• Is it really necessary to encourage voluntary pension savings? Due to demographic changes (greater life expectancy and reduction in the birth rate), the drop in interest rates and market yields, among other factors, pension systems in the vast majority of countries are facing serious financial sustainability issues (Distribution Systems) and providing pensions that fail to meet workers’ expectations. Demographic changes will continue to evolve over the next decades, negatively and more severely affecting the finances of pension systems worldwide.

• Increasing the retirement age and the contribution rate are parametric changes that allow pension systems to improve their financial sustainability and/or the levels of the pensions they grant, but in both cases, very unpopular legal changes are required, so governments usually tend to postpone their implementation over time, until a critical situation develops.

• Given this reality, the only tool available to pension systems for addressing this negative situation is to encourage Voluntary Pension Savings (APV). FIAP therefore invited three experts to its 17th International Seminar. This Pensions Note addresses the main aspects highlighted by these experts.

• One aspect on which the three specialists agree, is the importance assigned to achieving significant VPS increases in the countries of the region. One of the conclusions reached is that there is currently a very significant proportion of the population that is not actively contributing to voluntary savings accounts, so it is essential to increase the scope of financial advice. While mechanisms such as digital tools or collective savings plans are being consolidated and the voluntary savings message is becoming simpler, making it understandable for ordinary people, it is urgent to inject more consultants – or a greater amount of advice – into the market.

To download this Pension Note, please click on this link.