09/09/2019 - This booklet presents the main messages from the OECD review of pensions systems in Peru. The review assesses Peru’s pension system in its entirety, looking at both public and private, pay-as-you-go (PAYG) financed and funded pension provisions. http://www.oecd.org/pensions/oecd-review-pension-systems-peru.htm
Unemployment Insurance in Canada: proposals for reformMichel Rochette
A older public Policy research report on reforms to the Canadian Unemployment program as it used to be called/
Un rapport de recherche concernant un projet de réforme au programme d'assurance-chômage au Canada.
Learn how you can successfully navigate the Affordable Care Act, "Obama Care".
This easy to read outline will benefit your family and business.
Call (816-224-9466) for more information today.
With Jamaicans living 20-25 years beyond the retirement age and a low rate of retirement planning, financing retirement is becoming a looming issue. Is mandatory pensions savings the answer?
HISIM generates estimates of health insurance coverage and premiums for the U.S. population under age 65. CBO’s analysts use that model to develop baseline projections and to simulate the effects of proposed changes to policies involving health insurance coverage.
On June 19, two analysts will explain how HISIM is used to help estimate the cost of a proposal affecting health insurance coverage and how a new version of the model is being developed to enhance CBO’s analytic capabilities.
Presentation by Jessica Banthin, Deputy Assistant Director in CBO’s Health, Retirement, and Long-Term Analysis Division (HRLD), and Alexandra Minicozzi, Chief of HRLD’s Health Insurance Modeling Unit, at the Bipartisan Policy Center.
Facing an aging population, longer lifespans, and a shift to the defined contributions model, India is overhauling its pension system. But the New Pension System (NPS) faces stiff competition from Employees' Provident Fund (EPF) and other options.
Impact of Contributory Pension Scheme on Workers’ Savings and Investment in N...iosrjce
This paper analyses the impact of Contributory Pension Scheme on employee savings and investment
in Nigeria using Anambra State public workers as a case study. The paper uses cross – sectional primary data
sourced through a structured questionnaire administered on 387 respondents (i.e. those that have been in
service for the period of 5 years and on grade level 8. This choice is based on the fact that they will save
money than those in grade levels less than 8. The empirical analysis reveals that majority of the respondents
prefers to save outside any pension scheme implying that they are participating because it is compulsory. Again,
most of the respondents are not aware of their employers’ own contribution to their contributory pension
scheme. The study therefore concludes among others that the Nigerian government should create more
awareness and enlightement campaign on the workers’ contributory pension scheme geared towards
retirements
Unemployment Insurance in Canada: proposals for reformMichel Rochette
A older public Policy research report on reforms to the Canadian Unemployment program as it used to be called/
Un rapport de recherche concernant un projet de réforme au programme d'assurance-chômage au Canada.
Learn how you can successfully navigate the Affordable Care Act, "Obama Care".
This easy to read outline will benefit your family and business.
Call (816-224-9466) for more information today.
With Jamaicans living 20-25 years beyond the retirement age and a low rate of retirement planning, financing retirement is becoming a looming issue. Is mandatory pensions savings the answer?
HISIM generates estimates of health insurance coverage and premiums for the U.S. population under age 65. CBO’s analysts use that model to develop baseline projections and to simulate the effects of proposed changes to policies involving health insurance coverage.
On June 19, two analysts will explain how HISIM is used to help estimate the cost of a proposal affecting health insurance coverage and how a new version of the model is being developed to enhance CBO’s analytic capabilities.
Presentation by Jessica Banthin, Deputy Assistant Director in CBO’s Health, Retirement, and Long-Term Analysis Division (HRLD), and Alexandra Minicozzi, Chief of HRLD’s Health Insurance Modeling Unit, at the Bipartisan Policy Center.
Facing an aging population, longer lifespans, and a shift to the defined contributions model, India is overhauling its pension system. But the New Pension System (NPS) faces stiff competition from Employees' Provident Fund (EPF) and other options.
