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Chile's private pension system at 35: impact and lessons

Published online by Cambridge University Press:  09 March 2020

Silvia Borzutzky  and
Mark Hyde
Silvia Borzutzky*
Affiliation:
Department of Political Science and International Relations, Heinz College, Carnegie Mellon University, Pittsburgh, PA, USA
Mark Hyde
Affiliation:
Department of Work and Pensions, Plymouth University, Plymouth, UK
*
*Corresponding author. Email: [email protected]
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Abstract

This paper provides an analysis of Chile's 35 year experience with defined contribution, fully funded pensions and argues that this pension approach should not be emulated by countries seeking to reduce the state role in the provision of pensions. The paper shows that 35 years of privatized pensions have led to a massive accumulation and concentration of capital and profits in the hands of the pension fund administrators and insufficient and unequal pensions for the retirees. This legacy of the Pinochet dictatorship has experienced marginal reforms after the transition to democracy. However, those reforms have not altered the system's structure and have augmented the fiscal role as the state attempts to repair some the most damaging outcomes of the private pension scheme.

Keywords

chileLatin Americasocial securityprivatization of pensionsretirement incomefully fundeddefined contributions pensionssocial policy
Type
Articles
Information
Journal of International and Comparative Social Policy , Volume 32 , Issue 1 , February 2016 , pp. 57 - 73
Copyright
Copyright © 2016 Taylor & Francis

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