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¿Qué protección social ofrecería un pilar de “cuentas nocionales” en Uruguay?

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Author Info

  • Alvaro Forteza

    ()
    (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

  • Ianina Rossi

    ()
    (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

Abstract

It is usually accepted that a pure NDC scheme is not adequate to protect individuals against the risk of poverty in old age, because it does not incorporate any redistribution of the system`s revenue. However, we show that insufficient coverage and weak social protection can be more seriuos issues in a DB that in an NDC scheme when individuals have short histories of contribution. Using work histories records from Uruguay, we compute the contribution and labor income patterns and simulate pension rights of the cohort born in 1995, assuming that these patterns remain unchanged. We characterize the distribution of pension rights and calculate the pension cost under both systems, ie under the current DB + CC and under a simulated NDC + CC system. We consider a pure NDC system and also one supplemented with minimum pensions and one supplemented with government contributions. We found that an NDC sheme would provide better social protection than a DB system, even without minimum pensions. That is, an improvement in the actuarial fairness would lead to an improvement in the welfare of low-income workers.

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File URL: http://www.fcs.edu.uy/archivos/0210.pdf
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Bibliographic Info

Paper provided by Department of Economics - dECON in its series Documentos de Trabajo (working papers) with number 0210.

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Length: 38 pages
Date of creation: Feb 2010
Date of revision:
Handle: RePEc:ude:wpaper:0210

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Keywords: Defined Benefit; Defined Contribution; Pensions; Pension Rights; Work History.;

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  1. Michele Boldrin & Sergi Jimenez-Martin & Franco Peracchi, 1999. "Social Security and Retirement in Spain," NBER Chapters, in: Social Security and Retirement around the World, pages 305-353 National Bureau of Economic Research, Inc.
  2. Sergi Jiménez-Mart�n & Alfonso R. Sánchez Mart�n, 2007. "An evaluation of the life cycle effects of minimum pensions on retirement behavior," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(5), pages 923-950.
  3. Alvaro Forteza & Ignacio Apella & Eduardo Fajnzylber & Carlos Grushka & Ianina Rossi & Graciela Sanroman, 2009. "Work Histories and Pension Entitlements in Argentina, Chile and Uruguay," Working Papers 32, Superintendencia de Pensiones, revised Sep 2009.
  4. Francisco Pino & Solange Berstein & Guillermo Larraín, 2006. "Chilean Pension Reform: Coverage Facts and Policy Alternatives," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
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