CHAPTER 2

REVIEW OF RELATED LITERATURE AND STUDIES

The chapter two contains of specific review of literatures and studies that support the study
which enables to prove and strengthen the data gathered from conducted face to face
interview. It focuses on important aspects that give petrified foundation of the study; a.)
Educational Attainment b.) Age c.) Living Arrangement d.) Household Headship e.) Health-
Related Expenditure f.) Non-Health Expenditure g.) Social Penion h.) Mobility i.) Sensory
Capacity j.) Activities of Daily Living k.) Chronic Mobility. All news articles, abstracts
research, research articles and other reading materials are examined to be suitable and
could be able to testify the reliability of the research.

Foreign Literature

Pension Investment and Reserved Fund

This survey is focused on large pension funds (LPFs) and Public Pension Reserved Fund
(PPRFs) in assets allocation for different investments infrastructure of many countries. It
was found that different countries are of the dissimilar stages in the growth of pension fund
investment infrastructure .According to Organisation for Economic Co-operation and
Development or OECD (2013), pension funds have both describe as benefit and
contribution arrangements, the budget provides the country’s income. The G20 members
are responsible for assessing factors affecting long term finance that provided by
International Organisation. They are having the largest funds in their separate continents for
pension fund asset.

In largest public pension reserve funds, the largest fund is held by the US Social
Security Trust Fund followed by Japan’s Government Pension Investment Fund. Also
Canada, Korea and Sweden had reserved large collection while the Saudi Arabia while
maintained a well-established reserved fund. Guarantee and cash based in Italy, Spain and
Russia were almost by assets for funds and in Turkey’s OYAK and Portugal CGD
PENSOES considered an important distribution to offer an option investments that have a
highest distribution in real estate as well as Ban co BPI Pension Fund, followed by
Canada’s OMERS of assets in alternatives that invested the highest amount in private
equity with accompanied by Massachusetts PRIM Board and USS. And some funds
invested in infrastructure that was also one of the higher investments to pension funds.

There was a change in fixed income and cash, equity and alternative investments
were connected to shifts using funds in market values overtime and to active decisions. It
was proved that the distribution to alternative asset classes, such as infrastructure and
private equity were slowly increasing according on a group of 42 LPFs that reported asset
distribution data for both 2010 and 2012responded by 17 LPFs. Other funds in Portugal,
Italy and Spain increased complex income distribution and decreased equities.

The Public Reserve Funds (PPRFs) manages the a trillion assets and more than one
third of assets in worldwide which are being held by institutional investors. The US Social
Security Trust Fund held the biggest reserve followed by Japan’s Government Pension
Investment Fund. Also, Canada, Korea and Sweden gathered large reserves. Both 2010
and 2012 survey periods had been a slow but steady increase in total asset in the OECD
countries surveyed. In the case of 2010, Poland’s Demographic Reserve Fund increased
the most among the OECD countries compared to the previous year. Apparently, in the year
2012, the Argentina, Chile, China and Portugal experienced high increase in PPRFs. As of
large reserves are gathered in governing wealth funds that have a pension focuses. And the
Russia’s National Wealth Fund is allocated in supporting pension system a guarantee a
strong long-term function of the system. (Reference)

Social Security Savings and Retirement Pension

Saving money in account for the assurance of having a health insurance or even
social pension is a good plan for the elders. Many senior citizens have saved money after
retirement from their work in order to sustain their needs particularly in health. In the United
States, the retirement experts tackle about pension, personal savings, and social savings
wherein the elderly enable to make a better decision for good retirement. Most of them have
not stopped from professional work for continuing the savings for health insurance. In
applying social security, the senior citizens should qualify the needed requirements as a
benefactor of such savings. After the retirement, the said cash could be used at the age of
62 for health needs. Aside from that, there is an exception for married people; the wife
might use her social security at the age of 62 if she retires but when the husband retires,
she will be switched to the spousal benefit. Moreover, if the death has come between the
couple, the spousal that is still alive will also have a larger benefit (Quinn, 2011).