Impact of Contributory Pension Scheme on Workers’ Savings and Investment in N...iosrjce
This paper analyses the impact of Contributory Pension Scheme on employee savings and investment
in Nigeria using Anambra State public workers as a case study. The paper uses cross – sectional primary data
sourced through a structured questionnaire administered on 387 respondents (i.e. those that have been in
service for the period of 5 years and on grade level 8. This choice is based on the fact that they will save
money than those in grade levels less than 8. The empirical analysis reveals that majority of the respondents
prefers to save outside any pension scheme implying that they are participating because it is compulsory. Again,
most of the respondents are not aware of their employers’ own contribution to their contributory pension
scheme. The study therefore concludes among others that the Nigerian government should create more
awareness and enlightement campaign on the workers’ contributory pension scheme geared towards
retirements
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
Decentralizing Health Insurance in Nigeria: Legal Framework for State Health ...HFG Project
Presented during Day Three of the 2016 Nigeria Health Care Financing Training Workshop. Presented by Dr. Jonathan Eke. More: https://www.hfgproject.org/hcf-training-nigeria
PPI the uk-pensions-framework-showcase-slidesHenry Tapper
PPI - UK Pensions Framework
It's the Pension Policy Institute's's 20th birthday this year and it has marked that achievement with the creation of a new pension framework. This is how the PPI publicises it.
Purpose
The PPI’s UK Pensions Framework aims to support the development of the future of
pensions policy by allowing stakeholders a coordinated and holistic view of changes across
the system for the first time. The Framework also goes beyond a one-dimensional view of
changes by showing how policy reforms are affecting key parties, what secondary effects
may occur and where trade-offs might exist.
Measures - adequacy, sustainability and fairness
The framework analysis is structured around three interdependent objectives, each of
which is integral to the overall goal of the pension system - helping people to achieve
financial security in later life. They are adequacy, sustainability and fairness.
Design Principles
This publication sets out the design principles of the framework and the process by which
it was constructed. The process included consultation with over 70 key pensions policy
stakeholders. Next year, the PPI will publish the first edition of the UK Pensions
Framework, setting out full analysis of how the UK pension system is working to support
retirement outcomes that are adequate, sustainable and fair.
Use
From thereon, the framework will be a dynamic instrument, tracking changes each year
and simulating the effect of potential shifts or reforms on the system. The analysis will
provide policy-makers a comprehensive understanding of how each potential change might affect other elements of the system, and ultimately the experiences that people in the UK have in later life.”
There is a detailed report as to how their Pension Franework came into being which you can download from here.
I'm proud to have been one of 70 people who the PPI called on for input in this over 2021, I look forward to seeing it in use next year and will be relying on it for future blogs.
Happy 20th anniversary PPI!
ReadingsHealth Care Reform and Future PossibilitiesIntroduct.docxsodhi3
Readings
Health Care Reform and Future Possibilities
Introduction
Health care has undergone episodes of major change since the introduction of Medicare in the 1960s. All of these have resulted in fundamental changes in how health care providers were paid for services to Medicare patients and were swiftly followed by matching changes from independent insurance companies. The latest, and some might say the biggest, change since diagnosis-related groups (DRGs) were introduced in 1983 is the signing into law of the Patient Protection and Affordable Care Act (PPACA), on March 23, 2010. This law proposes to change the delivery of health care services by changing how providers are paid and what they are paid for. This module explores some of the key elements of PPACA and how health care providers are planning their changes in delivery processes and systems in response.
Major Elements of PPACA
The most significant elements of the PPACA legislation are scheduled to take place over several years. Congress still has the ability to modify some of these elements, so we will examine them with that in mind.
June 2010
Adults with pre-existing conditions were eligible to join a temporary high-risk insurance pool run by the federal government. This will be replaced by a health care exchange in 2014, which will provide access to insurance at affordable rates. Applicants must have a pre-existing health care condition and have been uninsured in the six months prior to application. Premiums will be set at rates for the general population rather than the high-risk premiums charged by insurance companies. Out-of-pocket costs will be limited to $5,950 for individuals and $11,900 for families.
