Download or read book Assessing Chile s Pension System Challenges and Reform Options written by Samuel Pienknagura and published by International Monetary Fund. This book was released on 2021-09-10 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: Chile’s pension system came under close scrutiny in recent years. This paper takes stock of the adequacy of the system and highlights its challenges. Chile’s defined contribution system was quite influential when introduced, and was taken as an example by other countries. However, it is now delivering low replacement rates relative to OECD peers, as its parameters did not adapt over time to changing demographics and global returns, while informality persists in the labor market. In the absence of reforms, the system’s inability to deliver adequate outcomes for a large share of participants will continue to magnify, as demographic trends and low global interest rates will continue to reduce replacement rates. In addition, recent legislation allowing for pension savings withdrawals to counter the effects from the COVID-19 pandemic, is projected to further reduce replacement rates and increase fiscal costs. A substantial improvement in replacement rates is feasible, via a reform that raises contribution rates and the retirement age, coupled with policies that increases workers’ contribution density.

Download or read book Pension Reform Options in Chile written by Marika Santoro and published by International Monetary Fund. This book was released on 2017-03-13 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we study the macroeconomic impact of pension reform options in Chile, using a dynamic general equilibrium model. The main reform proposal considers raising contributions (employer side) and vehicle additional proceeds to individual accounts and to increase the support of solidarity pensions. We model increased contributions as a labor tax. We find the impact of this reform on GDP to be negative in the near to the medium run, with GDP declining by 0.5 percent by 2021, as a result of labor tax distortions which lead to a fall in labor supply, investment and to a loss in competitiveness. We also illustrate the main macroeconomics tradeoffs by analyzing alternative reforms, such as using revenues only to improve future pensions or a reform package funded by a mix of higher contributions and indirect taxes.

Download or read book Informality and the Challenge of Pension Adequacy Outlook and Reform Options for Peru written by Christoph Freudenberg and published by International Monetary Fund. This book was released on 2019-07-11 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: Past reforms have put the Peruvian pension system on a largely fiscally sustainable path, but the system faces important challenges in providing adequate pension levels for a large share of the population. Using administrative microdata at the affiliate level, we project replacement rates in the defined benefit (DB) and defined contribution (DC) pillars over the next 30 years and simulate the impact of various reform scenarios on the average level and distribution of pensions. In the DB pillar, the regressive minimum contribution period should be re-thought, while in the DC pillar a broadening of the contribution base and/or an increase in contribution rates would help increase replacement rates relative to the baseline forecast of 25-33 percent. A higher net real rate of return than assumed in the baseline would also have a significant positive impact. In the medium-term, labor market reform to tackle informality, and a broad pension reform to restructure the system and avoid competition between the DB and DC pillars should be a priority. Given low pension coverage, having a strong non-contributory pillar will remain important for the foreseeable future.

