Enoff and Mckinnon (2011) has emphasized that improved and reliable social security contribution collection and compliance are key factors in ensuring the financial sustainability of social security schemes which, in turn, have a direct impact on the effective administration and reliable delivery of adequate benefits. These outcomes support the political legitimacy of social security as a societal institution and enhance further extension of social protection to those with no or inadequate protection. As the ILO has stressed that ‘public confidence in social security systems is a key factor for their success’ and made possible through good governance is essential’ (ILO, 2001). This leads us to our sixth reason. For the administrators of all …show more content…
This owes to the many differences in the design of social security programmes, in the percentage of the national population covered by a given social security system and in the collection methods used (Enoff and Mckinnon, 2011). According to the World Bank (2012), contribution collection in centralized pension system is more complicated based on individual accounts than in a public system. World Bank (2012) indicated that a number of European countries have moved towards unified systems. For instance, Sweden share this trend of centralization, Despite the trend towards centralization found in most of these nations, much of the literature acknowledges also that the processes used for the collection of contributions, in practice, remain as varied as the programme design of the various social security schemes existent throughout the world: between conventional centralized and decentralized systems of contribution collection ‘there is a spectrum of options’ (Rofman and Demarco, …show more content…
Although centralizing contribution collection seems to provide some economy of scale and holds important potential to better coordinate and audit record-keeping activities, the likelihood of achieving sought-after improvements in organizational performance will be increased by taking into account also this broader range of factors. Another key policy decision is whether contributions should be collected by a clearing house or it should be decentralized to individual employers. If it is centralized, then consideration has to be given as to whether contribution collection should be unified with other levies on