Download or read book Next Generation of Individual Account Pension Reforms in Latin America written by Barbara Kritzer and published by . This book was released on 2015 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Latin America led the world in introducing individual retirement accounts intended to complement or replace defined benefit state-sponsored, pay-as-you-go systems. After Chile implemented the first system in 1981, a number of other Latin American countries incorporated privately managed individual accounts as part of their retirement income systems beginning in the 1990s. This article examines the subsequent "reform of the reform" of these pension systems, with a focus on the recent overhaul of the Chilean system and major reforms in Mexico, Peru, and Colombia. The authors analyze key elements of pension reform in the region relating to individual accounts: system coverage, fees, competition, investment, the impact of gender on benefits, financial education, voluntary savings, and payouts.

Download or read book Development Centre Studies The Second Generation Pension Reforms in Latin America written by Queisser Monika and published by OECD Publishing. This book was released on 1998-09-30 with total page 145 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study provides a detailed description of all second-generation pension reforms in Latin America to date, evaluates the first years of operations of the new systems and outlines the problems and challenges which the systems are still facing.

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 Lessons from Pension Reform in the Americas written by Stephen J. Kay and published by OUP Oxford. This book was released on 2007-11-22 with total page 448 pages. Available in PDF, EPUB and Kindle. Book excerpt: Latin American experiments with pension reform began when Chile converted its public pay-as-you-go system to a system of private individual accounts in the early 1980s. Several other Latin American countries then followed suit, inspired both by Chile's reforms and by World Bank recommendations stressing compulsory government-mandated individual saving accounts. Individual accounts were subsequently introduced in a number of countries in Europe and Asia. Many are now re-evaluating these privatisations in an effort to 'reform the reform' to make these systems more efficient and equitable. This volume is the first to assess pension reforms in this new 'post-privatization' era. After a discussion on demographic trends in the foreword by Nobel laureate Robert W. Fogel, Section 1 of the book includes chapters on the role of pension system default options, the impact of gender, and a discussion of the World Bank's policies on pension reform. The chapter on the evidence from Chile's new social protection survey points to key lessons from the world's first privatization. Section 2 offers in-depth analysis of several significant reform initiatives in the hemisphere, and includes chapters on the United States, Canada, Mexico, Costa Rica, Brazil, Peru, Uruguay and Argentina. The volume provides an unparalleled account of the lessons from pension reform in the Americas, addressing the most pressing policy issues and highlighting a broad range of country experiences.

Download or read book A Quarter Century of Pension Reform in Latin America and the Caribbean written by Carolin A. Crabbe and published by IDB. This book was released on 2005 with total page 417 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Pension Reform in Latin America written by Armando Barrientos and published by Routledge. This book was released on 2018-12-20 with total page 280 pages. Available in PDF, EPUB and Kindle. Book excerpt: First published in 1998, this volume initially focused on Chilean pension reform, on which the author has published elsewhere, before moving onto Latin America more widely, with coverage extending from 1990 to the reform in Costa Rica and the Mexican pension reform in 1997. It emerged in the wake of reforms including in Peru (1993), Argentina and Colombia (1994) and Uruguay (1996). Particular focus is given to the new individual capitalization pension plans, along with arguments on the ignoring of pension schemes and its consequences, the connection of pension schemes to the labour market and the impact of pension schemes on the least advantaged. The Chilean model in particular has received praise from the IMF and the World Bank and these Latin American pension reforms will be of interest as a paradigm for other countries.

Download or read book Keeping the Promise of Social Security in Latin America written by Indermit S. Gill and published by World Bank Publications. This book was released on 2004-10-25 with total page 368 pages. Available in PDF, EPUB and Kindle. Book excerpt: Empirical analysis of two decades of pioneering pension and social security reform in Latin America and the Caribbean shows that much has been achieved, but that critical challenges remain. In tackling this unfinished agenda, a great deal can be learned from the reform experience of countries in the region. 'Keeping the Promise,' produced by the chief economist's office for the Latin America and Caribbean region at the World Bank, evaluates policy reforms in 12 countries, points to successes and shortcomings, and proposes priorities and options for future reform.

Download or read book Pension Reform in Latin America and Its Lessons for International Policymakers written by Tapen Sinha and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 310 pages. Available in PDF, EPUB and Kindle. Book excerpt: The experience of privatization of social security has been predominantly in the Latin American region. Eight countries have undertaken either full or partial privatization of pensions: Argentina, Bolivia, Chile, Colombia, El Salvador, Mexico, Peru, and Uruguay. What did the policymakers expect? Were expectations realized? Can we learn anything from the collective experience of these countries? Can they be applied to other countries that are aspiring to privatize? How did the World Bank and other international institutions affect these policies? Pension Reform in Latin America and Its Lessons for International Policymakers analyzes in detail these important questions. The book begins with a detailed account of economic conditions in Latin America. It then discusses various models that policymakers rely on. Starting with a purely demographic model, it lays out advanced models of overlapping generations of Samuelson. The book gives extensive details of privatized pensions in each of the eight reforming countries. Two chapters are devoted to analyzing the reform in each country. Finally, detailed lessons are drawn that will help shape the debate for policymakers in other countries.

