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FIAP’s President attended the ILO Conference, defending the fundamental basis of the individually-funded systems

17 July, 2019

In June this year, FIAP’s President, Guillermo Arthur, attended the International Labor Conference of the International Labor Organization (ILO), together with other representatives of the Employers’ Group, to join in the discussion of the 2012 Overall Review of the Social Protection Floor Recommendations, 2012 (No. 202); and also discuss the report on the reversal of the individual accounts systems (“Reversing Pension Privatizations: Rebuilding public pension systems in Eastern Europe and Latin America“), prepared by a group of the ILO’s Department of Social Protection and presented as the agency’s opinion, which argues that the reversion of the individual account systems and return to the PAYGO systems is due to the failure of the former, when in fact the reason for such reversal is the inability of the countries that implemented the switch from a PAYGO to an individually-funded system to survive the transition period, for fiscal reasons.

In the discussion that took place in the Standards Application Committee, the employer group was represented by its spokesman, Philip O ‘Reilly; the Colombian delegate, Alberto Echavarría; the Salvadorean delegate, Waldo Jiménez; the Chilean delegate, Fernando Alvear, and the Mexican delegate, Fernando Yllanes. The President of FIAP spoke as the representative of the International Organization of Employers (IEO).

The main arguments of the participants were:

  1. Non-viability of the public PAYGO systems.
  2. False reasons given for explaining reversions. They are not due to failure, but to inability to cope with the transition.
  3. Ideological bias and use of documents not emanating from tripartism.
  4. Success of the individually-funded systems in improving pensions and contributing to economic development.

Regarding the aforementioned document on the reversal of the individually-funded systems, on Friday, June 14, the President of FIAP held a meeting with the Director of the Social Protection Department of the ILO, Ms. Valérie Schmitt, to reiterate FIAP’s complaint regarding the errors contained in the aforementioned study, and also to examine the possibility of holding a round table to discuss the current challenges of the pension systems.

 

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