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Influenced by the system created in Chile in the 1980s, a large part of Latin America already adopts in its social security program capitalization – a model that the government Jair Bolsonaro wants to implement in the country and in which each worker has an individual account to save his retirement. The main exceptions are Brazil, Argentina, Paraguay and Venezuela. The difference between Chile and the rest of the world is that, as a result of Chile's problematic experience, most countries have adopted the model as one. of its pillars of the pension system. The hybrid model, which is prevalent in the world today, is generally based on a pillar of social protection (set aside by the government and for which it is not necessary to have contributed to benefit from the benefit), a distribution system (current Brazilian system, where current employees pay their retirement among the inactive) and a capitalization.
England, New Zealand, Hungary and Poland, among others, have a compulsory capitalization component in their hybrid systems. In Latin America, Peru, El Salvador and the Dominican Republic, capitalization is also compulsory. In Colombia, workers can choose the system
In some countries, capitalization functions as a compulsory supplementary pension. To encourage workers to save on their own accounts, governments have set a low ceiling for the distribution pillar, which also helps to reduce the country's social security deficits. The capitalization of social security should apply only to those who earn more than
In Denmark, for example, the distribution ceiling is about US $ 1,000, says Felipe Bruno, head of the social protection sector of the Mercer consultancy in Brazil.
According to a Mercer study, Denmark now has the second largest social security system in the world behind the Netherlands – the two models are similar and adopt the three pillars. In the consultation methodology, the systems of the two countries received a score of 80 on a scale of 0 to 100. Brazil has 56.5 points, which places it in 21st place out of 34 countries. Considering only the adequacy of the sub-indicators (which evaluates the social benefits), Brazil climbs to the 7th place;
"The lowest scores generally come from countries where there are demographic problems and where the value of pensions approaches the worker's last salary," says Bruno
A study by the Inter-American Development Bank shows that Brazilians retiring based on age usually receive 80% of their salary and those who retire according to their contribution time, 52%. The Latin American average of pay-as-you-go systems is 65%
When the country is broken, the transition is more difficult
The implementation of the pillar of capitalization in a pension system is often more difficult when the The country's fiscal situation is delicate, as the Brazilian case.
According to experts, the transition is also more complicated when the contribution rate of workers and companies is already high. The difficulty comes from the need to increase the contribution in order to finance the transition. In countries where there is no room for rate increases, the government must generally reduce the benefits of the old system.
In some Eastern European countries that attempted to include the capitalization pillar, the transition was halted in the 2008 crisis because of these barriers. In Brazil, the rates that weigh on the worker vary from 8% to 11%. The Chilean Experience
A pioneer in pension financing, Chile became a target of criticism when the first generation of workers of this model began to retire in the 2000s. [19659002] With a large number of informal workers who have never saved their pensions, Chile has thousands of elderly people with no source of income. The problem has led the government of Michelle Bachelet to create a pillar of solidarity in 2008, which guarantees a minimum income, even to those who have never contributed. Once this problem is solved, the country now faces another problem: the low value of retiree benefits.
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According to a survey by the Inter-American Development Bank (IDB), Chileans who retire receive the equivalent of 38% of their salary when they were in activity. In Brazil, the percentage is 80% for people who retire, depending on their age.
In addition to the increase in life expectancy, problems related to the administration of pensions explain the current problem of social security. The economist Flávio Ataliba, who has contributed to the development of the hybrid proposal of former candidate Ciro Gomes, explains that the financial investments made by pension managers in Chile have been widely dispersed. In the face of low yields, the management fees billed by these managers began to weigh more, sometimes reaching 20%.
The economist Paulo Tafner – who elaborated a proposal for a hybrid system for Brazil, President of the Central Bank, Arminio Fraga – stresses that the concentration on the market of pension administrators has also undermined the Chilean system, in to the extent that it allowed higher rates of administration. "It is a problem of economic regulation.For this reason, we propose to create a public administration in order to lower rates and create competition."
The economist also notes that the system of Chilean capitalization was an innovative experience, although many highlight only the bad aspects. "It is necessary to remember that, despite the many problems, the country has only begun to develop sustainably that after the adoption of the reform."
In an attempt to resolve the current deadlock in social security in Chile, the center-right government of Sebastián Piñera is proposing to Congress that companies come to collaborate on retirements. Today, only the worker is responsible for contributing, with 10% of his salary. Piñera's proposal is that employers receive an additional 4%.
Following in Chile's footsteps, Mexico will soon be facing problems of low pensions. The country has adopted a model similar to that of Chile, with a capitalization of nearly 100%, but lower contribution rates than those of South America, in addition to high administrative rates.
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