July 2010
The government established the National Prevention, Health Promotion, and Public Health Council, with the Surgeon General to act as chair of the council. This council will oversee the implementation of many of the PPACA elements and will disseminate recommendations to the health care community at large in regard to best practices in prevention and health promotion. As of fall 2010, little had yet been heard from this entity. However, the National Committee on Quality Assurance, which is a private entity dedicated to improving the quality of health care services, is providing best practices and quality measures for health care providers, especially hospitals.
September 2010
Insurance companies can no longer apply lifetime dollar limits on essential benefits for patients. In addition, children may be covered under their parents' insurance plan until they turn 26 years of age. This includes children not living at home, not listed as dependents on their parents' tax returns, not students, and children who are married. Further, no patients under 19 years of age with pre-existing conditions can be excluded from health care benefits based on the pre-existing conditions, and there can be no deductibles or copayments required for provision of preventive care measures and medic ...
Journal of Economic Perspectives—Volume 19, Number 2—Spring 20.docxtawnyataylor528
Journal of Economic Perspectives—Volume 19, Number 2—Spring 2005—Pages 11–32
Saving Social Security
Peter A. Diamond and Peter R. Orszag
F or almost 70 years, Social Security has provided retirees with a basic level ofincome that is protected against inflation, financial market fluctuations andthe risk of outliving one’s assets. It protects against other risks as well, such
as disability or the death of a family wage earner. In addition, through its progres-
sive structure, Social Security provides some protection against one’s career not
turning out well. Social Security plays a critical role in providing financial security
during retirement: It provides the majority of income for two-thirds of elderly
beneficiaries, and all income for 20 percent of elderly beneficiaries.
Over the next 75 years, Social Security costs are projected to rise by about
2.5 percent of Gross Domestic Product (GDP), while revenues are projected to
decline slightly as a share of GDP. Social Security’s long-term financial health can
be restored through either minor adjustments or major surgery. In our view, major
surgery is neither warranted nor desirable—sustainable solvency and improved
social insurance can be accomplished by a progressive reform that combines
modest benefit reductions and revenue increases (as presented in more detail in
Diamond and Orszag, 2004).
We begin by describing some benefit improvements for vulnerable groups for
which there appears to be wide support, including from the President’s Commis-
sion to Strengthen Social Security (2001) appointed by President Bush. We then
discuss our proposed benefit and tax changes to close the underlying Social
Security deficit and finance these important social insurance improvements. We
also examine plans that replace part of Social Security with individual accounts,
explaining why, in our view, such a course would not represent sound policy.
y Peter A. Diamond is Institute Professor, Massachusetts Institute of Technology, Cambridge,
Massachusetts. Peter R. Orszag is the Joseph A. Pechman Senior Fellow in Economic Studies,
The Brookings Institution, Washington, D.C.
12 Journal of Economic Perspectives
Improving Social Insurance
We begin by focusing on a small number of particularly vulnerable beneficiary
types, following the lead of President Bush’s Commission to Strengthen Social
Security (2001) and others.1
First, workers with low lifetime earnings often live in poverty during retirement
despite Social Security’s progressive benefit formula. In 1993, taking into account
all sources of income, 9 percent of retired worker beneficiaries lived in poverty. Of
these poor retired worker beneficiaries, 10 percent had worked for 41 or more
years in employment covered by Social Security, and more than 40 percent had
worked between 20 and 40 years. In other words, many workers who have had
substantial connections to the work force throughout their careers nonetheless face
poverty in retirement. Our plan ...
DEPOT: A decentralized autonomous pensionPaul Mizel
Pension systems play a crucial role in the economic and political development of countries and help to maintain purchasing power for decades. Nevertheless, many people do not have access to good pension systems. That’s why we propose the development of a blockchain-based, decentralized and globally available pay-as-you-go pension system. We show how redistribution of contributions towards pension payments works and how voluntary participation in the pension system is incentivized through transparent, fair and unchangeable processes. Creating a premium for the last generation of the pay-as-you-go system ensures that all participants receive a pension and, in addition, creates an incentive to participate in the pension system.
