First Debating Session

THE GOAL IS TO PROMOTE THE PENSION SAVINGS CULTURE AND STRENGTHEN THE LABOR MARKET

Cusco-Peru, May 15, 2014. The first session – Extension of Coverage and PROMOTION of Pension Savings – aimed at discussing recent experiences and the best practices used for increasing pension coverage and contribution density in the individually funded systems.

The initial presentation was delivered by Santiago Levy, Vice President for Sectors and Knowledge, Inter-American Development Bank (IDB), who commented that pension systems work if members always save over long periods of time.  The challenge is to maintain a constant rate of pension savings by self-employed workers. To achieve this, they must be motivated, reminding them of the future benefits of savings for maintaining liquidity after retirement.

The panel opened with a speech by the Vice-Minister of Labor and Social Security, Sylvia Cáceres, who announced that the Ministry of Labor and PROMOTION of Employment will work together with the Ministry of Education to develop a pension culture that is currently absent in the country.

Vice Minister Caceres added that the Ministry of Labor and PROMOTION of Employment will propose a budget program based on results in the social security area, in order to accurately track the achievement of coverage expansion targets.

On the other hand, René Novellino, Chairman of the Salvadorian Association of Pension Fund Administrators (ASAFONDOS), said that 50% of the economically active population in his country is enrolled in the private pension system. However, only 28% make ongoing contributions due to the difficulty of obtaining quality employment.

He highlighted the fact that only 1 of every 6 adults receives a pension, which in the long run could be a very serious problem.

Claudia Cooper, Manager of Institutional Clients of Compass Group, said that a major challenge in Peru is to foster a regulatory structure that encourages the evolution of companies comprising one person to large companies with more than 100 workers, which would generate greater movement in the domestic market and therefore an effect in the private pension system.

Due to the situation existing in Latin American countries, and especially in Peru, it was concluded that the design of more effective policies that would enable means of formal employment for workers and that would drive the growth of companies with promising futures, should be encouraged.

For further information kindly visit:
www.aafp-fiap-2014.com

see the official press realese here