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FIAP > Boletín – Recientes > Progress of the pension systems No. 2 – 2021 / February-March 2021
22 June, 2021

Progress of the pension systems No. 2 – 2021 / February-March 2021

In this edition of the Progress of the Pension Systems, we highlight the following:

  • Crisis in the PAYGO systems worldwide. Due to the pandemic, almost 23 thousand companies stopped contributing to the social security system in Argentina in 2020, and 1.13 million workers lost their jobs. In Costa Rica, the Office of the Comptroller General of the Republic estimated that social security contributions could drop by USD 29 million, compared to the 2020 fiscal year, given the unemployment and the economic crisis the country is facing. Moreover, in Ecuador, according to the Ecuadorian Social Security Institute, there were 256 thousand less contributors between February 2020 and February 2021, a drop of 8.6%. In Spain, the Covid-19 crisis complicated the delicate Social Security situation to the point that it recorded figures close to bankruptcy in 2020: its deficit was close to EUR 30,000 million, and was not higher only because the State injected an additional EUR 20,000 million.
  • Chile: The Chair of the Association of AFPs, Alejandra Cox, proposes advancing to a basic, universal pension (above the poverty line, of approx. USD 243, financed with general taxes), while allowing the optional withdrawal of all pension funds by contributors who have not saved an amount that will guarantee them a good pension.
  • The Philippines: On January 1, 2021, the government introduced a new mandatory, individually funded pension fund, with automatic enrolment, known as the Workers’ Investment and Savings Program (WISP), to complement the public PAYGO pension program.
  • Japan: A new law gives companies options for retaining older workers, including increasing the retirement age from the current 65 to 70 years of age. Companies and workers must agree on the option chosen.
  • Dominican Republic: At the request of the ADAFP, the National Social Security Council (CNSS) issued a resolution that makes the process of accessing survival pensions and returning balances as inheritance to family members, more efficient, eliminating the payment of the inheritance tax.

Download the complete Progress of the Pension Systems report, here.  

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