CFO Strategies for Balancing Fee-for-Service and ValuePhytel
Moving from fee-for-service to value-based care is not easy. However, leading health systems are all following a similar blueprint that enables the move to value-based care.
Download this whitepaper to learn how:
- Bon Secours Richmond - Closed 75,801 gaps in care within 12 months, generating $7 million in revenue for chronic & preventive care, while improving quality.
- Northeast Georgia Medical Center - Decreased HbA1C levels across uncontrolled diabetes by an average of 1.6 points within 120 days.
- Riverside Medical Center - Reduced unnecessary readmissions by 40% by using automation to reach and assess patients post discharge.
- Prevea Health - Increased care management productivity by 150% by automatically identifying high risk patients, and automating patient engagement.
Within welfare systems, health care is the expenditure that poses the most urgent problems for long term sustainability. Without policy interventions and structural reforms, its physiological tendency towards increases over Gdp will inevitably require access restrictions and cutting off of demand for services.
This paper highlights the need to renew the current health care financing scheme. In the presence of ageing populations and rising incidences of health care expenditures over Gdp, this scheme cannot remain fully in charge of the working income of active people (pay-as-you-go), if we want to avoid depressive effects on employment, investments and productivity. Such effects, besides hampering economic growth, would have a negative impact on health care itself, with resources becoming more and more scarce with respect to needs.
The financing scheme must become multipillar, with pay-as-you-go complemented by a private channel based on the real capitalisation of contributions. This channel would be capable of allocating savings, supporting productive investments and generating resources to be dedicated to health care.
The best structuring and concrete functioning of the private pillar is less clear and under discussion. This position paper puts forward an operational proposal: the open capitalisation fund for welfare should offer both pension and health care provisions through real accumulation of contributions on individual accounts, and should be linked to collective insurance coverage against major risks and lack of self-sufficiency.
This tool presents numerous positive characteristics, compared to the public pay-as-you-go monopillar as well as to a multipillar system in which the private component consists exclusively or mainly of insurance contracts. In fact, it is necessary to restrict the recourse to pure insurance coverage only to a limited group of treatments, because this kind of coverage is not equipped to deal with the dynamics of future expenses. As the difficulties American insurance companies are experiencing demonstrate, the pure insurance coverage ends up with the recurrence, in the private area, of the same defects as the pay-as-you-go in the public health care systems. Insurance pooling is not but a pay-as-you-go scheme applied over the group of insured members.
An open and conclusive debate is necessary.
This presentation by Morris Kleiner (University of Minnesota), was made during the discussion “Competition and Regulation in Professions and Occupations” held at the Working Party No. 2 on Competition and Regulation on 10 June 2024. More papers and presentations on the topic can be found out at oe.cd/crps.
This presentation was uploaded with the author’s consent.
This presentation comprises highlights from the publication OECD Competition Trends 2024 published in Paris on 6 March 2024 during the OECD Competition Open Day. The full publication can be accessed at oe.cd/comp-trends.
This presentation by Cristina Camacho, Head of Cabinet and Head of International Relations, Portuguese Competition Authority, was made during the discussion “Use of Economic Evidence in Cartel Cases” held at the 22nd meeting of the OECD Global Forum on Competition on 8 December 2023. More papers and presentations on the topic can be found out at oe.cd/egci.
This presentation was uploaded with the author’s consent.
This presentation by William E. Kovacic, Global Competition Professor of Law and Policy and Director, Competition Law Center, The George Washington University, was made during the discussion “Ex-post Assessment of Merger Remedies” held at the 22nd meeting of the OECD Global Forum on Competition on 8 December 2023. More papers and presentations on the topic can be found out at oe.cd/eamr.
This presentation was uploaded with the author’s consent.
This presentation by John E. Kwoka, Neal F. Finnegan Distinguished Professor of Economics, Northeastern University, was made during the discussion “Ex-post Assessment of Merger Remedies” held at the 22nd meeting of the OECD Global Forum on Competition on 8 December 2023. More papers and presentations on the topic can be found out at oe.cd/eamr.
This presentation was uploaded with the author’s consent.
