital and providing other types of support in promoting labour-market participation. In turn, these policies contain both people processing and people changing technologies that are used for different aspects of policy delivery. In addition, policy developments have gradually expanded the client group of these policies, including more hard-to-place unemployed, thus making the client group more heterogeneous. Finally, we have seen a strong political belief in the positive effects of using punitive sanctions. Research supports this belief when it comes to clients with high employability and limited problems besides unemployment, but the knowledge-base is rather shaky when it comes to the hard-to-place clients with substantial problems. Using punitive sanctions or other disciplining or coercive measures in frontline work has caused controversy and resistance. In order to qualify our understanding of welfare-to-work policies, we need to take a step closer to where these policies are translated into reality for the target group.

Although policy-makers and scholars have directed increasing attention towards collaborative innovation and knowledge development between frontline agencies and workers and other stakeholders such as citizens and researchers, empirical research has not focused on the (varying) assessment of collaborators regarding what knowledge is “appropriate” to develop. In this article, we examine such knowledge assessments by drawing on a comparative case study of two local innovation projects conducted by the Norwegian Labour and Welfare Administration (NAV) in a four-year service innovation programme. Although they responded to the same call, the projects involved development of two very distinct types of knowledge; one dealt with practice-based knowledge and the other with evidence-based knowledge. We show that whereas the former knowledge type was contested and difficult to transform into practice, the latter prompted few (if any) challenges and was implemented on a relatively large scale. These two projects point to the possible existence of a hierarchy of knowledge in the labour and welfare services, where evidence-based forms of knowledge and methods are regarded as more legitimate and appropriate than forms of knowledge placed “lower” in the hierarchy. We discuss the reasons for and implications of this apparent hierarchy of knowledge for frontline labour and welfare services.

The United Kingdom, as an exemplar liberal welfare state, has been characterized as in the vanguard of “work-first” activation – deploying high levels of compulsion and standardized employability services that seek to move people from welfare to work as quickly as possible. However, despite the extension of welfare conditionality to excluded groups such as lone parents, government-led, work-first employability programmes have often proved ineffective at assisting the most vulnerable to escape poverty or even just to progress in the labour market. We argue that alternative approaches, defined by co-production and social innovation, have the potential to be more successful. We draw on a study of local services targeting lone parents led by third sector–public sector partnerships in five localities in Scotland. Our research identifies a link between programme governance and management (defined by co-governance and collaborative partnership-working) and co-produced street-level services that deliver benefits in terms of social innovation and employability. We draw on 90 interviews with lone parents, and more than 100 interviews with delivery stakeholders and street-level workers, to identify factors associated with positive social and employability outcomes. The article concludes by identifying potential lessons for the governance and delivery of future services targeting vulnerable groups.

The Swedish Social Insurance Agency (SSIA – Försäkringskassan) and its frontline staff have a key role in the implementation of activation policy. Drawing on ethnographic research conducted at local offices, this article investigates how the transparency ideal, as an integral part of the organizational governance of the activation policy, is negotiated and enacted in the everyday life of a welfare bureaucracy. The analysis shows the central role that the transparency ideal plays in the alignment of frontline staff with the normative regime of the agency. While the transparency ideal is central to the internal organizational life of the SSIA, the analysis shows how transparency is much less salient in relation to clients and other relations with the outside world.

European Union (EU) Member States have very diverse social security pension systems with respect to the types of schemes/benefits offered, their redistributive features, as well as the method and sources of financing adopted. Also, the role of the state in securing retirement in old age varies considerably across the EU. According to the European System of National and Regional Accounts 2010 framework, the pension obligations of EU social security pension schemes are now reported in the supplementary Table 29, based on the accrued-to-date liability method. Such a method does not allow the assessment of the financial sustainability of social security schemes, which are typically financed on a pay-as-you-go/partially funded basis, as well as the sustainability of public finances. In addition, while the contributory social security pension schemes, with or without non-contributory components, are included in Table 29, the non-contributory social security schemes are in principle excluded. This article aims to suggest how to enhance the transparency and cross-country comparability of Table 29 results at EU level, by disclosing additional information suitable for evaluating the financial status of contributory social security pension schemes, which would take into account not only the financing method adopted but also the type of benefits offered. From a policy perspective, such additional information would ensure that no certain types of social security schemes are promoted in the EU, and that the clarity and effectiveness of the role of the state in financing a social security pension scheme is enhanced.

