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FIAP > FIAP Newsletter > Seminar “Financing Pensions: Fully-Funded systems versus Pay-As-You-Go”
14 July, 2015

Seminar “Financing Pensions: Fully-Funded systems versus Pay-As-You-Go”

The presentations of Daniel Artana and Salvador Valdés, performed in the Seminar “Financing of Pensions: Individual Funding vs. the PAYGO System”, are available in our web page. This meeting was organized by the Latin American Center for Economic and Social Policies of the Catholic University of Chile (Clapes UC).

The Argentine economist Daniel Artana, in his presentation explained how the 2008 reform in Argentina kept the individually-funded system, but switched ownership of the pension funds from their genuine owners, the workers, to the State.

He showed evidence that from that date (2008), there was a deterioration in financial management, which has reduced the return of the funds far below what has been achieved by the privately managed and regulated fund managers in eight (8) other countries in Latin America.

The seminar closed with the presentation by the economist Salvador Valdés, Microeconomics Coordinator of Clapes UC, who said: “Creating or expanding the PAYGO system in Chile over the next 10 years would increase inequality“. He added that the introduction of a system deviating part of the contributions from the individually-funded system to a new PAYGO system, would guarantee a fiscal crisis in the year 2040 and an immediate macroeconomic crisis, due to reduced financing for housing, reduced credit for companies and an immediate appreciation of the Chilean peso.”


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