Retirement is one of the most awaited phases for one workersas after years of effort you will be able to reap the benefits Pension fund with money that he contributed during his working hours. This amount is usually administered and paid to contributors according to the age set by each country: for example, 67 years for the United States and 65 years for Peru.
With this in mind, the Mercer CFA Institute's Global Pension Index revealed the countries in its latest report for 2023 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
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The country in South America with the best pension system
The country with the best pension system is Chile with an overall score of 69.9, 70 for suitability, 71.3 for sustainability and 84 for integrity, the report said Mercer. This not only puts it in first place in the region, but also puts it in line with countries such as: Canada either Belgium.
Getting to know the situation of the pension system in chiliMercer analyzed its effectiveness in several countries and highlighted the increase in integrity levels, which rose from 78.9 to 84.0 points compared to 2022 results.
Chile's pension system is the best in Latin America. It is even comparable to some countries in Europe. Photo: Mercer
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According to Mercer, what recommendations are there to improve the pension system in Chile?
Among the recommendations the report proposes to improve the pension system are increasing the minimum support level for the poorest adults and the retirement age for women. On the other hand, it is proposed to include additional income for those who take care of children.
Chile's pension system has improved in the Mercer ranking. Photo: AFP
It is important to clarify this chili It was the first country in Latin America to introduce a pension system. This began in 1924 with the introduction of the pay-as-you-go system, a system administered by pension funds that determined the terms and insurance coverage of membership. However, this changed in 1980, when the AFP system either Individual capitalization system (Law 3,500). Unlike the previous one, this one is individual; This means that every employee pays for his or her pension.
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What does the old age pension look like in Peru?
Peru At the regional level it is in fifth place and in the global ranking it is in 34th place. The value fell slightly compared to the data from 2022 from 55.8 to 55.5. This represents a steady decline, as in 2018 there were 62.4.
The pension system in Peru is divided into two groups: the public defined benefit (DB) system, financed on a pay-as-you-go basis, and a defined contribution (DC) system, entirely financed and managed by the private sector.
Peru's pension system has seen a decline in recent years. Photo: Mercer
Pension ranking in Latin America
What measures is being taken in Chile to improve its pension system?
Although the pension system chili It is recognized worldwide that this requires important changes for many Chileans, which was one of the main demands during the social outbreak of 2019. Hence the president Gabriel Boricwho advocated reform, presented a draft that was approved by a majority of the Chamber of Deputies on January 24th, so that it is expected to be discussed in the Senate in March.
For many Chileans, the pension system needs important changes. Photo: AFP.
The key points of this project include increasing the universal guaranteed pension by up to 250,000 pesos (US$294), a government support for people aged 65 and over.
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What factors are taken into account when classifying Latin American pension systems?
To analyze and classify the 47 pension systems around the world, including those in Latin America, Mercer uses three sub-indices of the study. These are measured as follows:
appropriateness
- Advantages
- System design
- Save
- public assistance
- Home ownership
- Growth assets
sustainability
- Total assets
- Demographics
- Public spending
- National debt
- Economic growth
- pension insurance
integrity
- regulation
- guide
- data protection
- communication
- Ongoing costs
The best country to retire in 2024 is Latin America
According to the International Living study, it is the best country to live in until retirementCosta Rica. According to the study, in addition to its paradisiacal beaches and warm climate, this country has one of the few Blue Zones, places known for being home to the oldest people in the world.
People have lived in this country for more than 100 years. Photo: Pura Vida University
ForBekah BottoneInternational Living correspondent inCosta Rica, who moved after retirement, said that this country has hospitable and helpful citizens, which is why he recommended getting used to their language. “That’s how I first fell in love with this Central American country in 1997,” he said.