• Self-employed workers make up approximately 40% of the total workforce, and more than 50% in some countries (Colombia, Peru, Honduras and Bolivia). Thus, their inclusion in the pension systems is crucial for them to receive the same degree of protection in old age as dependent workers.

• Despite the efforts in different countries to incorporate self-employed workers (Colombia and Peru), political pressure has made it difficult to first legislate and then enforce mandatory contribution. FIAP deems it crucial to incorporate this group of workers into the pension systems. Hence, only those self-employed workers who are able to contribute should be obligated to do so. Low-income self-employed workers should preferably be covered by non-contributory programs financed from taxes.

• There are means of providing social security protection for the self-employed other than incorporating them into the mandatory pension systems. These proposals include different mechanisms to encourage long-term savings in this segment, such as:

• • Implement simplified savings mechanisms and tax incentives, along with financial and pension education strategies for those self-employed workers capable of contributing.
  • Link contributions to the pension system with tax returns and the granting of licenses etc.
  • Engage in behavioral procedures to increase pension savings, combining automatic enrollment in savings programs, active choice incentives and commitment mechanisms, simplified decision-making, simple reminders, and the offering of incentives (means-tested subsidies or greater savings liquidity).
  • Establish financial and technological innovations (e.g. use of mobile phones or new digital applications, allowing savings in the same locations where self-employed workers charge for their services, consume, or pay service providers).

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