Pay as you Go System versus Fully Funded Pension in Peru

Jorge Guillén () and Ruben Mosqueda ()

Revista Ecos de Economía, 2013

Abstract: The following paper analyses the sustainability of the Peruvian ''Pay as You Go System'' which is provided by the Government. In Peru, the ''Pay as you Go System'' coexists with Private Pension Funds or ''Fully Funded Pension''. Sometimes both systems compete with each other with advantages and disadvantages between them. We found that ''Pay as You Go System'' cannot be sustainable over a long period of time. In addition, based on a comparative analysis of advantages and disadvantages, we propose some recommendations to make Private Pension Funds (Fully Funded Pension) the best alternative to Pay as You Go System. ***** Este trabajo analiza la sostenibilidad del sistema pensional colectivo implementado por el gobierno peruano. En Perú, este sistema coexiste con el de fondos privados de pensiones o fondo individual. En algunos casos, estos dos sistemas compiten entre sí, con sus ventajas y desventajas entre ambos sistemas. Según nuestros hallazgos, el sistema pensional de reparto colectivo de pensiones no es sostenible en un largo plazo. Asimismo, sobre la base de un análisis comparativo de las ventajas y desventajas entre ambos sistemas, se formulan algunas recomendaciones para que los fondos privados de pensión (Sistema Individual) se conviertan en la mejor alternativa al sistema pensional colectivo.

Keywords: Fully Funded; Pay as You Go; Sustainability (search for similar items in EconPapers)
JEL-codes: G18 G21 G23 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:col:000442:011608

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