• Ongoing population aging has put the PAYGO pension systems in check. These systems are in crisis worldwide. In order to address their financial problems, countries have had to introduce a series of parametric reforms. According to FIAP (2018), in a period of 22 years, between 1995 and June 2018, a total of 78 countries increased the contribution rate in their PAYGO programs; 55 countries had to increase the retirement age and 61 adjusted the formula for calculating benefits, cutting or freezing old-age pension amounts.
• The Note analyses the specific cases of Colombia, Argentina and Brazil, whose PAYGO systems have proven to be financially unsustainable.
• The serious plight of the PAYGO systems highlights the need to incorporate individually funded systems, which are financially sustainable, and which could also help to compensate for the loss of benefits experienced by pensioners due to the constant reductions in the benefits of the public PAYGO systems.

Download this Note in PDF here.