¿Está Latinoamérica Alejándose De Las Cuentas Individuales De Pensiones? (Is Latin America Retreating from Individual Retirement Accounts?)

Regímenes Jubilatorios en países emergentes de Latinoamérica: Pueden coexistir los sistemas de capitalización individual y los de reparto?

“…As the matter is of the outmost importance for the Region, this survey aims to contribute to the discussion of appropriate pension systems, for what the performance of both the PAYG and the Individual Capitalization Scheme is critically reviewed for eight developing and emerging countries: Argentina, Bolivia, Brazil, Chile, Colombia, México, Perú and Uruguay, in line with what Bertranou et al (2009) called the First Round of Reforms. This assessment purports not only to point out the regimes᾽ shortages and drawbacks but also to ascertain whether both can be jointly and advantageously used when optimizing the working of pension systems is the upheld objective.…”

“…In a very interesting article in which Bertranou et al (2009) wondered whether Latin American countries were actually moving away from individual capitalization accounts these authors emphasized that fear of fi scal unbalances and badly managed PAYG regimes counted at the outset for countries to resort to pensions based on capitalization but also pointed out that three main issues could not appropriately be dealt with by fully funded schemes; that is, a low level of coverage, the contraction of social nets and imperfections in regulatory frameworks. The authors᾽ fi rst assertion is clearly refl ected not only by fi gures in Table 4 but also but the bars of the ensuing Graph 6 in which coverage rates 26 for the seven countries 27 are measured for two points in time: the moment before countries adopted a fully funded scheme (also called fi rst round of reforms) and the year 2002, depicted in the graph as after.…”

“…The underlying rationale behind what Bertranou et al (2009) called the First Round of Reforms was the idea that defi ned contribution schemes were going to enhance not only the level of coverage, but also tax compliance, based on the assumption that individuals would not only fi nd a stronger connection between contributions and benefi ts but also because they would regard contribution payments as savings instead of a tax; nevertheless, and supporting the evidence given by Table 4, the above Graph 6 clearly shows that the rate of coverage fell in all countries once fully funded schemes started to operate. The main reasons for this to happen were already mentioned; that 26.…”

“…Argentina was a clear example of this: the government did away with the regime in 2008 notwithstanding the fact that -the year before-the option of allowing those individuals in capitalization accounts to return to the PAYG systems was rejected by more than 80% of affi liates. Although many experts have pointed out that the use fully funded schemes en Latin American countries gathered political rejection and experienced contraction, the prevailing idea is that fully funded and unfunded regimes can and should coexist for what, as Bertranou et al (2009) suggested, individual accounts should be improved while accepting -at the same time-that PAYG and non contributory regimes may successfully accompany properly designed and run defi ned-contribution schemes as the former could have, at least in relation to solidarity, equity and distributional goals, a better performance.…”

Pension Systems Compared: A Polarised Perspective, a Diverse Reality

“…As stated by Bertranou (2006 andBertranou et al 2009), the reforms of the 1990s adjusted financial and economic goals to move towards capitalisation while in the first decade of the present century the poverty-relief goals were readjusted, and as such the coverage was extended to those sectors lacking contributory conditions. Based on these considerations, the reflection made by Mesa-Lago (2004: 99) is relevant.…”