Govenrment and Business Environment Case Study

Chilean Pension Model

OR

Abstract:
Inherent weaknesses in the pay-as-you-go system and political expediencies, which contributed to the problems in the pension system, necessitated pension reforms. In 1981, Chile pioneered the pension reforms. These reforms were radical and had far-reaching consequences. The countries that had never reformed their pension systems due to a myriad of problems started emulating the Chilean Pension Model. Since then this model has been attracting lots of interest all over the world.

Pedagogical Objectives:

To understand the inherent weaknesses in the pay-as-you-go pension system, the economic implications of pension system and how Chile successfully transformed the existing pension system to emerge as an example for rest of the world.

Keywords : fiscal policy case study, Chilean pension system, Social security system, Pay-as-you-go system, Individual retirement accounts and individual capital accounts, Pension reforms, Administradoras de Fondos de Pensiones, Superintendencia de Administradoras de Fondos de Pensiones, SAFP, Recognition bonds, Privatisation of pension system, General Pinochet, Superintendent of Pension Fund Management Companies, EMPART, Servicio de Seguro Social, CANAEMPU