Download or read book The Political Economy of Pension Reform written by Evelyne Huber and published by Conran Octopus. This book was released on 2000 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since pension schemes-along with health care and education-absorb the largest amount of social expenditure in all countries, their reform has a potentially major impact both on the fiscal situation of the state and on the life chances of citizens who stand to win or lose from new arrangements. This makes pension reform a highly controversial issue; and, except for the addition of new programmes and benefits, major restructuring of existing pension systems has been extremely rare in advanced industrial democracies. It was also rare in Latin America before the 1980s and 1990s. But there has been a great deal of experimentation within the region during the past decade. This paper examines the larger economic, social and political context of Latin American pension reform and compares experiences in different countries of the region with options available in Western European societies during the same period. The authors argue that the type of pension reform undertaken in Latin America has been an integral part of the structural adjustment programmes pursued by Latin American governments, under the guidance of international financial institutions (IFIs). Although there was a range of possible remedies to the problems of pension systems in different Latin American countries, neo-liberal reformers and the international financial institutions preferred privatization over all others. They claimed that privatization would be superior to other kinds of reform in ensuring the financial viability of pension systems, making them more efficient, establishing a closer link between contributions and benefits and promoting the development of capital markets-thus increasing savings and investment. And they were able to push through some of their suggestions for reform in spite of considerable opposition from pensioners, trade unions and opposition political parties. Interestingly enough, their pressure proved least effective in the more democratic countries of the region. In Costa Rica, for example, citizens preferred to reform the public system-eliminating the last pockets of privilege for public sector workers and ensuring that new levels of contribution would be adequate to provide minimum benefits for the aged and infirm. In Uruguay, citizens forced a public referendum, through which they rejected a proposal for privatization. At a later stage, they did permit the introduction of private investment accounts, but not at the cost of eliminating the public programme. In Argentina and Peru, after the legislature refused to authorize partial privatization, this was eventually pushed through by presidential decree. Only in Chile and Mexico has there been a complete shift to private pension funds-but, in both cases, influential sectors of the elite, including the military, have been allowed to keep their previous, publicly managed group funds. Looking at the only privatized pension system in existence long enough to allow for some assessment of its consequences-that of Chile-the authors find that many of the claims made by supporters of privatization are not substantiated by the evidence. The first discrepancy between neo-liberal predictions and the reality of Chilean pension reform has to do with efficiency. All previous claims to the contrary, private individual accounts have proven more expensive to manage than collective claims. In fact, according to the Inter-American Development Bank, by the mid-1990s administration of the Chilean system was the most expensive in Latin America. The second disproved claim involves yield. When administrative costs are discounted, privately held and administered pension funds in Chile show an average annual real return of 5.1 per cent between 1982 and 1998. Furthermore high fees and commissions-charged at a flat rate on all accounts-have proven highly regressive. When levied against a relatively modest retirement account, for example, these standard fees reduced the amount available to the account holder by approximately 18 per cent. When applied to the deposit of an individual investing 10 times more, the reduction was slightly less than 1 per cent. The third discrepancy involves competition. Although it was assumed that efficiency within the private pension fund industry would be associated with renewed competitiveness-while the public pension system represented monopoly-the private sector has in fact become highly concentrated. The three largest pension fund administrators in Chile handle 70 per cent of the insured. And to reduce advertising costs, public regulators are limiting the number of transfers among companies that any individual can make. A fourth unfulfilled promise of privatization in Chile has to do with expansion of coverage. It was assumed that the existence of private accounts would increase incentives for people to take part in the pension sc heme, but in fact this has not happened. Coverage and compliance rates have remained virtually constant. A fifth major claim was that the conversion of the public pension system into privately held and administered accounts would strengthen capital markets, savings and investment. But a number of studies have recently concluded that, at best, this effect has been marginal. And finally, the dimension of gender equity within a fully privatized pension scheme is being subjected to increasing scrutiny. Women typically earn less money and work fewer years than men. Therefore, since pension benefits in private systems are strictly determined by the overall amount of money contributed to them, women are likely to receive considerably lower benefits. Public pension systems, in contrast, have the possibility of introducing credits for childcare that reduce this disadvantage. Sweden is an example of countries that have embarked on this course. In the latter part of the paper, Huber and Stephens widen their comparative framework to include recent pension reforms in advanced industrial countries. There, where economic crisis was not as severe and where pressure from international financial institutions was not significant, much broader options for reform were available. In fact, although long-established systems were under stress, no developed country opted for complete privatization. Complex measures were taken to strengthen the funding base of national pension systems, including changes in investment procedures and changes in rules for calculating pension benefits. Reforms also increased retirement age, as well as the number of years required to qualify for a full pension. But even the most thoroughgoing reforms retained a central role for public schemes in ensuring old-age benefits. In conclusion, the authors consider steps that can be taken to craft pension reforms with more desirable results than those obtained to date in Latin America. They recommend measures that address the problem of an aging population by increasing the ability of each generation to pay for its own pensions-rather than relying primarily on the contributions of preceding generations of insured workers. Pension payments should be invested in a variety of financial instruments and benefits must ultimately be related to the yields obtained. Such a strategy does not require introduction of privately managed, individually held, investment funds. On the contrary, risk is lessened by relying instead on collectively managed funds, in which accounts can either be identified with individuals or-more equitably-with generations of contributors. Reformed public pension systems should also contain minimum "citizenship pensions" that guarantee subsistence income in old age to all individuals as a matter of right. Such a measure, financed from general tax revenue rather than from personal contributions, is not beyond the means of medium income countries in Latin America and the Caribbean. In fact, some Nordic countries introduced citizenship pensions when their GNP per capita was lower than that of most Latin American countries today.

