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FIAP > Boletín – Recientes > Progress of the Pension Systems No. 5 / August – September 2018

Progress of the Pension Systems No. 5 / August – September 2018

11 December, 2018
  • Crisis in the PAYGO systems worldwide. Alarms have sounded in Germany regarding the low level of pensions, since, according to a study, half of the workers currently between 55 and 64 years of age will not have the funds for maintaining a decent standard of living after retirement. In Brazil, the government foresees that social security will consume three times more resources in 2019 than health care, education and public safety together, due to which a pension reform is urgently required. In Spain it was announced that 14.5 million new jobs must be created to finance pensions until 2050, which will be impossible according to projections, so further adjustments and arrangements will be necessary as of 2019. In Mexico it was announced that pension expenditure tripled between 2008 and 2018, amounting to 3.7% of GDP, with an upward trend in future, due to the increase in the number of workers who will retire under the different PAYGO schemes. In Panama, the existing reserves of the disability, old age and death program will be exhausted by 2025, so alternatives for resolving the financial crisis of the Social Security Fund (CSS) must be found. In Peru, due to the precarious financial situation of the ONP, the agency that manages the PAYGO system, it was announced that the only option for returning the savings of those with less than 20 years of contributions (the requirement for obtaining a pension in the system), would be for it to become a public AFP.
  • Chile: The pension reform is 90% complete and will be submitted to congress in October. In the meantime, the government has assigned extreme urgency to a bill on the contributions of self-employed workers.
  • Russia: The Chamber of Deputies approved a pension reform that raises the retirement age from 60 to 65 for men, and from 55 to 60 for women. Now the bill must be passed by the Upper House.
  • Ukraine: There are currently two pension reform bills proposing the introduction of a mandatory individually funded pension savings pillar, that have not been legally discussed. The maximum contribution rate would be 7% or 15%, depending on the bill.

Download this version of the Progress of the Pension Systems in PDF here.

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