• Crisis in the PAYGO systems worldwide. In Argentina, it is a cause for concern that contributions currently only cover 60% of the funds required for paying the pensions of the public PAYGO system, due to which 40% of the remaining funds must be financed with the State budget. In Brazil, it has been announced that without the approval of a pension reform that cuts spending, Social Security will cost the State approximately USD 11.331 billion more than in 2017. In Costa Rica, discussion of the reforms of the public PAYGO system have already begun, after a round table put forward a series of measures to ensure the sustainability of the Costa Rican Social Security Fund (CCSS) in December 2017. In Spain, the Treasury provided a loan of EUR 15 billion to Social Security (SS) for financing public pensions in 2018. The situation is critical, since there are only EUR 8 billion left in the SS’ Reserve Fund, the purchasing power of pensions has dropped by about 4 points since 2010, and pensions will continue to shrink in future due to the minimum revaluations provided by law.
• In Spain, conditions for retiring became stricter as of January 1; the last 21 years are now considered for calculating pensions (instead of the 20 years that were considered last year).
• In Argentina, a pension reform was approved in December 2017, that increases the optional retirement age from 65 to 70 for men, and from 60 to 63 for women, and calculates pensions with a less generous formula.
• In Mexico, new tools for increasing savings were launched. A new application “Miles for Retirement” was launched for facilitating voluntary savings in the AFORES, through spending on products and services such as movies, clothing, cigarettes, and alcoholic beverages. The regulator also announced pilot tests, which include text messaging reminders for savers and a voluntary savings campaign on Facebook.

Download the Progress of the Pension Systems in PDF here.