Download or read book Pension Reform in Europe in the 90 and Lessons for Latin America written by M. Louise Fox and published by Santiago, Chile : Naciones Unidas, CEPAL/ECLAC, Special Studies Unit, Executive Secretariat Office. This book was released on 2001 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The New Logic of Social Security Reform written by Raúl L. Madrid and published by . This book was released on 1999 with total page 344 pages. Available in PDF, EPUB and Kindle. Book excerpt:

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 in Latin America written by Sri-Ram Aiyer and published by . This book was released on 1997 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Social Protection and the Market in Latin America written by Sarah M. Brooks and published by Cambridge University Press. This book was released on 2008-11-03 with total page 379 pages. Available in PDF, EPUB and Kindle. Book excerpt: Social security institutions have been among the most stable post-war social programs around the world. Increasingly, however, these institutions have undergone profound transformation from public risk-pooling systems to individual market-based designs. Why has this 'privatization' occurred? Why do some governments enact more radical pension privatizations than others? This book provides a theoretical and empirical account of when and to what degree governments privatize national old-age pension systems. Quantitative cross-national analysis simulates the degree of pension privatization around the world and tests competing hypotheses to explain reform outcomes. In addition, comparative analysis of pension reforms in Argentina, Brazil, Mexico and Uruguay evaluate a causal theory of institutional change. The central argument is that pension privatization emerges from political conflict, rather than from exogenous pressures. The argument is developed around three dimensions: the double bind of globalization, contingent path-dependent processes, and the legislative politics of loss imposition.

Download or read book Are Old Age Pension System Reforms Moving Away from Individual Retirement Accounts in Latin America written by Esteban Calvo and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This article reviews two rounds of pension reform in ten Latin American countries to determine whether they are moving away from individual retirement accounts (IRAs). Although the idea is provocative, we conclude that the notion of 'moving away from IRAs' is insufficient to characterise the new politics of pension reform. As opposed to the politics of enactment of IRAs of the late twentieth century, pension reform in Latin America in recent years has combined significant revival of public components in old-age income maintenance with improvement of IRAs. Clearly, the policy prescriptions that were most influential during the first round of reforms in Latin America have been re-evaluated. The World Bank and other organisations that promoted IRAs have recognised that pension reform should pay more attention to poverty reduction, coverage and equity, and to protect participants from market risks. The experience and challenges faced by countries that introduced IRAs, the changes in policies by international financing institutions, and the recent financial volatility and heavy losses experienced in financial markets may have tempered the enthusiasm of other countries from applying the same type of reforms. Scholars and policy-makers around the globe could benefit from looking closely at these changes in pension policy.

Download or read book Retiring the State written by Raúl L. Madrid and published by . This book was released on 2003 with total page 348 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the 1990s, numerous Latin American nations privatized their public pension systems. These reforms dramatically transformed the way these countries provide retirement income, and they provoked widespread protests from workers and pensioners alike. Retiring the State represents the first book-length study of the origins of this surprising trend. Drawing on original field research, including interviews with key policymakers, Madrid argues that the recent reforms were driven not by social policy, but by macroeconomic concerns. Countries facing growing financial pressures chose to privatize their pension systems largely to boost their domestic savings rates and reduce public pension spending in the long run. The author explores his arguments through detailed case studies of pension reform in Argentina, Brazil, and Mexico, a survey of social security privatization efforts in East Europe and Latin America as a whole, and a quantitative analysis of pension privatization worldwide.

Download or read book Reassembling Social Security written by Carmelo Mesa-Lago and published by Oxford University Press, USA. This book was released on 2008-01-31 with total page 488 pages. Available in PDF, EPUB and Kindle. Book excerpt: The reform of social security pensions and healthcare is a key issue for the modern world, and in many ways Latin America has acted as a social laboratory for the reform of these systems. This is the first book to comprehensively study these influential reforms in Latin America's pension and health care systems.

Download or read book Pension Goals and Institutional Arrangements written by Manuel Enrique Garcia Huitron and published by . This book was released on 2017 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: The pioneering pension reforms that brought a market for individual defined-contribution (DC) pension accounts to some Latin American countries in the 1980s and 1990s have failed to gain widespread social legitimacy. Such systems do not cover everyone, and the market design and regulatory infrastructure are not geared towards achieving the objective of maximizing the value of pensions. This failure stems from a combination of flaws in the fundamental design of the investment regime, which is highly regulated and focused on short-term outcomes, and of misaligned incentives of the firms operating in a market that is not conventional due to consumer inertia and other forces that limit competition. The contribution of this paper is twofold: (i) first and foremost, to define a new paradigm for the investment regime, with long-term features to target pension goals; (ii) second, to discuss in parallel changes in the design of the market that are needed for implementing such goal-based investment approach. By delineating few principles for ensuring competition in lifelong investing, we identify research and policy questions that require further work for clarifying how to pursue needed reforms. Given the technical and political barriers to implementing all these DC 2.0 principles in different country contexts, the paper seeks at the very least to establish a framework for framing discussions about future pension reforms in the region.