FIAP was invited to attend the OECD meeting on private pensions (OECD Working Party on Private Pensions, WPPP) held in Paris, France, on December 4 and 5, 2017.

Specifically, on December 5, a FIAP delegation was invited to speak at the round table on the risks faced by the pension systems. On December 6, the delegation was received by the Secretary General of the OECD, Mr. Angel Gurría. The FIAP delegation on this occasion comprised its President, Guillermo Arthur; the CIO of Principal, Roberto Walker; and the Chairman of the Chilean Association of AFPs, Andrés Santa Cruz.

On both occasions, FIAP underscored the fact that, despite the shared diagnosis and the main known solutions to the pension problem, the reforms that have been proposed in several countries of the region move in the opposite direction, or are disconnected from them, due to a large extent to the ideological bias in the discussion. In its presentation, FIAP referred to the proposal to reopen a distribution system in Chile; the legislation that authorized the withdrawal of 95.5% of the accumulated funds by all workers at retirement age, and the recent reform proposal of creating a centralizing agency in Peru; and the postponement of the reforms for the proper functioning of the system in countries such as Colombia and Mexico.

FIAP also reiterated the need for Governments to introduce measures in line with the diagnosis of the current situation of the pension systems in Latin America, such as:

1. Automatically updating parameters (contribution rate, retirement age), to adjust them to changes in life expectancy.
2. Decisively promoting voluntary pension savings, through mechanisms such as tax incentives, greater liquidity, free competition, matching contributions, and automatic enrollment.
3. Put forward proposals that contribute to improving the long-term returns of pension resources.
4. Separate the pension funds from any purpose other than the financing of pensions, as noble as it may be.
5. Introduce non-contributory pensions system. Given the levels of informality and contribution density, it is imperative to establish a non-contributory pillar focusing on the most vulnerable sectors, financed with the country’s general taxes, to protect them from poverty in old age.
6. Expand available pension options to meet the requirements of individuals.
7. Provide adequate advisory services to members when choosing a pension mode.