The Changing Face of Pensions in Latin America: Design and Prospects of Individual Capitalization Pension Plans

This paper discusses the spread of individual capitalization pension plans in Latin America in the 1990s. Following the example of Chile in 1980, Argentina, Colombia, Costa Rica, Mexico and Peru have all introduced individual capitalization pension schemes in the 1990s. The paper discusses the rationale for the reforms and compares the main design features of the reformed pension systems in these countries. Lastly, the likely success of pension reform is discussed by focusing on issues of pension scheme coverage, benefit adequacy and administrative costs.