According to the reportChili It is the Latin American country with the best retirement system and is ninth globally, with a rating of 74.9 out of 100, while Argentina lagged behind and among the seven regional markets evaluated It is last with a score of 45.5, according to the Global Pension Index, published by Mercer and the CFA Institute.
Chile presents “an increase in the Index score of 5.0 due mainly to increases in both the target pension and net replacement rates, according to the OECD,” the document says.
According to Mercer and the CFA Institute, the Chilean retirement system “includes an almost universal social old-age pensiona privately managed mandatory capitalization system based on the contributions of workers with individual accounts managed by a small number of Pension Fund Administrators (AFP) and a framework of voluntary contributions.
After Chile, the best evaluated in Latin America were Uruguay (68.9) and Mexico (68.5), followed by Colombia (63), Brazil (55.8) and Peru (54.7).
The index evaluates 48 retirement systems, covering 65% of the world’s population, through three sub-indices: adequacy, sustainability and integrity.
According to the report, as governments and employers seek to reduce their future pension costs and reduce their riskretirement systems around the world, including those in Latin America, “are increasingly moving away from defined benefit (DB) plans and shifting to defined contribution (DC) arrangements.”
In Latin America, the sustainability subindex represents the greatest opportunity for improvement for most systems. “Globally, pensions that score highest in this area are demonstrating several key elements,” he noted. Tracy Teel, Interim Wealth Leader at Mercer Latin America and the Caribbean.
“They have a high percentage of the working-age population covered by the pension system; they have a significant pool of assets to finance future liabilities; and their labor force participation rates remain high even for people approaching retirement age (such as 55-64 years old). “Public policy makers who want to have a significant impact on the sustainability of their organization should focus on these areas.”
Which countries have the best retirement system
Outside of Latin America, The Netherlands occupies the highest total value of the index (84.8), followed closely by Iceland (83.4) and Denmark (81.6). The Index uses the weighted average of the adequacy, sustainability and integrity sub-indices. For each subindex, the systems with the highest values were the Netherlands for adequacy (86.3), Iceland for sustainability (84.3), and Finland for integrity (90.8).
Retirement systems worldwide have been pressured by increasing longevity, high interest rates and rising care costs, which influenced this year’s ratings.
After Chilithe best-placed country in Latin America is Mexico (score of 51%), which advanced from 40th place last year to 36th, standing out mainly in the quality of life subindex (64%), but points are subtracted from its overall rating for its health performance (37%).
Brazil It progressed from 43rd to 41st place (41% rating), surpassing only Turkey, Colombia and India, among the evaluated markets. The country has had its best scores in quality of life (64%) and retirement finances (56%), but is doing poorly in material well-being (16%). Among the markets evaluated in Latin America, next comes Colombia (score of 33%), which fell from 41st to 43rd place, with high marks in finances in retirement (61%), but poor performance in material well-being (6%).
Source: Ambito
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