This presentation by Amelia Fletcher CBE, Professor of Competition Policy, University of East Anglia, was made during the discussion “Ex-post Assessment of Merger Remedies” held at the 22nd meeting of the OECD Global Forum on Competition on 8 December 2023. More papers and presentations on the topic can be found out at oe.cd/eamr.
This presentation was uploaded with the author’s consent.
This presentation by the OECD Secretariat was made during the discussion “Ex-post Assessment of Merger Remedies” held at the 22nd meeting of the OECD Global Forum on Competition on 8 December 2023. More papers and presentations on the topic can be found out at oe.cd/eamr.
This presentation was uploaded with the author’s consent.
This presentation by John Davies, Member, UK Competition Appeal Tribunal, was made during the discussion “Use of Economic Evidence in Cartel Cases” held at the 22nd meeting of the OECD Global Forum on Competition on 8 December 2023. More papers and presentations on the topic can be found out at oe.cd/egci.
This presentation was uploaded with the author’s consent.
This presentation by Simon Roberts, Professor, Centre for Competition, Regulation and Economic Development, University of Johannesburg, was made during the discussion “Use of Economic Evidence in Cartel Cases” held at the 22nd meeting of the OECD Global Forum on Competition on 8 December 2023. More papers and presentations on the topic can be found out at oe.cd/egci.
This presentation was uploaded with the author’s consent.
This presentation by Serbia was made during the discussion “Alternatives to Leniency Programmes” held at the 22nd meeting of the OECD Global Forum on Competition on 7 December 2023. More papers and presentations on the topic can be found out at oe.cd/atlp.
This presentation was uploaded with the author’s consent.
This presentation by Italy was made during the discussion “Alternatives to Leniency Programmes” held at the 22nd meeting of the OECD Global Forum on Competition on 7 December 2023. More papers and presentations on the topic can be found out at oe.cd/atlp.
This presentation was uploaded with the author’s consent.
This presentation by Daniel CRANE, Richard W. Pogue Professor of Law, University of Michigan, was made during the discussion “Out-of-Market Efficiencies in Competition Enforcement” held at the 141st meeting of the OECD Competition Committee on 6 December 2023. More papers and presentations on the topic can be found out at oe.cd/omee.
This presentation was uploaded with the author’s consent.
This presentation by John DAVIES, Member, Competition Appeal Tribunal UK, was made during the discussion “Out-of-Market Efficiencies in Competition Enforcement” held at the 141st meeting of the OECD Competition Committee on 6 December 2023. More papers and presentations on the topic can be found out at oe.cd/omee.
This presentation was uploaded with the author’s consent.
This presentation by Nancy ROSE, Head of the Department of Economics and Charles P. Kindleberger Professor of Applied Economics, Massachusetts Institute of Technology (MIT), was made during the discussion “Out-of-Market Efficiencies in Competition Enforcement” held at the 141st meeting of the OECD Competition Committee on 6 December 2023. More papers and presentations on the topic can be found out at oe.cd/omee.
This presentation was uploaded with the author’s consent.
This presentation by Nicole ROSENBOOM, Principal, Oxera Consulting LLP, was made during the discussion “Out-of-Market Efficiencies in Competition Enforcement” held at the 141st meeting of the OECD Competition Committee on 6 December 2023. More papers and presentations on the topic can be found out at oe.cd/omee.
This presentation was uploaded with the author’s consent.
This presentation by Anna TZANAKI, Lecturer in Law, University of Leeds, was made during the discussion “Serial Acquisitions and Industry Roll-ups” held at the 141st meeting of the OECD Competition Committee on 6 December 2023. More papers and presentations on the topic can be found out at oe.cd/sair.
This presentation was uploaded with the author’s consent.
This presentation by Sha'ista GOGA, Director, Acacia Economics, was made during the discussion “Serial Acquisitions and Industry Roll-ups” held at the 141st meeting of the OECD Competition Committee on 6 December 2023. More papers and presentations on the topic can be found out at oe.cd/sair.
This presentation was uploaded with the author’s consent.
