The Study on the Privatization of Public Pension Schemes in Latin America
Date Issued
2009
Date
2009
Author(s)
Ren, Yun-Nan
Abstract
Since 1980s, about ten countries in Latin America have become a laboratory for the privatization of public pension schemes. These countries are Chile, Peru, Argentina, Colombia, Uruguay, Bolivia, Mexico, El Salvador, Costa Rica and Dominican Republic. They switched from state-sponsored pay-as-you-go (PAYG) to fully funded pension systems based on individual accounts, and thus the old defined benefit (DB) formula were replaced with a defined contribution (DC) structure.he privatization of public pension schemes in Latin America have already become a unique regional characteristic at present; it is also an important test on the reform of public pension. This thesis gets a bird''s-eye view of the operation of Latin American public pension privatization, and by using research methods of secondary data analysis, we evaluate such policies in the dimesions of efficiency and fairness with economic and social indicators.n this study, we find public pension privatization could help accumulate considerable pension fund, and the rate of returns of investment is raised to some extent too. However, the commission that the private companies collected is quite high, and the new systems still had very low coverage. As for the fair part, the privatization of Latin American country''s public pension let the gender issues improved slightly, most countries don’t keep an independent retirement system of civil service any more, last but not least, the fully funded system could avoid the out-of-balance disadvantage among generations.ith this research and its explanation, general readers could understand the privatization of public pensions in Latin America, and researchers may also use this article like following up a clue and carry on deep discussion and cultivation. This article could make the research of public pensions more holistic and comprehensive.
Subjects
Latin America
public pension
privatization
pension reform
fully funded system
PAYG
Type
thesis
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