This article provides insights into methodological and measurement considerations and challenges from an actuarial and social security policy perspective with reference to actuarial valuation work undertaken in the recent period. It aims at supporting the global discussion to improve the transparency of the reporting of financial liabilities of social security schemes linked to employment-based obligations (contributory), as these are often guaranteed by the government following social security funding rules such as pay-as-you-go and partially funded approaches. The article supports the actuarial profession’s engagement with experts in national accounting and public finance statistics towards providing improved guidance to national governments in presenting a fair and accurate picture of the financial position of their social security schemes with due and unbiased recognition of the social security policy approach decision of any given country. While the reflection of the financial position of social security schemes guaranteeing long-term benefits payable for life is most important in terms of possible public finance implications, care must be exercised in adopting a valuation methodology and indicators that are not biased and which do not distort the interpretation of its financial position. In this respect, challenges remain and there is ample scope for refining methodologies and adopting coherent accounting approaches encompassing policy decisions for funding purposes.

The article explains the role of the International Public Sector Accounting Standards Board (IPSASB) in setting accounting standards for the public sector, and the due process that is followed in setting those standards. The article explains the scope of the IPSASB’s current project on social benefits, and how this compares to the scope of social benefits in Government Finance Statistics (GFS)/System of National Accounts (SNA) as well as the IPSASB’s previous social benefits projects. The scope is wider than pensions, and wider than social security as social assistance is also included. The accounting principles that underpin the IPSASB’s current project are discussed and include the IPSASB’s definition of a liability, and the key role that a “past event” plays in that definition. This is contrasted with some of the actuarial approaches. The article then describes the potential past events that the IPSASB has considered to date in the project, and what impact liabilities from these past events would have on the financial statements. This comparison makes reference to pensions, where the financial impact of different past events will be greatest. The article sets out the IPSASB’s proposals in its recent Exposure Draft ED 63, Social Benefits, and also discusses the alternative view of three members on recognition and measurement. The article concludes by discussing the IPSASB’s current guidance in RPG 1, Reporting on the Long-Term Sustainability of an Entity’s Finances, and notes that the IPSASB is seeking views on whether it should undertake further work in this area.

The processes used to assess the financial sustainability of the Canada Pension Plan (CPP) and the corresponding reporting are recognized internationally as “best practices”. In the context of the international and multi-disciplinary debate about the most appropriate methodology for the measuring and reporting of social security assets and obligations, the experience and practices of Canada offer a number of important policy lessons. The article analyses the assets and obligations of the CPP using different actuarial balance sheet methodologies, i.e. open and closed group. It concludes that the balance sheets under the closed group with and without future benefit accruals methodologies do not reflect the nature of the partial funding approach of the CPP, whereby future contributions represent a major source of financing for future expenditures. As such, it is inappropriate to reach a conclusion regarding the Plan’s financial sustainability considering only the asset shortfalls determined under the closed group with and without future accruals balance sheets. The article asserts that measuring the Plan’s assets and obligations using the open group approach provides information that properly reflects how changing demographic and economic environments affect the long-term sustainability of the CPP. In contrast, using the closed group without future accruals approach may provide incomplete or even misleading information. Finally, the article discusses approaches used to report the financial state of the CPP, including both actuarial and financial reporting. It highlights the comprehensive disclosures approach adopted for the purpose of CPP annual reports and the Public Accounts of Canada.

The international statistical community has a growing interest in the liabilities of pension and social security systems. The System of National Accounts 2008 encourages countries to provide detailed information in a supplementary table on pensions. The IMF Government Finance Statistics Manual also encourages reporting of public-sector balance sheets as part of government debt, and the European Union (EU) has mandated that all EU Member States compile estimates of accrued-to-date (ADL) liabilities for all pensions, including public-sector pensions and social security schemes. The ADL liabilities for public-sector pensions, which are often defined benefit, and typically financed on an unfunded (pay-as-you-go) or partially funded basis, are likely to be very large in some countries, receive significant public scrutiny, and be misunderstood and/or misused. The article begins by reviewing the current requirements, disparity and ambiguity in existing accounting and actuarial standards. It notes the opportunities for “accounting arbitrage”, where countries can provide similar benefits in a different form to avoid placing these pension liabilities on the government balance sheet and/or to avoid required disclosure of pension liabilities. This article concludes that the ADL for social security and government-sponsored pension programmes has little or no meaning, does not provide any information about the fiscal sustainability of a country’s pension programmes and does not provide any useful information for comparing pension plans across countries. It argues that the best measure of fiscal sustainability for unfunded or partially funded pension programmes that are financed on a pay-as-you-go basis is the financing gap, and that this “open group” measure of fiscal sustainability should be published alongside the ADL, supplemented by information on coverage rates, replacement ratios and expenditures as a per cent of GDP. The article concludes that pension expenditures as a per cent of GDP is probably the single best measure for cross-country comparison.

