The ISSA defines governance as the manner in which the vested authority uses its powers to achieve the institution’s objectives, including its powers to design, implement and innovate the organization’s policies, rules, systems and processes, and to engage and involve its stakeholders.

Good governance implies that the exercise of the vested authority is accountable, transparent, predictable, participative and dynamic. In addition, good governance can be defined as “doing the right things and doing things right”.

Governance of contribution collection and compliance involves the definition of:

• Mandates and missions within the overall contribution collection and compliance system and of the involved institutions (“doing the right things”), which should be aligned with the institution’s social security mission and goals and updated according to the evolution of those goals;
• Organizational structure of the system (“doing things right”), which may involve multiple institutions in addition to the institution’s internal structure.

Governance of contribution collection and compliance may comprise three levels:

• The national level, which includes general laws and regulations concerning national contribution collection and compliance. This legislation defines which institutions will be involved in these functions, and their general responsibilities.
• Inter-institutional coordination, which includes agreements and procedures established among the institutions involved in contribution collection and compliance in accordance with the corresponding legislation. Such coordination may be formalized through an inter-institutional committee which governs the national system. The positions (points of view) of the participating institutions are defined by their respective authorities.
• The individual institution’s jurisdiction, which corresponds to the governance of each participant institution and involves their specific responsibilities within the national system. In addition to the national legislation, institutions should comply with and apply rules and procedures defined by the inter-institutional coordination bodies. Therefore, an institution’s governance will consist in its specific mission as well as in the internal regulations, procedures and organization that enable the institution to carry out its mandate.

In general, defining the mandate and mission of the social security contribution collection and compliance system aims at clarifying the scope of the system and its borders with external but related systems (e.g. national and local tax administrations) and their respective jurisdictions, competencies and missions. Given the variety of approaches to organizing social security contribution collection and compliance, especially concerning its relationship with other systems, these aspects should be clearly defined.

Within social security institutions, the board should define the mission, internal regulations and procedures for fulfilling the institution’s mandate within the national social security contribution collection and compliance system. It should also define the institution’s position in the inter-institutional governing committee.

The organizational structure of contribution collection and compliance systems defines the involved institutions, their roles and responsibilities, their internal structures, and how they interact to carry out the assigned missions.

Collecting social security contributions and performing compliance controls involves a number of activities. These correspond not only to different functions (e.g. registration of contributors, collection of declarations and contributions, calculation of contribution amounts, matching expected and paid contributions, fraud control) but also to administering different social security programmes (e.g. different pillars of pension schemes, health programmes, unemployment programmes).

Moreover, complying with contribution obligations conditions access to social security benefits. For this reason, information about contribution compliance should be communicated to the institutions that provide these benefits. In addition, as several of these functions are the same as, or very similar to, those involved in general tax administration, a number of countries perform them jointly, involving tax administration agencies in social security contribution collection. Financial institutions could also be involved in payment operations.

Where these activities rely on different institutions with specific responsibilities, national systems collecting social security contributions and performing compliance controls will involve several institutions.

The criteria for determining organizational structures are highly country specific, giving rise to very different configurations. However, experience has demonstrated certain principles that can promote quality and effectiveness, irrespective of organizational structure:

• All the institutions directly involved or highly dependent on social security contribution collection and compliance should be included in the organizational structure ruling the system;
• This structure should build upon existing operational capabilities in the institutions as well as in other national stakeholders;
• Although the institution which performs the functions may differ, the process should nonetheless be coordinated.

Guidelines in Part A, Governance, apply these principles in defining the mandate, mission and organizational structure for contribution collection and compliance systems.