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FIAP > FIAP Newsletter > Progress of the Pension Systems June – July 2016 No. 3

Progress of the Pension Systems June – July 2016 No. 3

17 August, 2016

NEWS HIGHLIGHTS IN THIS ISSUE:

Pacific Alliance: The Ministers of Finance of the Pacific Alliance recognized the progress made to ensure the mutual recognition of issuers and the extension of financial instruments and negotiating mechanisms within the Latin American Integrated Market (MILA); they valued the progress made in streamlining the tax treatment of income obtained by the recognized pension funds of the countries of the Pacific Alliance when they invest in member countries in the region, and called for an assessment of mechanisms that would enable strengthening the investments of the AFPs in the region.

Chile: The Chamber of Deputies approved a bill of law that would allow the AFPs and insurance companies to invest in infrastructure projects; the bill must still be reviewed by the Senate; the proposal would allow the AFPs to invest resources in areas that have been restricted until now (for example, specialized funds or directly in office buildings or commercial premises), and also acquire the invoices of SMEs (commonly known as factoring), a system that enables small and medium-sized enterprises to obtain financing for their development.

Colombia: As of October 2016, members who wish to switch pension regimes must receive personal counseling. Members who wish to switch from a Defined-Benefit Average Premium Plan (RPMPD) fund manager, such as Colpensiones, to the Individual Savings with Solidarity System (RAIS), managed by the private pension funds, or vice versa, must receive personalized counseling from both agencies as a necessary condition for justifying the switch.

Mexico: The pilot account statement tests for encouraging greater voluntary savings has begun. The new account statement, initially sent to 120,000 people, contains graphic, attractive and simple stimuli (based on an Ideas42 economic-behavioral approach, a company specializing in behavioral economics); among other things, the account statements presents: (i) a traffic light to graphically represent savings “health”; (ii) the personal monthly income estimate on retirement, based on current savings habits; and (iii) messages focusing on the benefits of starting to save today and not waiting until tomorrow, evoking a sense of urgency.

Peru: The new government will appoint a committee for reforming the pension system. Authorities have said that the reform of the pension system will be carried out in a consensual manner, through the appointment of a multi-party committee, similar to the model applied in Chile, with experts analyzing the best proposals for the comprehensive reform of the pension system..

FIAP Newsletter No. 22

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