Expert: LatAm pension models still problematic

The various private pension models in Latin America still have problems to solve and can not be copied in countries of other regions as easy solutions to demographic-related pension problems, pension consultant Vinicius Pinheiro at OECD's financial affairs division told BNamericas. The private pension systems in Latin America has had a positive impact on the development of local capital markets - especially in Chile - but several problems, such as high administrative costs at fund managers and low coverage (low degree of contributors), still persist in many countries, Pinheiro said. Some OECD countries in Europe such as Poland and Hungary have adopted pension models similar to the Chilean model but successful implementation in one country is no guarantee for success in other countries, he said. Pension reform toward more individual accumulation is a worldwide trend today as many countries are faced with ageing populations and falling birth rates. The Chilean model of complete pension system privatization have many times been cited as a solution to the demographic problem facing Europe and countries such as the US and Japan.