PENSIONS AT A GLANCE: LATIN AMERICA AND THE CARIBBEAN (OECD/IDB/THE WORLD BANK)

Recíprocamente informs that the IDB, the OECD and the World Bank recently published a new report on pensions in Latin America. We selected some elements of this text that seems particularly relevant :

“The biggest pension policy challenge faced by most countries in Latin America and the Caribbean (LAC) today is low coverage of formal pension systems, both in terms of the proportion of workers participating in pension schemes and the proportion of the elderly receiving some kind of pension income. Efforts to close the coverage gap, for example, through non-contributory pensions, are therefore at the heart of the pension policy debate in the region”.

“Active coverage, i.e. contribution payments of workers to mandatory pension schemes, is low in LAC countries. On average in the region, only 45 in 100 workers are contributing to or affiliated with a pension scheme, a share that has not changed much in the last decades, despite significant structural pension reforms”.

“A key determinant of pension coverage in LAC is the type of employment. On average, 64 out of 100 salaried workers contribute to a pension scheme in LAC compared to only 17 out of 100 self-employed workers”.

“A large share of older people in LAC will have to rely on other sources of income than contributory pensions, such as work income, assets such as housing, transfers, social pensions and informal family support”.

“The role of social pensions in LAC is expanding and, in some countries, they are already a major element of the pension system”.

“In sum, a two-pronged approach will be needed in order to deal with the coverage gap. It is important to increase formal labour market participation, especially for women, so that people can build future pension entitlements in their own right. To the extent possible, workers should be integrated into the contributory systems to boost pension savings and ensure pension adequacy. At the same time, the role for non-contributory (social) pensions is increasing throughout the region and can be a powerful tool for improving the economic well-being of the elderly”.

Download full report from World Bank