This presentation by Ioannis KOKKORIS, Chair in Competition Law and Economics and Director, Centre for Commercial Law Studies, Queen Mary University of London, was made during the discussion “Serial Acquisitions and Industry Roll-ups” held at the 141st meeting of the OECD Competition Committee on 6 December 2023. More papers and presentations on the topic can be found out at oe.cd/sair.
This presentation was uploaded with the author’s consent.
This presentation by the OECD Secretariat was made during the discussion “Serial Acquisitions and Industry Roll-ups” held at the 141st meeting of the OECD Competition Committee on 6 December 2023. More papers and presentations on the topic can be found out at oe.cd/sair.
This presentation was uploaded with the author’s consent.
This presentation by Simonetta VEZZOSO, Associate Professor, Economics Department, University of Trento, was made during the discussion “Competition and Innovation - The Role of Innovation in Enforcement Cases” held at the 141st meeting of the OECD Competition Committee on 5 December 2023. More papers and presentations on the topic can be found out at oe.cd/rbci.
This presentation was uploaded with the author’s consent.
More from OECD Directorate for Financial and Enterprise Affairs (20)
Presentation by Jared Jageler, David Adler, Noelia Duchovny, and Evan Herrnstadt, analysts in CBO’s Microeconomic Studies and Health Analysis Divisions, at the Association of Environmental and Resource Economists Summer Conference.
Jennifer Schaus and Associates hosts a complimentary webinar series on The FAR in 2024. Join the webinars on Wednesdays and Fridays at noon, eastern.
Recordings are on YouTube and the company website.
https://www.youtube.com/@jenniferschaus/videos
A process server is a authorized person for delivering legal documents, such as summons, complaints, subpoenas, and other court papers, to peoples involved in legal proceedings.
ZGB - The Role of Generative AI in Government transformation.pdfSaeed Al Dhaheri
This keynote was presented during the the 7th edition of the UAE Hackathon 2024. It highlights the role of AI and Generative AI in addressing government transformation to achieve zero government bureaucracy
PPT Item # 9 - 2024 Street Maintenance Program(SMP) Amendment
OECD Review of Pension Systems in Peru - Highlights
1. OECD Reviews of Pension Systems
PERU
OECD Reviews of Pension Systems
PERU
This review assesses Peru’s pension system in its entirety, looking at both public and private, pay-as-you-go
(PAYG) financed and funded pension provisions. The review then provides policy options to help tackle old-age
poverty; establish a solid framework for the contributory pension system to meet its objectives; improve
the coverage and level of pensions; and optimise the design and improve the regulation of the funded private
pension component. A further goal of these proposals is to improve the Peruvian population’s trust that
the country’s pension system will be able to deliver secure retirement income in old age.
The review is the fifth in a series of country reviews of pension systems [Ireland (2014), Mexico (2016), Latvia
(2018), and Portugal (2019)]. These reviews provide countries with policy options that will help them improve
the functioning of their overall pension system. Tailored policy options are proposed based on the specificities
of the national pension system, and on international best practices regarding reforms, design and regulation
of pension systems.
ISBN 978-92-64-44783-7
Consult this publication on line at https://doi.org/10.1787/e80b4071-en.
This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and statistical databases.
Visit www.oecd-ilibrary.org for more information.
9HSTCQE*eehidh+
2019
OECDReviewsofPensionSystemsPERU
HIGHLIGHTS
2. IN THE REVIEW
The current Peruvian pension system
Tackling old-age poverty
Establishing a solid framework for the
contributory pension system
Improving the coverage and level of
pensions
Optimising the design of the private
pension system for the accumulation
phase
Optimising the design of the private
pension system for the pay-out phase
Trust and confidence in the pension
system
Recommendations for the Peruvian
pension system
The review is part of a series of country reviews of pension systems. These reviews provide
countries with policy options that will help them improve the functioning of their overall
pension system. They propose tailored policy options based on the specificities of the
national pension system, and on international best practices regarding reforms, design and
regulation. This review is the fifth in a series of country reviews of pension systems: Ireland,
2014; Mexico, 2016; Latvia, 2018 and Portugal, 2019.
