The 10th version of the FIAP-ASOFONDOS International Congress was successfully held last April 20 and 21, in Colombia.

Leading academics, representatives of the pension fund industry and regulatory authorities, met on this occasion to discuss the macroeconomic situation, trade integration, the management of the investment portfolios of the pension funds, demographic changes and population aging, labor informality, political polarization and future challenges for the development of Colombia.

FIAP’s President, Guillermo Arthur, opened the Congress by referring to the situation currently faced by the pension systems in the region. He pointed out that notwithstanding the existing diagnosis of the pension problem, the solutions proposed in several countries are unrelated, or move in a different direction, mostly due to ideological bias in the discussion. He also noted that, since the individually funded pension systems in the region are approaching maturity, their decumulation stage must be improved before pension payments massively increase.

Then, the Chairman of the Board of Directors of ASOFONDOS, Miguel Largacha, referred to recent developments in the pensions industry in Colombia, the benefits of the pension system based on individual savings, and the challenges that lie ahead. He insisted on the need for the Colombian pension reform to adequately address demographic and cultural changes, considering complementation between the PAYGO and individually funded systems, with a suitable labor reform to reduce labor informality, thus improving pension coverage.

The work sessions of the Congress then began. Outstanding among them was the positive diagnosis of the IDB regarding the economic growth prospects for the region in the coming years. According to the IDB, organized international trade coupled with political resolve, will be the commercial and economic solution for the development of Latin America.

Another one of the more interesting sessions addressed the imminent and rapid aging of the population in Colombia and the rest of Latin America, along with the fall in fertility rates, which pose tremendous social and economic challenges, making the public PAYGO systems unviable. According to Richard Jackson, an expert in old age and demographic changes and their impact on social security, the temptation for the PAYGO systems to absorb the individually funded systems in this situation, would be a terrible mistake. According to the expert, contribution rates must be increased and voluntary savings mechanisms must be stimulated in order to address the pension problem.

The Congress ended with a talk by Nouriel Roubini, professor of economics and international business, in which he pointed out that he does not envisage a global economic crisis, but growth will be less than expected. He estimated growth of 2.2% for Colombia in 2017, with an improvement in 2018. He recommended improving the infrastructure, increasing investment in human capital and reducing inequality, as key steps for accelerating growth.

The Presentations at the Conference will soon be available for downloading here.

The 10th version of the FIAP-ASOFONDOS International Congress was successfully held last April 20 and 21, in Colombia.

Leading academics, representatives of the pension fund industry and regulatory authorities, met on this occasion to discuss the macroeconomic situation, trade integration, the management of the investment portfolios of the pension funds, demographic changes and population aging, labor informality, political polarization and future challenges for the development of Colombia.

FIAP’s President, Guillermo Arthur, opened the Congress by referring to the situation currently faced by the pension systems in the region. He pointed out that notwithstanding the existing diagnosis of the pension problem, the solutions proposed in several countries are unrelated, or move in a different direction, mostly due to ideological bias in the discussion. He also noted that, since the individually funded pension systems in the region are approaching maturity, their decumulation stage must be improved before pension payments massively increase.

Then, the Chairman of the Board of Directors of ASOFONDOS, Miguel Largacha, referred to recent developments in the pensions industry in Colombia, the benefits of the pension system based on individual savings, and the challenges that lie ahead. He insisted on the need for the Colombian pension reform to adequately address demographic and cultural changes, considering complementation between the PAYGO and individually funded systems, with a suitable labor reform to reduce labor informality, thus improving pension coverage.

The work sessions of the Congress then began. Outstanding among them was the positive diagnosis of the IDB regarding the economic growth prospects for the region in the coming years. According to the IDB, organized international trade coupled with political resolve, will be the commercial and economic solution for the development of Latin America.

Another one of the more interesting sessions addressed the imminent and rapid aging of the population in Colombia and the rest of Latin America, along with the fall in fertility rates, which pose tremendous social and economic challenges, making the public PAYGO systems unviable. According to Richard Jackson, an expert in old age and demographic changes and their impact on social security, the temptation for the PAYGO systems to absorb the individually funded systems in this situation, would be a terrible mistake. According to the expert, contribution rates must be increased and voluntary savings mechanisms must be stimulated in order to address the pension problem.

The Congress ended with a talk by Nouriel Roubini, professor of economics and international business, in which he pointed out that he does not envisage a global economic crisis, but growth will be less than expected. He estimated growth of 2.2% for Colombia in 2017, with an improvement in 2018. He recommended improving the infrastructure, increasing investment in human capital and reducing inequality, as key steps for accelerating growth.

The Presentations at the Conference will soon be available for downloading here.