South American countries with the best pension systems: where are Chile and Peru? , Mercer | CFA Institute | Retirement AFP | Colombia World

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 South American countries with the best pension systems: where are Chile and Peru?  ,  Mercer |  CFA Institute |  Retirement  AFP |  Colombia  World

Retirement is one of the most anticipated stages for an employee, because after years of great effort they will be able to take advantage of their time off. pension fund, the money he contributed during his working period. This amount is typically administered and paid to contributors according to the age established by each country: for example, age 67 for the United States and age 65 for the United States. peru,

In this sense, the Mercer CFA Institute Global Pension Index revealed in its latest 2023 report which are the best and worst-off South American countries pension system, taking into account factors such as suitability, consistency and integrity. What situation are countries like Peru and Chile in?

Which country in South America has the best pension system?

According to the report of mercer, country of South America The country with the best pension system is Chile, with an overall score of 69.9, 70 for suitability, 71.3 for stability and 84 for integrity. In this way, it not only ranks first in the region but also walks shoulder to shoulder with countries like Canada hey belgium,

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Know the status of pension system in chile Mercer’s analysis of how effective this country’s pension system is, highlighted an increase in its integrity level, which increased from 78.9 to 84.0 points compared to the 2022 results.

Chile’s pension system is one of the best in Latin America. This can also be compared with some countries in Europe. Photo: Mercer

Some of the recommendations suggested in the report to reform the pension system are raising the minimum level of support for the poorest adults as well as raising the retirement age for women. On the other hand, it is proposed to include additional income for those looking after children.

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It is important to specify chile It was the first country in Latin America to establish a pension system. It began in 1924, when it implemented the pay-as-you-go modality, a system administered by a pension fund, which established membership terms and coverage. However, this changed in 1980, when AFP system hey individual capitalization system (Law 3,500). Unlike the previous ones, this one is personal; That is, every employee pays his pension.

What are pensions like in Peru?

Peru It is ranked fifth at the regional level and 34th in the global ranking. Compared to the data obtained in 2022, the value decreased slightly from 55.8 to 55.5. This shows a steady decline, as it was 62.4 in 2018.

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The pension system in Peru is divided into two groups: a public defined benefit (DB) system, pay-as-you-go, and a defined contribution (DC) system, entirely financed and administered by the private sector.

Pension ranking in Latin America

  1. chile
  2. uruguay
  3. Colombia
  4. brazil
  5. peru
  6. Mexico
  7. argentina

What factors are taken into account to classify Latin American pension systems?

To analyze and classify 47 pension systems around the world, including Latin America, Mercer takes three studied subindices. These are measured as follows:

Adjustment

  • benefits
  • system design
  • being saved
  • public assistance
  • home ownership
  • development property

Sustainability

  • Total assets
  • Demography
  • public spending
  • public debt
  • Economic Development
  • pension coverage

Integrity

  • regulation
  • Government
  • data security
  • Communications
  • running costs

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