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Welfare Reform on the Web (June 2007): Pensions - overseas

The Chilean pension reform: 25 years later

M. Soto

Pensions, vol.12, 2007, p. 98-106

In 1980 the Chilean pension system was in crisis. It was paying out more in benefits than it was receiving in contributions, and the projected actuarial imbalance was more than the country’s gross domestic product. The solution was to replace the traditional pay-as-you-go structure with a system based on personal retirement accounts. This radical reform brought dynamism to the Chilean economy but the new system is not perfect. Coverage is far from universal; commissions, although declining, still eat into retirees’ accounts; and the number of workers expected to depend on the minimum pension guarantee or the assistance pension is a cause for concern.

A review of the National Social Security Fund in China

S. Leckie and N. Pan

Pensions, vol. 12, 2007, p. 88-97

China is confronted with a looming crisis in pension provision due to rapid population ageing. Many provincial pension funds face having insufficient income from contributions to fund benefit payouts. Central government responded by establishing the National Social Security Fund (NSSF) in 2000 to act as a strategic reserve to bail out provincial funds unable to meet their liabilities. This article provides an overview of the NSSF’s background, sources of assets and investment activities, including overseas investment initiatives.

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