Financial Sector Dimensions of the Colombian Pension System
AbstractThis paper provides an assessment of the funded pension system and the quality of the regulatory framework for both accumulation and payout phase. It suggests that the lack of portfolio diversification may contribute in the future to low returns and poor pensions and provides a number of recommendations to expand the opportunities of investments to pension funds. The paper also finds that pension fund administrators are not exploiting the scale economies in certain areas of the business such as collection of revenues and account management, and propose mechanisms to reduce costs and increase efficiency through greater competition. The paper examines the products and options offered at the retirement age, and finds a bias toward the payment of pensions in the form of lump sums and suggests alternatives for improving the availability of other instruments. Enhancements in the regulatory framework of insurance companies are also proposed.
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Bibliographic InfoThis book is provided by The World Bank in its series World Bank Publications with number 6785 and published in 2007.
Pensions and Retirement Systems Macroeconomics and Economic Growth - Investment and Investment Climate Finance and Financial Sector Development - Debt Markets Private Sector Development - Emerging Markets Social Protections and Labor;
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- Robert Holzmann & Richard Hinz, 2005. "Old Age Income Support in the 21st century: An International Perspective on Pension Systems and Reform," World Bank Publications, The World Bank, number 7336, January.
- Walker, Eduardo, 2006. "Annuity markets in Chile : competition, regulation - and myopia ?," Policy Research Working Paper Series 3972, The World Bank.
- Impavido, Gregorio & Rocha, Roberto, 2006. "Competition and performance in the Hungarian second pillar," Policy Research Working Paper Series 3876, The World Bank.
- Solange Berstein & José Luis Ruiz V, 2005. "Sensibilidad de la Demanda con Consumidores Desinformados: El Caso de las AFP en Chile," Working Papers 4, Superintendencia de Pensiones, revised Apr 2005.
- Diego Jara & Carolina Gómez & Andrés Pardo, 2005. "Análisis de eficiencia de los portafolios pensionales obligatorios en Colombia," ENSAYOS SOBRE POLÍTICA ECONÓMICA, BANCO DE LA REPÚBLICA - ESPE.
- Solange Berstein & Alejandro Micco, 2002. "Turnover and Regulation: The Chilean Pension Fund Industry," Working Papers Central Bank of Chile 180, Central Bank of Chile.
- James, Estelle & Martinez, Guillermo & Iglesias, Augusto, 2006. "The payout stage in Chile: who annuitizes and why?," Journal of Pension Economics and Finance, Cambridge University Press, vol. 5(02), pages 121-154, July.
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