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FIAP > Boletín – Recientes > Progress of the Pension Systems No.4 / October 2023
22 November, 2023

Progress of the Pension Systems No.4 / October 2023

In this edition of the report, we highlight:

  • Crisis in public PAYGO systems: In Argentina, the head of the IMF urged the country to curtail salary and pension expenditure and increase rates, as part of the agreement for the agency’s disbursement of USD 7.5 billion, after the approval of the facility agreement. In Ecuador, the government asked an independent citizens’ commission for a proposal to reform the PAYGO pension system, revealing the critical state of the system; the commissioned document proposes some changes, such as an increase in the number of years of contribution for accessing a pension. And in Spain, according to the Central Bank, an analysis of the aging of the demographic pyramid and its direct effect on the labor market and the public PAYGO pension system reveals that the population aging process is one of the greatest structural challenges facing the economy (2.4 workers currently contribute per pensioner, and that ratio will be only 1.7 by 2050).


  • Australia: Changes were made in the pension programs, affecting both the Age Pension (non-contributory pension) and the Superannuation (individual savings system). These changes include an increase in the age of eligibility for the Age Pension, from 66 years and 6 months to 67 years, and adjustments in income requirements for retirees. The minimum employer contribution rate in the Superannuation was also increased from 10.5% to 11%.


  • Bangladesh: In August, the government launched the Universal Pension Plan (UPS), a voluntary, contributory, individual savings pension program for citizens who do not work in the public sector, which was created in January with the aim of improving the coverage of the population.


  • Chile: The Association of AFPs and other relevant actors organized a working group to discuss informality in employment, aiming to produce a document with concrete public policy proposals to address this scourge. The Association of AFPs also presented its report “Hoja de Ruta 555” (“555 Roadmap”), as a contribution to the pension debate, setting out the 5 principles of a pension system, 5 recommendations based on international experience, and 5 improvements for strengthening the existing system.


  • Peru: The Ministry of Economy and Finance proposed a pension reform that prohibits exceptional withdrawals of AFP funds.

Relevant reports:

  • Pivotes published a document revealing the main dilemmas of the Chilean pension system (not addressed by current government proposals), emphasizing that the remedy to these problems is economic growth.
  • The ISSA published a report on the diagnosis of social security in the Americas. The main trends of the pension reforms proposed in the text, include measures such as introducing social pensions or increasing their value, extending coverage or improving accessibility, and improving the sustainability of social insurance pensions, among others.


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