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Are Old-age Pension System Reforms Moving Away from Individual Retirement Accounts in Latin America?

Published online by Cambridge University Press:  13 January 2010

ESTEBAN CALVO ,
FABIO M. BERTRANOU  and
EVELINA BERTRANOU
ESTEBAN CALVO
Affiliation:
Harvard School of Public Health, 677 Huntington Ave, Boston, MA 02115, USA email: ecalvobr@hsph.harvard.edu.
FABIO M. BERTRANOU
Affiliation:
International Labor Organization
EVELINA BERTRANOU
Affiliation:
The Matrix Knowledge Group
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Abstract

This article reviews two rounds of pension reform in ten Latin American countries to determine whether they are moving away from individual retirement accounts (IRAs). Although the idea is provocative, we conclude that the notion of ‘moving away from IRAs’ is insufficient to characterise the new politics of pension reform. As opposed to the politics of enactment of IRAs of the late twentieth century, pension reform in Latin America in recent years has combined significant revival of public components in old-age income maintenance with improvement of IRAs. Clearly, the policy prescriptions that were most influential during the first round of reforms in Latin America have been re-evaluated. The World Bank and other organisations that promoted IRAs have recognised that pension reform should pay more attention to poverty reduction, coverage and equity, and to protect participants from market risks. The experience and challenges faced by countries that introduced IRAs, the changes in policies by international financing institutions, and the recent financial volatility and heavy losses experienced in financial markets may have tempered the enthusiasm of other countries from applying the same type of reforms. Scholars and policy-makers around the globe could benefit from looking closely at these changes in pension policy.

Type
Article
Information
Journal of Social Policy , Volume 39 , Issue 2 , April 2010 , pp. 223 - 234
Copyright
Copyright © Cambridge University Press 2010

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