Find out which country has the best pension system in South America: Where is Chile and Peru? | Mercer | CFA Institute | rest | AFP | Colombia | Institute Global Pension Index 2023 | AFP Integra | the world

Pensions in South America are a topic of ongoing debate among various governments in the region. Photo: Composite LR/Vecteezy /Hoy.es

Retirement is a much awaited phase WorkerAfter years of efforts you will be able to use it Pension fund Of the money he contributed during his years of service. This amount is usually administered and paid to contributors according to the age established in each country: for example, 67 years for the United States and 65 for the United States. Peru.

In this sense, the Mercer CFA Institute Global Pension Index Those are the countries revealed in its latest report of 2023 South America The best and the worst Pension systemTaking into account factors such as relevance, sustainability and integrity.

Mercer classified pensions in South America. Photo: Republic

A country in South America with the best pension system

The country of South America The country with the best pension system is Chile, with an overall score of 69.9, 70 for relevance, 71.3 for sustainability and 84 for integrity, the report says. Mercer. With this, it not only ranks first in the region but also rubs shoulders with countries like Canada oh Belgium.

To know the status of pension scheme ChileMercer analyzed how effective the country's pension system is, highlighting its growth in integrity levels by increasing from 78.9 to 84.0 points compared to the 2022 results.

Chile's pension system is one of the best in Latin America. This is comparable to some countries in Europe. Photo: Mercer

Some of the recommendations the report recommends to improve the pension system include minimum support for poor adults and raising the retirement age for women. On the other hand, it is proposed to add additional income to the caregivers of children.

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Chile's pension system has improved in Mercer's rankings. Photo: AFP

It is important to note that Chile It was the first country in Latin America to establish a pension system. It began in 1924, implementing a systematic payment system administered by pension funds that established membership conditions and coverage. However, this changed in 1980 AFP system oh Individual capitalization system (Act 3,500). Unlike the previous one, this one is private; That is, every worker pays his pension.

What are retirement pensions like in Peru?

Peru It ranks fifth regionally and 34th globally. The value slightly decreased from 55.8 to 55.5 compared to the data obtained in 2022. As it was 62.4 in 2018, this represents a steady decline.

The pension system in Peru is divided into two groups: the public defined benefit (DB) system, which is pay-as-you-go, and the defined contribution (DC) system, which is fully funded and managed by the private sector.

Peru's pension system has reflected declines in recent years. Photo: Mercer

Pension rankings in Latin America

  1. Chile
  2. Uruguay
  3. Colombia
  4. Brazil
  5. Peru
  6. Mexico
  7. Argentina

What measures are being taken in Chile to improve its pension system?

Although pension system Chile Recognized worldwide, many Chileans need these important changes, one of the main demands during the social eruption of 2019. So, the president Gabriel BoricCommitted to demanding a reform, he sent a proposal that was approved by a majority by the House of Representatives on January 24, so it is expected to be debated by the Senate in March.

Among the most important aspects of the plan is an increase in the universal guaranteed pension provided by the government to 250 thousand pesos (US$294) for those aged 65 or older.

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What factors are taken into account to characterize Latin American pension systems?

To analyze and classify 47 pension systems around the world, including those in Latin America, Mercer drew on three study sub-tables. These are measured as follows:

adjustment

  • Benefits
  • System design
  • savings
  • Public assistance
  • Home ownership
  • Development assets

Consistency

  • Total assets
  • Demography
  • Public expenditure
  • Public debt
  • Economic development
  • Pension protection

Honesty

  • Regulation
  • governance
  • Data protection
  • Communication
  • Running costs

Read more

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