The extension of Social Security covers the wage earners and self-employed
persons and, the retirement age is lowered to 62.Furthermore, the national disability income
program has officially been included to Social Security in which the elderly with disability will
be much having attention from the government. On the other hand, the Taft-Hartley Act is
interpreted legally which states that private pension plans will be part of collective
bargaining as legitimate items. From 1950 to present, the result of the interpretation of the
said act for the private pension plans has been successfully grown in which the
implemented activities have a good effect in emerging the retirement norms in America. The
new Social Security legislation has been established in 1993 and used as a passage way of
the congress and presidency to have a right to question the desirability of moving out the
seniors from labor force. In solving the dilemma of financial assistance to continuing the
implementation of various programs as well as making an innovation and expansion of
them, the congress and the president has made a decision to increase tax of Social
Security, to increase income tax of senior workers, to tax the Social Security benefits and,
to raise the ordered age of social security benefits after the year 2000. Moreover, the
required age for early retirement is 62 to 64 years of age while in full retirement is 65 to
67.For those early retired seniors, the reduction of their pension benefits will be starting
from 20% to 30% of their full retirement income. However, for the senior citizens who are
still working in their chosen industry, they will be having 8% pension boost each year of
working (Cox et. al, 2011).

In comparing the health status of elderly whose age is 55-64 between the United
States and England, British researchers found in their study that American elderly were less
healthy than English counterparts. According to their survey, the senior citizens in America
have been suffering from the certain diseases such cancer, diabetes, heart disease, high
blood pressure, lung disease, and stroke. Hence, the Social Security and Medicare for
million American elders has become relevant and served as strong guarantee in order to
maintain the health condition. Additionally, being enrolled as a member of Medicare give
health advantages because such benefit have so much care for assisting the needs of the
senior citizens in cataract surgery, hip replacement, and medical management of heart
conditions (Byers, 2011). It is also an additional healthcare system which produces another
beneficial medical activities and programs for the better health status of the elderly (Connor,
2011). Older workers whose working harder to continue their personal savings and social
pension, in the point of view of psychologist, the recognition for being productive because of
much experiences have been valid reason to allow them to work as their age increases.
Accordingly, senior citizens with occupation are financially shared a 10% savings for
compensation and health insurance as stated by Urban Institute (Grossman, 2011).

Dignified Retirement

The Medicare financing outlook is even bleaker; the federal health-insurance

program for the elderly is already in the red even as a costly new prescription drug benefit is
being implemented. Front page stories about corporate pension plans that go belly up or
are cut back, at the same time that retiree health-benefit programs are curtailed, add to the
general anxiety. But perhaps the biggest concern Americans should have about their
retirement system is the sheer inertia that has prevented the nation from addressing its
problems. For more than two decades, we have known about the demographic challenges
facing Social Security. We knew before prescription drug benefits were added to Medicare
coverage that the system was in trouble. It makes for a sad spectacle indeed that we enjoy
the rare advantage of being able to see the future with clarity yet are willing to act.
Meanwhile, other countries have started to address some of the same challenges, and they
have done so with greater inventiveness and determination than the United States has
shown. The list of pioneers ranges from the familiar example of Chile to the less noted
examples of Sweden, Germany, and Canada. All offer lessons from which America can
learn. By some measures, America’s aging problem is relatively minor compared with what
other developed countries face. For every retired person in America, there are currently
about four working people (Australia, Canada, and the United Kingdom have similar ratios).
In Japan, the ratio is closer to three workers per retired person; in Italy, it’s down close to
two, and Germany is not much better off than that. The demographic future also looks at
least as favorable for the United States as for any other developed country. The retirement
burden on American workers is not expected to be any greater in 2030 than it already is
today in Germany or Italy. By that year, Germany’s burden is expected to be twice and
Italy’s 2.5 times America’s. Italy will have only one active worker per retiree. Other
developed countries, such as Switzerland and the Netherlands, will be in better positions
than that but will still face bigger burdens than the United States. Pension payouts are not
the only cost of retirement. By withdrawing their labor from the economy, retirees also slow
economic growth, making it harder to underwrite retirement costs. If a country has a
growing elderly population that does not contribute to national output and workers have an
incentive to retire in their fifties, the particular method of financing retirement-pay-as-you-go,
like social security, or fully funded retirement accounts-doesn’t matter a great deal. There
will in any case, be trouble down the road. In Canada, for example, legislators were able
several years ago to impose a means test on the basic pension through the income tax
system, reducing benefits for higher-income Australia, too, has cut back its basic benefit,
through with a twist. All Australians are still entitled to a relatively generous basic benefit,
set at roughly 25 percent of the average worker’s earnings, but it is subject to a means test
that reduces recipients’ benefits as their earnings and assets increase. As a result, Australia
in the early 1990’s implemented a mandatory retirement savings program designed literally
to force workers to save so much that many would fail the asset and income tests
(Schieber,2011).

