IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

The rationale and performance of personal pension plans in Chile

Listed author(s):
  • Vittas, Dimitri
  • Iglesias, Augusto
Registered author(s):

    Many developing countries, especially in Latin America and Eastern Europe, have unfunded pay-as-you-go public pension systems that face growing financial pressures. These emanate from a weak link between contributions and benefits, from widespread evasion, and from an aging population. Chile successfully reformed its public pension system in 1981 when it introduced a government mandated and regulated, but privately managed system. Based on individual capitalization accounts operated by specialized financial institutions, known as, Administradoras de Fondos de Pensiones (AFPs), the system has provided a considerable scope for competition and efficiency within a well-regulated environment. The authors analyze the rationale of the Chilean pension system and examine in detail the rules and provisions regarding coverage, contribution rates, pension benefits, and investment regulations. They also provide a detailed assessment of the structure and performance of the system, its impact on financial sector development, and the role of regulation and supervision. The Chilean experience shows that there is a positive dynamic interaction between pension funds and securities markets so long as a strong regulatory and supervisory mechanism is in place. It has also shown that it is feasible to finance the costs of transition from an unfunded to a funded system.

    If 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.

    File URL:
    Download Restriction: no

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 867.

    in new window

    Date of creation: 29 Feb 1992
    Handle: RePEc:wbk:wbrwps:867
    Contact details of provider: Postal:
    1818 H Street, N.W., Washington, DC 20433

    Phone: (202) 477-1234
    Web page:

    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    in new window

    1. Bodie, Zvi, 1990. "Pensions as Retirement Income Insurance," Journal of Economic Literature, American Economic Association, vol. 28(1), pages 28-49, March.
    2. Vittas, Dimitri & Skully, Michael, 1991. "Overview of contractual savings institutions," Policy Research Working Paper Series 605, The World Bank.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:867. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.