The article is based on the International Actuarial Association (IAA) Social Security Committee’s principles-based paper with commentary on measurement and reporting obligations of social security retirement systems (SSRSs) with proposals for appropriate disclosure requirements, for consideration by national and international organizations when developing reporting standards in respect to SSRSs. The article argues that the method of measuring and reporting obligations should be consistent with the financing basis of the SSRS. In particular, SSRS financed on a pay-as-you-go (PAYG) or partially funded basis should use an open group method for measuring and reporting actuarial obligations. Only SSRS that purport to be fully funded should use a closed group basis, since SSRS are not analogous to large private-sector pension plans. For most PAYG and partially funded SSRS, accounting for obligations on a closed group basis would indicate huge actuarial unfunded liabilities, which might not be understood by the general public and could inappropriately create pressure to move towards fully-funded systems. The methodologies used for accounting and/or statistical reporting should enable the accurate assessment of the long-term financial sustainability of any SSRS without a bias for or against a particular financing approach. The article prefers measures of sustainability of a SSRS to measures of its funding level. A system that is fully funded currently may not be sustainable while a pure PAYG SSRS may be sustainable. In the case where there is a requirement to disclose obligations on a closed group basis, such disclosures should be supplemented by an open group analysis, with appropriate reconciliations and explanations (i.e. a multiple disclosure approach).

In a context of the increasing transparency of social security scheme design and financing, assessing the financial implications of the promises made to current and future retirees of a social security pension system has become a key issue. The central role played by actuaries in the financial evaluation of social security systems means that the debate regarding methods and assumptions to use in such an exercise is of interest to all actuaries, those who use their work and those whose decisions are based on their work. This, in theory, appears a rather technical debate. However, in reality, these deliberations have a much wider impact. The discussion around how to assess the implications of promises made by social security systems to current and future populations will affect the decisions taken regarding the key features of systems, in particular the social contract between generations. It also feeds into the debate regarding sustainability, inter- and intra-generational equity, and the adequacy of benefits as well as the robustness of systems; that is, how future changes to the economic and demographic environment will affect systems. This introductory article discusses the importance of this topic including the implications for actuaries, policy-makers and other stakeholders and then summarizes the seven substantive articles that comprise the special issue. These articles reflect different points of view, but also different experiences and environments – which adds to their value as contributions to this important debate. Finally, this introduction sets the context for the reader – to ensure that the technical aspects of the set of papers are considered within the wider framework of social security provision and financing.

This article compares the effectiveness and efficiency of a food and energy subsidy programme, which is currently implemented by the Tunisian government, and a universal child allowance programme that is discussed as an alternative to these subsidies. The empirical analysis is based on microsimulations on the poverty impact and the costs of both programmes based on Tunisian household survey data. Our results suggest that a universal child allowance is approximately twice as efficient (i.e. the cost of lifting one person out of poverty under a universal child allowance is half of the cost of lifting one person out of poverty using subsidies) in reducing poverty than the current food and energy subsidies. The article concludes that efficiency-enhancing social protection reforms are possible based on a universal approach. Such reforms can be achieved without resorting to narrow poverty-targeting as an alternative to the subsidies whose negative side-effects (e.g. non-negligible exclusion errors, incentives to informality and social tensions) and costs (both public and private costs related to intensive data collection to improve targeting) are usually overlooked or underestimated.

In Egypt, the Food Subsidy Programme (FSP) contributes greatly to social stability, yet there is academic and political pressure to reform the system to prioritize the effective targeting of the poor. This has been particularly so since the 2011 Egyptian revolution, and in the light of claims by the government and international organizations that the programme is relatively expensive and ineffective in targeting the poor. Accordingly, the ability to measure the programme’s targeting performance is crucial, not least to assess the targeting outcome of this anti-poverty intervention. Most previous studies of the Egyptian FSP address the challenges of exclusion and inclusion errors exclusively from an econometric approach. However, in this study a mixed approach method is developed to better explain the programme and to explore how its governance structure might play an important role in determining its effectiveness. This method generates both a statistically reliable measure of the magnitude of the targeting performance as well as a greater depth of understanding of the programme’s effectiveness in achieving targeting outcomes. Additionally, understanding the actual targeting mechanism should help policy-makers improve its effectiveness, and ultimately support a comprehensive reform to build an effective social protection system.

Processes of public policy formation and implementation in the Middle East and North Africa are underexplored. This article presents a case study in public policy reform, focusing on efforts to expand health insurance coverage in Egypt. The account draws on a thematic analysis of peer and non-peer reviewed literature and print media between 2005 and 2015, with a particular focus on the period to 2011. This analysis shows that reform initiatives failed for much of this period because of fundamental disagreements between key actors over the goals, proposals and the political process for change. The success of planned reforms in Egypt may well depend on the extent to which account is taken of the varied agendas and evolving power relations of these actors, especially given the profound political, social and economic challenges the Egyptian health system now faces.

