Is Latin America Retreating from Individual Retirement Accounts?

Issue Brief #9-14, Center for Retirement Research at Boston College, Chestnut Hill, MA, July 2009

19 Pages Posted: 30 Jul 2013

See all articles by Fabio Bertranou

Fabio Bertranou

International Labour Organization

Esteban Calvo

Universidad Mayor; Columbia University

Evelina Bertranou

Matrix Knowledge Group

Date Written: July 2009

Abstract

In 1981, Chile initiated old-age pension reforms that introduced mandatory funded individual retirement accounts (IRAs) and moved away from public systems. Beginning in the 1990s, ten other Latin American countries followed in Chile’s wake. In recent years, even before the onset of the financial crisis, a second round of pension reforms was initiated to strengthen the public component and address the problems created by individual accounts. The most extreme case of retrenching is Argentina, where IRAs were eliminated for mandatory contributions in late 2008. This country has gone back to a traditional defined-benefit pay-as-you-go scheme. This brief reviews the two rounds of pension reforms to determine whether Latin American countries are moving away from individual pensions. Even though this region is quite heterogeneous, its labor markets and social security systems share some common features, such as a large informal economy and a variety of uncoordinated institutions providing old-age income protection. The 2008-2009 financial crisis and economic recession is posing new challenges to systems that have introduced IRAs.

Suggested Citation

Bertranou, Fabio and Calvo, Esteban and Bertranou, Evelina, Is Latin America Retreating from Individual Retirement Accounts? (July 2009). Issue Brief #9-14, Center for Retirement Research at Boston College, Chestnut Hill, MA, July 2009, Available at SSRN: https://ssrn.com/abstract=2302796 or http://dx.doi.org/10.2139/ssrn.2302796

Fabio Bertranou

International Labour Organization ( email )

Av. Cordoba 950
Piso 13
Buenos Aires, C1054AAV
Argentina
54-11-43937076 (Phone)

HOME PAGE: http://www.ilo.org

Esteban Calvo (Contact Author)

Universidad Mayor ( email )

Badajoz 130, oficina 1305
Las Condes
Santiago, RM 7560908
Chile

HOME PAGE: http://ciss.umayor.cl/

Columbia University

722 W. 168th Street
Robert N. Butler Columbia Aging Center, Room 412
New York, NY 10032
United States

HOME PAGE: http://https://www.mailman.columbia.edu/people/our-faculty/ec3065

Evelina Bertranou

Matrix Knowledge Group ( email )

1st Floor Kemp House 152
160 City Road
London, EC1V 2NP
United Kingdom

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