This brief reviews two rounds of pension reforms in ten Latin American countries to determine whether they are moving away from individual retirement accounts (IRAs). Although the idea is provocative, we conclude that the notion of “moving away from IRAs” is insufficient to characterize the new politics of pension reform. As opposed to the politics of enactment of IRAs of the late twentieth century, pension reform in Latin America in recent years has combined significant comeback of public components in old-age income support with improvement of IRAs. Clearly, the policy prescriptions that were most influential during the first round of reforms in Latin America have been re-evaluated. The World Bank and other organizations that promoted IRAs have recognized that pension reform should pay more attention to poverty reduction, coverage and equity, and to protect participants from market risks. The experience and challenges faced by countries that introduced IRAs, the changes in policies by international financing institutions, and the recent financial volatility and heavy losses experienced in financial markets may have tempered the enthusiasm of other countries from applying the same type of reforms. Scholars and policymakers around the globe could benefit from looking closely at these changes in pension policy.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
17422.
Find related papers by JEL classification: J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs G23 - Financial Economics - - Financial Institutions and Services - - - Pension Funds; Other Private Financial Institutions O54 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean H5 - Public Economics - - National Government Expenditures and Related Policies
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