2024-02-13 12:06:30
Pensions in South America are a topic under constant debate between the different governments in the region. Photo: composition LR/Vecteezy /Hoy.es
Retirement is one of the most anticipated stages for a workersince after years of much effort you will be able to take advantage of the pension fund with money that he contributed during his work period. This amount is usually administered and paid to contributors according to the ages established by each country: for example, 67 years for the United States and 65 for Peru.
In this sense, Mercer CFA Institute Global Pension Index revealed, in its latest 2023 report, which are the countries of South America with better and worse pension systemtaking into account factors such as suitability, sustainability and integrity.
Mercer classified the retirements in South America. Photo: The Republic
Which country in South America has the best pension system?
The country that has the best pension system is Chile, with an overall score of 69.9, 70 in suitability, 71.3 in sustainability and 84 in integrity, according to the report Mercer. In this way, it is not only ranked first in the region, but also rubs shoulders with countries such as Canada o Belgium.
To know the situation of the pension system in ChileMercer analyzed its effectiveness in several countries, highlighting its growth in integrity levels, which increased from 78.9 to 84.0 points compared to the 2022 results.
Chile’s pension system is the best in Latin America. It is even comparable to some countries in Europe. Photo: Mercer
What are the recommendations to improve the pension system in Chile, according to Mercer?
Some of the recommendations that the report suggests to improve the pension system is to increase the minimum level of support for the poorest adults, as well as the retirement age for women. On the other hand, it is proposed to include an extra income for those who take care of children.
What are retirement pensions like in Peru?
Peru It is in fifth position at the regional level and in 34th place in the global ranking. The value decreased slightly compared to the data obtained in 2022, from 55.8 to 55.5. This represents a constant reduction, since in 2018 it was 62.4.
The pension system in Peru is divided into two groups: the public defined benefit (DB) system, pay-as-you-go, and a defined contribution (DC) system, fully financed and administered by the private sector.
Peru’s pension system has reflected a decline in recent years. Photo: Mercer
Pension ranking in Latin America
What measures are being taken in Chile to improve its pension system?
Although the pension system Chile is recognized worldwide, for many Chileans this requires important changes, which was one of the main demands during the social outbreak of 2019. Therefore, the president Gabriel Boricwho committed to seeking a reform, sent a project, which was approved by a majority on January 24 by the Chamber of Deputies, so it is expected to be discussed by the Senate in March.
Among the most important points of this project is the increase of up to 250 thousand pesos (US$294) of the Universal Guaranteed Pension, support provided by the State to people aged 65 or over.
What factors are taken into account to classify Latin American pension systems?
To analyze and classify the 47 pension systems around the world, including those in Latin America, Mercer takes three study subindexes. These are measured as follows:
Adjustment
- Benefits
- System design
- Saving
- public aid
- Home ownership
- Growth assets
Sustainability
- Total assets
- Demography
- Public spending
- Public debt
- Economic growth
- Pension coverage
Integrity
- Regulation
- Governance
- Data Protection
- Communication
- Running costs
The best country to retire in 2024 is in Latin America
According to the International Living study, the best country to live in until retirement is Costa Rica. According to the study, in addition to its paradisiacal beaches and warm climate, this nation has one of the few Blue Zones, places known for housing the oldest people in the world.
For Bekah BottoneInternational Living correspondent in Costa Rica, who moved after retiring, this nation has welcoming and helpful citizens, so he recommended adapting to their language. “That’s how I first fell in love with this Central American country in 1997,” she said.
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