Download or read book The Challenge of Public Pension Reform in Advanced and Emerging Economies written by Mr.Benedict J. Clements and published by International Monetary Fund. This book was released on 2013-01-25 with total page 86 pages. Available in PDF, EPUB and Kindle. Book excerpt: Pension reform is high on the policy agenda of many advanced and emerging market economies. In advanced economies the challenge is generally to contain future increases in public pension spending as the population ages. In emerging market economies, the challenges are often different. Where pension coverage is extensive, the issues are similar to those in advanced economies. Where pension coverage is low, the key challenge will be to expand coverage in a fiscally sustainable manner. This volume examines the outlook for public pension spending over the coming decades and the options for reform in 52 advanced and emerging market economies.

Download or read book Pension Reform and the Development of Pension Systems written by Emily S. Andrews and published by World Bank Publications. This book was released on 2006 with total page 198 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Formal pension systems are an important means of reducing poverty among the aged. In recent years, however, pension reform has become a pressing matter, as demographic aging, poor administration, early retirement, and unaffordable benefits have strained pension balances and overall public finances. Pension systems have become a source of macroeconomic instability, a constraint to economic growth, and an ineffective and/or inequitable provider of retirement income."

Download or read book Reforming the Greek Pension System written by Mr. Alvar Kangur and published by International Monetary Fund. This book was released on 2021-07-16 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Greek pension system has been costly, complex, and distortive, which has contributed to Greece’s fiscal problems and discouraged labor force participation. Several attempts to reform the system faltered due to lack of implementation, pushback by vested interests, and court rulings leading to reversals. A series of reforms introduced throughout 2015–17 unified benefit and contribution rules, removed several distortions and reduced fragmentation and costs. If fully implemented throughout the long-term, these reforms can go a long way towards enhancing the pension system affordability. However, reforms faced setbacks and fell short of creating stronger incentives to build long contribution histories, to deliver sustainable growth by improving the fiscal policy mix, and to ensure fairness and equitable burden sharing across generations and interest groups. Policy priorities should aim towards fully implementing the 2015–17 reforms and complementing them with additional reforms to address these remaining objectives.

Download or read book Chile Selected Issues written by International Monetary Fund. Western Hemisphere Dept. and published by International Monetary Fund. This book was released on 2021-04-23 with total page 103 pages. Available in PDF, EPUB and Kindle. Book excerpt: Selected Issues

Download or read book Global Pension Challenges written by Patrick J. Ring and published by Taylor & Francis. This book was released on 2024-03-25 with total page 174 pages. Available in PDF, EPUB and Kindle. Book excerpt: National pension systems face a range of tough social and economic demands and pressures. These are complex to navigate, especially in a twenty-first century world that has ushered in global uncertainty and pressing challenges - even threatening the planet’s very sustainability – with implications for pensions that policymakers, financial services providers and individuals themselves must address. This book probes, and unpacks, what pension systems aim to achieve, the uncertainties they face and how they are attempting to resolve them. Analysing pension provision from the systemic, political-economy and individual perspectives, it sets out and contextualises commonalities and differences in pension systems across the globe, looking at current developments in both public and private pension provision, structures and regulation. Moreover, the reader is encouraged to question how national pension systems can best serve their populations and ensure the ‘sustainability’ of later-life incomes in the light of today’s global pension challenges. Global Pension Challenges: Pensions, Saving and Retirement in the Twenty‐First Century is an essential read for business, finance and social-policy academics and students, those working in the pensions industry and in the areas of welfare reform and advocacy, as well as the general public wishing to know more about the retirement issues we will all face in the coming years.

