Chile’s Private Pension Experience and the Outlook for New Reforms

Chile’s widely imitated pension system, introduced in the 1980s and lauded for its high degree of privatization, is under review. A series of reforms proposed last October by President Sebastián Piñera now making their way through Congress would try to address concerns expressed by citizens in recent years. Many have been dissatisfied with lower-than-expected payments from the system, among other perceived shortcomings, such as lower benefits for women and informal or intermittent workers. Piñera’s proposals would ask employers to contribute significantly more to workers’ plans, while the government would also increase its contribution to a pooled fund.

Some analysts have, however, questioned if the proposals go far enough, and how Chile can help current retirees who have not accrued anticipated benefits. With the legislation under review in Congress, it is timely to consider how Chile’s pension reform is taking shape and what other countries can take away from its experience.

Our meeting will address several questions, including: What is the state of Chile’s pension system today, and what reforms are needed? Why have some participants in the plan been dissatisfied, and will reforms currently pending in Congress address their concerns? What lessons can other countries learn from Chile’s innovative pension system, and how can policymakers overcome any obstacles?

A light breakfast will be served. 

Follow this event on Twitter at #ChilePensionReform and @The_Dialogue.

Opening Remarks:

Michael Shifter

President, Inter-American Dialogue (@MichaelShifter) 

Speakers:

Fernando Larraín

Director General, AFP Association of Chile 

Truman Packard

Lead Economist, World Bank

Olivia Mitchell

Director, Boettner Center for Pensions and Retirement Research, The Wharton School, University of Pennsylvania

Moderator:

Sergio Urzua

Associate Professor, University of Maryland (@surzua_chile)