Lessons for Asian Countries from Pension Reforms in Chile

Mukul G. Asher and Deepa Vasudevan

No 381, PIE/CIS Discussion Paper from Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University

Abstract: Chile's 1981 reform revolutionized pension design and created a system that was lauded and emulated widely. The main feature of the system was the creation of state-mandated, privately managed individual pension capitalization accounts based on contributions of employees. After nearly three decades of experience, there is a reassessment of the extent to which the pension system has achieved its objectives, particularly with respect to coverage and adequacy. In March 2006, the newly elected President Bachelet set up a Presidential Advisory Council on Pension Reform under the chairmanship of Mario Marcel to evaluate the existing pension system. This paper examines the rationale and the nature of the recommendations made by the Council. The analysis focuses on the structure of the proposed new pension system and risk-sharing implications of different pillars of the system, the accessibility of the existing pension system in terms of coverage, particularly for women and self-employed persons, the impact of reform on transaction costs; investment policies and management and their implications for rates of return and financial market development. The implications of the new system on pension design and policy debate in Asian countries are addressed. The paper suggests that must imbibe lessons from countries such as Chile and urgently undertake the task of constructing sustainable, robust and adequate pension systems and social safety nets.

Keywords: Chile; Asia; Pension Reform (search for similar items in EconPapers)
JEL-codes: G23 H55 (search for similar items in EconPapers)
Pages: 77 pages
Date: 2008-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/15826/pie_dp381.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hit:piecis:381

Access Statistics for this paper

More papers in PIE/CIS Discussion Paper from Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University Contact information at EDIRC.
Bibliographic data for series maintained by Digital Resources Section, Hitotsubashi University Library ().