A review of the pension systems in Latin America
Latin America is one of the pioneers in introducing individual capitalization schemes as part of their compulsory component of their pension systems. Thirty years have passed since Chile took the !irst step. Now what reforms have been achieved today? What challenges lie ahead? This paper reviews the motivations of the reforms and their progress, using the experience of Colombia, Chile, Mexico and Peru. The main results are presented in terms of coverage, replacement rates, and !iscal sustainability, with projections to 2050. The results show that while the reforms of both the public and private pension systems have been key to providing !iscal sustainability and have strengthened retirement savings for groups with greater permanence in the labour market, there are still many pending challenges in order to address the signi!icant percentage of people who are self-employed, within the informal sector or frequently unemployed. In that sense, for each of the countries studied, recommendations have been explored that could help reduce the level of vulnerability at the retirement stage, incentivize savings, focus resources on the truly poor, and maintain !iscal balance.
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- Edward R. Whitehouse, 2009. "Pensions, Purchasing-Power Risk, Inflation and Indexation," OECD Social, Employment and Migration Working Papers 77, OECD Publishing.
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