Efficient and Effective Special Attention of Albania, Asia and the Pacific for the indigent
senior citizens

The elderly, in recent years, have decided to be included in special programs that have a
concern for their health in which the improvement have seen in their body. In social assistance,
there are programs have been established to eradicate extreme poverty of poor older
people.There are implemented rules for noncontributory schemes and social pensions that
could possibly offer to the elderly to make a decision to transfer another shelter and change the
system of support networks. Actually, at some point, the given income for the elders to support
their basic services and healthcare needs seem not effective to them due to scarcity. Hence, the
government has made different policies to tax the public-finance in order to continue the supply
of social pensions especially for older people who are in needs (Barrientos, 2012).

Meanwhile, it has been become functional and emerging progressively in Asia and the
Pacific wherein the condition of the older persons in terms of health and socio-economic is the
enormous focus. Improvise the health and lifestyle of the elderly become a challenge especially
in the third world countries, however, the government has raised such call to give more
attentions to resolve the said dilemma and, establishing social assistance to maintain social-
protection for them (Babajanian and Handayani, 2012).

Under the decision of the Government, there are about 5,000 poorest senior citizens
who reached more than the age of 70 and recognized as permanent residents for five years
in Albania has been enlisted to be benefitted a social pension this year of 2015.These
beneficiaries became workers. Some of them had been in abroad while the others were
become self-employed in agriculture but did not fulfil the contributions for social security
savings. Regarding with the early retirement, the monthly payment amount of social pension
will be equal to the partial old age security pension of December 2015. In the year of 2040,
the number of beneficiaries is expected to increase to 30,000 and about 125,000 in
2080.The said decision is based on the rising prices of energy and the approximate amount
of pension in the year of 2009-2010.In January 1 st, 2015, the social pension becomes 6,750
lek (50 euro) per month, which will be indexed to offset the effects of changing price index
of goods and services (Erebara, 2015).

The socio-economic impact of pension systems of women and men

Inequalities between women and men violate fundamental rights. They also impose
a heavy toll on the economy and result in underutilization of talent. On the other hand,
economic and business benefits can be gained from enhancing gender equality.”

Among the consequences of this unequal distribution of income is the worse level of
poverty women face in their adult and aged life. In particular, elderly women continue to
experience higher poverty risks than their male counterparts. In 2009 while men at risk of
poverty aged 65 accounted for 15.5% of the population, the corresponding figure for women
came to 16.4%, with a considerable increase in the gap among the elderly: while 16.9% of
males aged 75 were at risk of poverty, the figure rose to 22.4% for women.

The 2008 financial and economic crisis has highlighted and aggravated these risks;
moreover, in recent year’s pension reforms have focused largely on sustainability and much
less on guaranteeing adequate living conditions and on potential impacts on gender and
generational equality. According to many European and national studies, the recent trends
in pension reforms, and especially the closer link between benefits and lifetime contributions
and the shift to diversified multi-pillar schemes, have slowed down the narrowing of gender
gaps in pensions; contribution-related pension schemes mirror not only income but also
gender differences in employment patterns. Considering the wide gender pay gap and the
higher incidence of part-time, temporary and irregular employment among women relative
to men, it is evident that these schemes reduce gender equality in pension benefits.
(Reference)

LOCAL LITERATURE

Poor household Filipinos

Many Filipino citizens have poor living. The social protection programs and other
benefits given by the government will help to decreased and avoid the number of poor
people in the Philippines. The Department of social Welfare and Development (DSWD) had
made a profile for finding of poor Filipinos. National Household Targeting System for
Poverty Reduction or NHTS-PR IS an information management system that identifies who
and where the poor are (DSWD, 2012). This was conducted in Executive order No. 867
issued in March 2010 conducted a National Government Agencies (NGAs) to take up the
results of NHTS-PR to know who were deserving beneficiaries for the Social Protection
Program nationwide.

The NHTS-PR was able to asses and subject to Proxy Means Test (PMT), a
statistical model that measured household income using proxy variables or income
predictors. This was used from households in the 17 regions, 80 provinces and 137 cities
and municipalities nationwide. It was 5, 255, and 118 household were identified as poor
according to DSWD (2012). They used supported activities namely On-Demand application
and validation to enhance the morality of the database informed after four years.