Download or read book Financialization Austerity and Inclusion in Latin America and the Caribbean written by Rana S. Gautam and published by Lexington Books. This book was released on 2023-12-06 with total page 183 pages. Available in PDF, EPUB and Kindle. Book excerpt: Gautam, Pinheiro, and Wilson analyze the spread of financialization in Latin America and the Caribbean, highlighting the ideational origins of financialization outside the region, its effects on government budgeting and social inclusion, and options for increased inclusivity.

Download or read book Global Assessment Report on Disaster Risk Reduction 2022 written by United Nations Office for Disaster Risk Reduction and published by . This book was released on 2022 with total page 254 pages. Available in PDF, EPUB and Kindle. Book excerpt: The central question for this year's report is how governance systems can evolve to better address the systemic risks of the future. In today's crowded and interconnected world, disaster impacts increasingly cascade across geographies and sectors, as the COVID-19 pandemic and climate change are rapidly making clear. Despite progress, risk creation is outstripping risk reduction. Disasters, economic loss, and the underlying vulnerabilities that drive risk, such as poverty and inequality, are increasing just as ecosystems and biospheres are at risk of collapse. The report highlights that a) the climate emergency and the systemic impacts of the COVID-19 pandemic point to a new reality; b) understanding and reducing risk in a world of uncertainty is fundamental to achieving genuinely sustainable development; and c) the best defense against future shocks is to transform systems now, to build resilience by addressing climate change, and to reduce the vulnerability, exposure, and inequality that drive disasters.

Download or read book Social Security Law in Chile written by Emilio Morgado-Valenzuela and published by Kluwer Law International B.V.. This book was released on 2024-01-18 with total page 227 pages. Available in PDF, EPUB and Kindle. Book excerpt: Derived from the renowned multi-volume International Encyclopaedia of Laws, this book describes the social security regime in Chile. It conveys a clear working knowledge of the legal mechanics affecting health care, employment injuries and occupational diseases, incapacity to work, pensions, survivors’ benefits, unemployment benefits and services, and family benefits. The analysis covers the field of application, conditions for entitlement, calculation of benefits, financing, the institutional framework, and relevant law enforcement and controls. Allowances for retirees, employees, public sector workers, the self-employed, and the handicapped are all clearly explained, along with full details of claims, adjudication procedures, and appeals. Succinct yet eminently practical, the book will be a valuable resource for lawyers handling social security matters in Chile. It will be of practical utility to those both in public service and private practice called on to develop and to apply social security law and policy, and of special interest as a contribution to the comparative study of social security systems.

Download or read book OECD Economic Surveys Chile 2022 written by OECD and published by OECD Publishing. This book was released on 2022-09-23 with total page 120 pages. Available in PDF, EPUB and Kindle. Book excerpt: Chile’s economy recovered swiftly from the pandemic on the back of exceptionally strong policy support, which eventually led to a significant overheating of the economy. Inflation has risen amid buoyant private consumption, further aggravated by the Russian aggression on Ukraine.

