| Abstract: |
In the past two decades, Latin American countries reformed their pension
systems focusing mainly on addressing the weaknesses of the contributory
schemes - fiscal unsustainability, low coverage levels and a high degree of
segmentation- and barely addressed the non-contributory element. The reform
experiences show however that the intended reforms did not manage to meet
their objectives. Firstly, to this day, a large proportion of the population
remains inadequately covered by the contributory system. Secondly, the fiscal
performance and outcome of the reform was worse than originally planned. The
possibilities for the success of these reforms faced several constraints of a
structural nature that are independent of the pension system itself and that
as a result can not be overcome by a pension reform including mainly the
limited savings capacity of some population groups and the instability and
precariousness of the labor markets in the region. The Latin American
experience shares similarities with that of China in terms of coverage, labor
market informality. Both cases attest to the importance of combining
contributory and non-contributory components in pension reform design. |