Assessing Chiles Pension System Challenges And Reform Options PDF Download
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Author | : Samuel Pienknagura |
Publisher | : International Monetary Fund |
Total Pages | : 52 |
Release | : 2021-09-10 |
Genre | : Business & Economics |
ISBN | : 151359611X |
Download Assessing Chile's Pension System: Challenges and Reform Options Book in PDF, ePub and Kindle
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.
Author | : Marika Santoro |
Publisher | : International Monetary Fund |
Total Pages | : 21 |
Release | : 2017-03-13 |
Genre | : Business & Economics |
ISBN | : 1475586205 |
Download Pension Reform Options in Chile Book in PDF, ePub and Kindle
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.
Author | : Christoph Freudenberg |
Publisher | : International Monetary Fund |
Total Pages | : 47 |
Release | : 2019-07-11 |
Genre | : Business & Economics |
ISBN | : 1498326420 |
Download Informality and the Challenge of Pension Adequacy: Outlook and Reform Options for Peru Book in PDF, ePub and Kindle
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.
Author | : Stephen J. Kay |
Publisher | : OUP Oxford |
Total Pages | : 448 |
Release | : 2007-11-22 |
Genre | : Business & Economics |
ISBN | : 0191527696 |
Download Lessons from Pension Reform in the Americas Book in PDF, ePub and Kindle
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.
Author | : |
Publisher | : |
Total Pages | : 29 |
Release | : 2007 |
Genre | : Pensions |
ISBN | : |
Download Social Security Book in PDF, ePub and Kindle
Over the past few years, there has been intense debate about Social Security reform in the United States. A number of options, ranging from changing the benefit formula to adding individual accounts, has been discussed. The policy debate takes place against the backdrop of an aging population, rising longevity, and relatively low fertility rates, which pose long-range financial challenges to the Social Security system. According to the 2007 Social Security Trustees Report's intermediate assumptions, the Social Security trust funds are projected to experience cash-flow deficits in 2017 and to become exhausted in 2041. As policymakers consider how to address Social Security's financing challenges, efforts of Social Security reform across the world have gained attention. One of the most oft-cited international cases of reform is Chile. Chile initiated sweeping retirement reforms in 1981 that replaced a state-run, pay-as-you-go defined benefit retirement system with a private, mandatory system of individual retirement accounts where benefits are dependent on the account balance. As a pioneer of individual retirement accounts, Chile has become a case study of pension reform around the world. Although Chile's experience is not directly comparable to the situation in the United States because of large differences between the countries, knowledge of the case may be useful for American policymakers. This CRS report focuses on the Chilean individual retirement accounts system. It begins with a description of the U.S. Social Security policy debate, along with a brief comparison of Chile and the United States. Next, the report explains what Chile's individual retirement accounts system is and how it works. The pension reform bill sent to the Chilean Congress for debate in 2007 is also discussed. The report does not address other components of Chile's social security system, such as maternity, work injury, and unemployment. The final section provides an assessment of Chile's now 26-year-old individual retirement accounts system. Pension reforms have contributed to the rapid growth in the Chilean economy over the past two decades and returns on pension fund investments have been greater than expected. Administrative costs, however, have been high and participation rates have been modest at best. There is concern that the system does not cover the entire labor force and provides inadequate benefits to low income workers.
Author | : Mr.Benedict J. Clements |
Publisher | : International Monetary Fund |
Total Pages | : 86 |
Release | : 2013-01-25 |
Genre | : Business & Economics |
ISBN | : 147556631X |
Download The Challenge of Public Pension Reform in Advanced and Emerging Economies Book in PDF, ePub and Kindle
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.
Author | : Mr. Alvar Kangur |
Publisher | : International Monetary Fund |
Total Pages | : 26 |
Release | : 2021-07-16 |
Genre | : Business & Economics |
ISBN | : 1513588842 |
Download Reforming the Greek Pension System Book in PDF, ePub and Kindle
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.
Author | : Emily S. Andrews |
Publisher | : World Bank Publications |
Total Pages | : 198 |
Release | : 2006 |
Genre | : Business & Economics |
ISBN | : 0821365525 |
Download Pension Reform and the Development of Pension Systems Book in PDF, ePub and Kindle
"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."
Author | : Martin Feldstein |
Publisher | : University of Chicago Press |
Total Pages | : 484 |
Release | : 2008-04-15 |
Genre | : Political Science |
ISBN | : 0226241823 |
Download Privatizing Social Security Book in PDF, ePub and Kindle
This volume represents the most important work to date on one of the pressing policy issues of the moment: the privatization of social security. Although social security is facing enormous fiscal pressure in the face of an aging population, there has been relatively little published on the fundamentals of essential reform through privatization. Privatizing Social Security fills this void by studying the methods and problems involved in shifting from the current system to one based on mandatory saving in individual accounts. "Timely and important. . . . [Privatizing Social Security] presents a forceful case for a radical shift from the existing unfunded, pay-as-you-go single national program to a mandatory funded program with individual savings accounts. . . . An extensive analysis of how a privatized plan would work in the United States is supplemented with the experiences of five other countries that have privatized plans." —Library Journal "[A] high-powered collection of essays by top experts in the field."—Timothy Taylor, Public Interest
Author | : Nicholas Barr |
Publisher | : Oxford University Press |
Total Pages | : 763 |
Release | : 2008-09-17 |
Genre | : Business & Economics |
ISBN | : 0199885990 |
Download Reforming Pensions: Principles and Policy Choices Book in PDF, ePub and Kindle
Mandatory pensions are a worldwide phenomenon. However, with fixed contribution rates, monthly benefits, and retirement ages, pension systems are not consistent with three long-run trends: declining mortality, declining fertility, and earlier retirement. Many systems need reform. This book gives an extensive nontechnical explanation of the economics of pension design. The theoretical arguments have three elements: * Pension systems have multiple objectives--consumption smoothing, insurance, poverty relief, and redistribution. Good policy needs to bear them all in mind. * Good analysis should be framed in a second-best context-- simple economic models are a bad guide to policy design in a world with imperfect information and decision-making, incomplete markets and taxation. * Any choice of pension system has risk-sharing and distributional consequences, which the book recognizes explicitly. Barr and Diamond's analysis includes labor markets, capital markets, risk sharing, and gender and family, with comparison of PAYG and funded systems, recognizing that the suitable level of funding differs by country. Alongside the economic principles of good design, policy must also take account of a country's capacity to implement the system. Thus the theoretical analysis is complemented by discussion of implementation, and of experiences, both good and bad, in many countries, with particular attention to Chile and China.