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FIAP > Boletín – Recientes > Pension Note No. 22: Voluntary pensions in emerging markets – January 2018
8 March, 2018

Pension Note No. 22: Voluntary pensions in emerging markets – January 2018

• Rapid population aging in emerging markets, together with the typically low coverage of their mandatory pension systems, could lead to a large percentage of their workforces lacking adequate pensions or sufficient savings on retirement.

• According to Richard Jackson, the success of emerging markets in guaranteeing pension safety will depend more and more on their ability to construct robust voluntary pension systems.

• The author recommends a series of measures for the success of the voluntary savings plans: automatic enrollment, together with automatic scaling, the introduction of new economic incentives aimed at the broad middle class, as well as flat government subsidies and counterpart contributions, all of which are essential for encouraging enrollment. Self-employed workers must also be offered special treatment, in the form of additional incentives and flexibility, to motivate them to enroll. Suitable investment policies that ensure the highest possible returns on savings during the accumulation phase, must also be designed. Policies in the decumulation stage must also provide workers with suitable alternatives for accessing their savings.

Review this Note in detail here.

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