The current refugee crisis requires new thinking and durable policies which move beyond simply meeting the short-term immediate needs of refugees. In the context of this protracted crisis, humanitarian response has included a focus on cash transfer programming as a way to support Syrian refugees in Jordan to meet their basic needs. While evidence on cash transfers in stable contexts has been well-documented over the last two decades, little is known about the potential effects of cash transfers on populations in protracted displacement. This article examines the economic and social effects of a UNHCR cash transfer programme for Syrian refugees in urban areas in Jordan. We find that almost all beneficiaries used the transfer to pay rent, and that this reduces stress and anxiety among beneficiaries. These effects are important, but depend on the continuation of cash transfer support. For longer-term impacts, assistance for refugees needs to move beyond short-term support and align better with national interventions and a broader enabling policy environment, including refugees’ right to work.

The introductory article of this special issue looks at the genesis, characteristics and challenges of social protection schemes in the Middle East and North Africa (MENA). It argues that social protection policies in the MENA should be seen as a key ingredient of the social contract that governments offered to their citizens after independence. To compensate for the lack of political participation and accountability, free public health and education systems, generous food, energy and water subsidies, social insurance and assistance schemes and mass public-sector employment were established. This was possible because MENA countries benefitted from substantial windfall profits (from the export of oil, gas and minerals; Suez Canal user fees), as well as from income from remittances from migrant workers and income from politically motivated aid. The decline of income from some of these sources and population growth has led MENA governments to focus more closely their social protection spending on strategically important social groups: typically, the urban upper middle class. As a result, social protection systems in MENA countries currently suffer from severe weaknesses in terms of social fairness, efficiency and sustainability. Although MENA countries still spend a very considerable share of gross domestic product on their social protection schemes, these have only very limited effects on the reduction of poverty, vulnerability and inequality – and some even exhibit perverse “bottom-up” redistributive outcomes. The articles that comprise this special issue selectively spotlight a number of opportunities and challenges for the development of sustainable social protection in the MENA countries.

Youth unemployment is a major socio-political issue in the Arab countries of the Middle East and North Africa (MENA). However, active labour market programmes (ALMPs) in support of youth employment remain less prevalent and are generally outside the purview of social policies in the region’s countries. This article addresses this inconsistency. The article provides an overview of such programmes and identifies the challenges to their inclusion as a central part of the region’s social policy mix. Internationally, the article notes that successful models for the integration of ALMPs into social policies have been part of long-term reforms targeting inclusive social security systems. This has not been the case in Arab countries where access to contributory social security systems is limited and where labour markets are characterized by large informal economies and a majority of workers are without social protection. Further contributing factors pertain to limited state budgets and a limited knowledge base about the effectiveness of ALMPs in the region.

To enable mutual health funds to extend coverage to poor people, the Mutual Health Support Network (Réseau d’appui aux mutuelles de santé – RAMS) in 2012 launched an initiative in collaboration with the Ministry of Social Action and Solidarity (ministère de l’Action sociale et de la Solidarité nationale – MASSN) in Burkina Faso. This article reveals difficulties in the initiative's implementation, which resulted in the continued exclusion of poor people from health services. Poor people were required not only to make co‐payments, but also to accept a limitation of coverage to three episodes of illness per year. Additional challenges to service takeup were the geographical distance of the homes of some beneficiaries covered by a mutual fund agreement from a health centre and the failure by some health workers and managers of pharmacies to recognize the mutual membership card. A formal framework was lacking that brought together all the actors involved in planning and implementing the initiative. Those involved did not all have the same information. Each structure performed the tasks within its scope, according to its own interests, but without consulting the other parties, and there was no platform for discussing implementation difficulties.

The main objective of this article is to determine, based on internal data, replacement rates for a defined benefit pension system, with two aims: the adequacy of pensions – measured in terms of the expenditure of retirees – and the sustainability of the system. For this purpose two instruments are used: the internal rate of return, and techniques based on systems of notional accounts. These figures, derived from internal data, will serve, by comparison with the replacement rate of the system, to assess whether the system tends more towards adequacy or sustainability. The system studied is that of Spain.

Following the recent update of the international System of National Accounts (2008 SNA), internationally comparable estimates of accrued‐to‐date pension liabilities (ADL) of unfunded social security pension schemes will soon be available in the supplementary table to the National Accounts. Against this background, this article analyzes the medium‐term sustainability of the Swiss old‐age pension scheme (Alters‐ und Hinterlassenenversicherung – AHV). This is achieved by estimating a “Swedish” actuarial balance sheet, which compares pension liabilities with the explicit and implicit assets of the pension scheme. Our results show that the current financing of the AHV is unsustainable, with about 30 per cent of the liabilities not backed by corresponding assets. In order to close this financing gap either the contribution rate should rise from 8.4 per cent to 12 per cent or all pension liabilities should be cut by about 38 per cent.