Download or read book Regional Economic Outlook October 2021 Western Hemisphere A Long and Winding Road to Recovery written by INTERNATIONAL MONETARY FUND. and published by International Monetary Fund. This book was released on 2021-10-21 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: An economic recovery is underway in Latin America and the Caribbean (LAC) but the pandemic still casts shadows on much of the region. The recovery was robust in the first quarter of 2021 but lost momentum in some countries in the second quarter, reflecting the rebound in COVID-19 cases. Real GDP is projected to grow by 6.3 percent in 2021, followed by a more moderate growth of 3 percent in 2022, but would not catch up with pre-pandemic trends in the medium term as persistent weakness in labor markets raises risks of scarring. Broadly favorable external conditions, high commodity prices, and pent-up demand support short-term growth, while monetary and fiscal policy reversals work in the other direction. Risks to the outlook are tilted downward. Main downside risks are the emergence of more transmissible and deadlier COVID-19 variants, tightening of global financial conditions, sovereign debt rollover risks, and social unrest as a year with heavy election schedule looms. Fiscal policy should allocate sufficient resources for health spending, including vaccination, and continue to support households and firms in a more targeted fashion while the pandemic persists, backed by credible assurances of medium-term debt sustainability to maintain access to finance. Monetary policy has started to address inflationary pressures but should continue to support economic activity insofar as the dynamics of inflation expectations permit. If rising inflation threatens to de-anchor inflation expectations, central banks should tighten monetary policy to signal a commitment to inflation targets and avoid persistent increases in inflation. Preemptive and decisive action should be accompanied with clear and transparent communication. Financial policy should shift from blanket support to targeted support of viable firms, to ensure that necessary labor and capital reallocations are not hindered. Supply-side policies should foster inclusive growth, including through progressive and growth-friendly tax reforms and measures to intensify climate change adaptation and mitigation.

Download or read book Reform Options for Mature Defined Benefit Pension Plans The Case of the Netherlands written by Mr.Marc Gerard and published by International Monetary Fund. This book was released on 2019-01-25 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Netherlands has been operating fully funded, defined benefit second pillar pension schemes that have consistently ranked high worldwide for delivering high replacement rates while featuring strong solidarity among members. Yet the long-term sustainability of the Dutch pension funds has been undermined in recent years by protracted low interest rates and unfavorable demographic developments, exacerbating controversies over intergenerational transfer mechanisms within the plans. This has prompted a national debate over ways to move toward more individualization while preserving financial security at retirement for all. This paper draws on this experience, illustrated by stress testing simulations and assessed vis-à-vis solutions implemented in peer countries, to discuss the main policy trade-offs associated with the reform of mature pension systems in advanced economies.

Download or read book Equitable and Sustainable Pensions written by Mr.Benedict J. Clements and published by International Monetary Fund. This book was released on 2014-03-08 with total page 432 pages. Available in PDF, EPUB and Kindle. Book excerpt: Pension reform is high on the agenda of many advanced and emerging market economies, for many reasons. First, public pensions often constitute a large share of government expenditure. Second, population aging means that reforms would be needed just to keep pension spending from rising in the future. Third, in many economies, low or falling pension coverage will leave large segments of the population without adequate income in old age and at risk of falling into poverty. Although a number of studies have assessed the effects of pension reforms on fiscal sustainability, a systematic analysis of equity issues in pension systems—and how countries have grappled with these issues—has yet to be undertaken. This book brings together the latest research on equity issues related to pension systems and pension reforms in the post-crisis world. Some of the key issues covered include: the effect of pension systems on intergenerational equity and the impact of pension reforms on poverty, the effects of pension reform measures on fiscal sustainability and equity, and the fiscal consequences of achieving different equity goals. It also presents country case studies. The volume provides a rich menu of material to assist policymakers and academic audiences seeking to understand the latest research in this area, as well as the lessons and challenges for the design of reforms.

Download or read book Old age Income Support in the 21st Century written by Robert Holzmann and published by World Bank Publications. This book was released on 2005-01-01 with total page 246 pages. Available in PDF, EPUB and Kindle. Book excerpt: The past decade has brought an increasing recognition to the importance of pension systems to the economic stability of nations and the security of their aging populations. This report attempts to explain current policy thinking and update the World Bank's perspective on pension reform. This book incorporates lessons learned from recent Bank experiences and research that have significantly increased knowledge and insight regarding how best to proceed in the future. The book has a comprehensive introduction and two main parts. Part I presents the conceptual underpinnings for the Bank's thinking on pension systems and reforms, including structure of Bank lending in this area. Part II highlights key design and implementation issues where it signals areas of confidence and areas for further research and experience, and includes a section on regional reform experiences, including Latin American and Europe and Central Asia.