The Autonomous Region of Muslim Mindanao (ARMM) charged the largest share
with the total of 531, 526 identified poor households, followed by the Region V, Region IV-A,
Region VI and Region IX of poor households. Most of the poor households were found in
rural areas and some of them were in urban areas. There were half of the poor household
nationwide have roof that were made of light materials such as cogon, nipa and bamboo. In
tenurial status, almost half of the poor household nationwide have their own house but rent-
free lot with consent of owner that mostly found in Western Visayas, Bicol Region and
Zamboanga Peninsula. Apparently, there were number of poor households with no safe
water source joined with insanity toilet practices, and had no access to electricity. Also,
National Capital Region (NCR) were found that many poor households with six members of
the family, and one of them are the senior citizens. Mostly, there were about 1, 010, 551
senior citizens in poor households nationwide were found in the areas of CARAGA, Region
I, Region VII, Region IX and Cordillera Administrative Region (CAR) who needs to support
them.(Reference)

Social Pension Region VI

As discussed earlier about poor households nationwide that one of the senior
citizens for almost thousands of poor households were identified. This study shows many
beneficiaries who were senior citizens member in Social Pension Program from the Region.
November 12-16, 2012, the PREW was conducted at Subic Bay, Pampanga; Central Office
declared the additional beneficiaries and they provided monthly payment of five hundred
pesos from July to December 2012. The LGUs were immediately informed by giving the
names of beneficiaries for funding. The total social pension beneficiaries for the Regions
became 18, 505. From this report, a total of 15, 743 in the year 2012, the central office
(2012) declared that the additional beneficiaries 2,762 were downloaded for 2013 which
funded as of July to December 2012. Iloilo became the highest number of beneficiaries,
followed by Negros Occidental, Antique, Aklan, Capiz and the lowest was Guimaras for that
year.

The LGUs had taken checks allotted for additional beneficiaries of social pension but
not all checks were taken by city and Municipal treasurers due to busy schedule of LGU’s
Municipal treasures and the calamity brought by tropical storm.(Reference)

Indigent Senior Citizens Receive Social Pension

The active existence of social pension program in the region VI is also implementing
successfully in some area of Mindanao. The DSWD (Department of Social Worker and
Development) improvising a social pension for indigent citizens in Northern Mindanao more
specifically at Cagayan De Oro wherein the 104 elderly have started to receive a social pension.
The said organization screened the 19,417 social pensioners but the result was only 4,068
elderly are being enlisted to Listahan database. The Listahan was also known as the National
Household Targeting System for Poverty Reduction which serves as management system that
the government uses in determining who and where the poor are and, also uses as a basis for
the qualification of the senior citizens to such program. The identification of the social
pensioners is enlisted to the Listahan database and to be submitted to the Local Social Welfare
Officers and the Federation of Senior Citizens in the various localities. The Republic Act 9994
states the provision of social pensions to the indigent senior citizens (Imam, 2014).

Importance of Social Pension for the Reduction of Poverty and Human Protection

The Asia Development Bank reveals the importance of having exploration and
application of the social pensions in different countries in the Asia. Nowadays, as population
grows in Asia, the senior citizens who are in need have been emphasized in such implemented
program wherein the social pension should improvise its different programs in order to help the
elderly and to assure their safety. The S. Chander, Director General of ADB's Regional and
Sustainable Development Department says that in Manila, Philippines, the social pension is a
great factor to improve the social standing of the indigent citizens as well as their basic needs
and health care. Women and widows are the first prioritize of such program in which they often
receive not enough savings from social security and sometimes experience discrimination from
employment, and properties. From the case studies conducted in Bangladesh, Nepal, Thailand
and Vietnam, the social pension program with low benefits to many beneficiaries is more
beneficial than high benefits to few beneficiaries. The growing population of aging people is a
facing dilemma since the caring for the elderly could be expensive to the budget of the
government and, the economic growth and productivity of the country is depending on the labor
force of the young adult workers. In Asia, only minor countries have been granted pension
benefits. The People’s Republic of China, Philippines, and Sri Lanka prioritize the one-quarter of
the workforce as pension beneficiaries while less than one in 10 are covered by contributory
pensions in Bangladesh, India, Indonesia and Viet Nam (Asian Development Bank, 2015).

FOREIGN STUDIES

The World Health Organization distinguish the deep meaning of the term “health”,
based on the approach of community medical service, is the state of complete physical,
mental and social well-being and not merely the absence of disease or infirmity. The patient
perspectives are the major concern in prioritizing the physical health and well-being as
having an important emphasis in functional and active monitoring health care results which
also giving additional attention in creating the plan, conducting delivery and evaluation of
social, health and medical services, in addition, aiming for the improvement of the health
and well-being becomes the big spot in service delivery.

LOCAL STUDIES

Ordinance and Resolutions for the Office for the Senior Citizen Affairs

The Ordinance No. SP 1161 S-2002 contains of budgeting the office for the senior
citizen affairs to establish different programs and projects for the elderly in the City of
Quezon. In section 11, article XII of the new constitution, an approachable and rightful
health development programs and social services will be implemented and prioritizing the
underprivileged, elderly, sick, disabled, women and, children at affordable cost. In addition,
by the virtue of the said act, the Office for the Senior Citizen Affairs (OSCA) has created
various tasks to serve the elderly and their families in the community (QC, Council, 34th
regular session,2002).

