Annuity markets and benefit design in multi-pillar pension schemes : experience and lessons from four Latin American countries
AbstractA growing number of countries have introduced mandatory defined contribution schemes. As these schemes mature, their success will increasingly depend on how well they translate accumulated funds into a stream of retirement income. Successful reforms will rely on a well regulated, and competitive insurance sector. They will strike a balance between individual preferences, and public policy objectives, such as providing a reasonable amount of longevity insurance. This paper describes the benefit stage in four Latin American countries, and presents preliminary evidence on their emerging annuities markets. We find that these markets are less transparent than they should be, and that supervision is less strict than during the accumulation period. Annuities markets will grow dramatically in the coming decades as the reforms mature. Growth depends on policy variables, such as the use of recognition bonds, as well as initial conditions. The markets in Peru and Colombia, will be much smaller than those in Chile and Argentina, in both absolute, and relative terms. The immaturity of the schemes, and temporarily limited flow of new pensioners, should be viewed as a window of opportunity for improving supervision, increasing transparency, and educating workers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Social Protection Discussion Papers with number 23159.
Date of creation: 31 Mar 2001
Date of revision:
Insurance&Risk Mitigation; Pensions&Retirement Systems; Non Bank Financial Institutions; Environmental Economics&Policies; Banks&BankingReform;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Rofman, Rafael, 2000. "The pension system in Argentina - six years after the reform," Social Protection Discussion Papers 23089, The World Bank.
- Ben Braham, Mehdi, 2004. "L’avenir des retraites en Tunisie : Leçons des expériences étrangères," Economics Papers from University Paris Dauphine 123456789/6253, Paris Dauphine University.
- Impavido, Gregorio & Thorburn, Craig & Wadsworth, Mike, 2004. "A conceptual framework for retirement products : Risk sharing arrangements between providers and retirees," Policy Research Working Paper Series 3208, The World Bank.
- Acuna R., Rodrigo & Iglesias P., Augusto, 2001. "Chile's pension reform after twenty years," Social Protection Discussion Papers 24079, The World Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Raiden C. Dillard).
If references are entirely missing, you can add them using this form.