The Resolution No. SP-6147 was supported by House Bill No. 2958 which contains
of giving a social pension amounting of one thousand pesos (P1, 000) to the poor and
indigent senior citizens monthly. In section 11, article XIII, of the 1987 Philippine
Constitution, the said policy states about the living condition of the senior citizens in which
the priority is to provide the basic needs of them for the security of their health and safety.
The approximately 1.3 million poor senior citizens has been granted a special pension
through the implemented rules, regulation, policies, and guidelines of the assigned agencies
such as Department of Social Welfare and Development (DSWD),Office of the Senior
Citizen Affairs (OSCA) and, Senior Citizens Organizations(QC Council 41 st regular session,
2014).

The Resolution No. SP 4783 S-2009 contains of organizing, consolidating, unifying the
different existing associations of senior citizens into one body in the city of Quezon which will be
in-charged in representing their communities to take over every program and project to help the
elderly and the family of them. In accordance to Republic Act No. 9257, the city government
determines the associations of the senior citizens in order not to deprive the financial assistance
and other fringe benefits of the elderly. The function of the recognized associations is to
harmonize the social services and welfare programs and be an officially representative for each
barangay to the city council in order to discuss the necessary support and assistance of the
elderly. In addition, the official records of the office of the Senior Citizen Affairs (OSCA) in
Quezon City shows that there are more or less 333,508 registered senior citizens (QC Council,
2009).

Synthesis of Reviewed Related Literature and Studies

REFERENCES:

DSWD. (2012). Social Pension Region VI. Republic of the Philippines: Field Office VI.

OECD. ( 2013). ANNUAL SURVEY OF LARGE PENSION FUNDS AND PUBLIC PENSION
RESERVE FUNDS (Report on pension funds’ long-term investments). France: OECD
Publishing, rights@oecd.org.

Articles

Byers,T. (2006). Lifetime Achievements. Aging 10/11 Twenty-Third Edition, New York:
McGraw-Hill, 28-30.

Connor, S. R. (2007-2008). Development of Hospice and Palliative Care in the United States.
Aging 10/11 Twenty-Third Edition , New York: McGraw-Hill. 94-98.
Cox, H. (2001). Work/Retirement Choices and Lifestyles Patterns of Older Americans. Aging
10/11 Twenty-Third Edition, New York: McGraw-Hill,83-91.

Grossman, R.J.(2008). Keep Pace with Older Workers.Aging 10/11 Twenty-Third Edition,New
York: McGraw-Hill,74-80.

Schieber, S.J. (2006).Dignified Retirement. Aging 10/11 Twenty-Third Edition, New York:
McGraw-Hill,140-143

Quinn, J. B. (2007). Money for Life. Aging 10/11 Twenty-Third Edition, New York: McGraw-Hill.
72-73.

Websites

Erebara, G.(2015, Januray 5). Albania Launches New Pensions for Poorest. BIRN Tirana.
http://www.balkaninsight.com/en/article/albania-introduces-new-social-pension-scheme

Imam, C. O. (2014, July 27). Indigent Senior Citizens Receive Social Pension. Manila Bulletin.
http://www.mb.com.ph/indigent-senior-citizens-receive-social-pension/

Bank, A. D. (2012, July 20). Social Pensions Key to Protecting Elderly, Reducing Poverty. Asian
Development Bank. http://www.adb.org/news/social-pensions-key-protecting-elderly-reducing-
poverty

Manuela Samek Lodovici, Chiara Crepaldi, Marcella Corsi in collaboration with Sandra Naaf. (2011). “The
socio-economic impact of pension systems on the respective situations of women and men and the
effects of recent trends in pension reforms”. non-EU countries: Internet: http://www.irs-online.it /
Internet: http://www.fondazionebrodolini.it/.

OECD. ( 2013). ANNUAL SURVEY OF LARGE PENSION FUNDS AND PUBLIC PENSION RESERVE FUNDS
(Report on pension funds’ long-term investments). France: OECD Publishing, rights@oecd.org.

Research

QC Council, 34th Regular Session (2002). Ordinance No. SP.1161,S-2002. Appropriating the
amount of one million five hundred thousand pesos (Php 1,500,000.00) which shall be included
in the supplemental budget of Quezon City for the year 2002, to finance the projects and
programs of the office for Senior Citizens Affairs. Sandiganbayan, Quezon City.