3. The Peruvian Pension System has undergone many changes to improve its sustainability over
the last several decades. However, there are still significant issues to address to put the
Peruvian Pension System in a better position to achieve its objective of ensuring the financial
well-being of the elderly.
This booklet presents the main messages from the OECD Review of Pension Systems in Peru.
The review assesses Peru’s pension system in its entirety, looking at both public and private,
pay-as-you-go (PAYG) financed and funded pension provisions. It draws on international best
practices and the specificities of the Peruvian pension system to propose a set of policy options
to improve its functioning and ability to deliver adequate and secure retirement income.
The OECD Review of Pension Systems in Peru provides policy options to help tackle old-age
poverty; establish a solid framework for the contributory pension system to meet its objectives;
improve the coverage and level of pensions; and, optimise the design and improve the
regulation of the funded private pension component. These proposals also aim to improve trust
that the pension system and its institutions will work in the best interests of the population to
provide a secure retirement income.
The policy proposals in the review should be implemented as a package. All the components
work together to balance the different trade-offs. Implementing them separately, in a piecemeal
manner, will break the balance and could jeopardise the whole reform. Any reform of the pension
system needs to take a long-term vision that goes beyond short-term considerations.
Nevertheless, implementation could be gradual taking into account fiscal capacity, institutional
capability and labour market developments.
Key issues to address in the Peruvian pension system
4. Tackle old-age poverty by
establishing a non-
contributory pension that
provides a safety net for all
Peruvians in old age
Poverty rates have been declining in Peru, but it
remains a much larger problem in rural areas and
for the elderly in particular. The programme
Pensión 65, that provides a flat-rate benefit for the
elderly in extreme poverty, has largely been a
success, with 1 in 4 elderly Peruvians now
receiving benefits. Nevertheless, benefit levels
remain extremely low compared to the level of
safety-net benefits provided in OECD countries,
even when accounting for the difference in
economic development, and only people in
extreme poverty are eligible. Furthermore, the
benefit level has not been adjusted in nominal
terms and has therefore been declining in real
terms.
Increase benefit levels (currently around 9% of
average wages) and index them, at least, to
inflation to maintain purchasing power.
Run publicity campaigns to increase people’s
awareness of the programme and expand its
eligibility criteria to reach a larger population to
address more than extreme poverty.
With the expansion of coverage, Pensión 65
benefits may need to change from a flat-rate to
a top-up payment to be better integrated with
the minimum pension in the contributory
system.
Establish a solid framework
for the contributory pension
system to meet its objectives
The PAYG public and funded private pension
components currently operate in parallel,
competing against each other rather than building
on complementarity. Strict eligibility requirements
for the public system mean that individuals unable
to achieve twenty years of contributions will
receive no benefits from the public system.
Individuals switching to the private system will lose
access to minimum pension benefits.
Furthermore, a lack of coordination among public
institutions overseeing the whole pension system
has led to pensioners losing contributions.
The main recommendation is to retain the public
PAYG and the funded private pension to
complement each other, and require that
everyone contribute to and receive pensions from
both components. While the system could rely
primarily on either public or private provision,
combining both a mandatory public system and
individual capitalisation accounts would result in a
more robust pension system that is more resilient
to the many risks that can threaten the
sustainability and adequacy of retirement income.
In addition, retaining both systems would minimise
the implementation costs and smooth the
transition to the improved new system. The new
framework for the complementary public and
private pension provision needs to:
5. Adhere to the principles of
complementarity, accessibility, sustain-
ability, and equity.
Apply the new rules to all new contributions
to the system immediately after the reform
so as to limit the length of this transition
process and the related costs while
protecting past entitlements.
Adjust the public system benefit formula so
that the level of benefits that affiliates can
expect to receive is linked to the
contributions made to the system in order to
ensure financial sustainability. Introduce
automatic mechanisms to adjust the
parameters and benefit levels to the
macroeconomic and demographic realities,
both in accumulation by linking the accrual
of benefits with the macroeconomic
situation, and in pay-out by accounting for
the length of time that payments are
expected to be made.
Reduce the minimum number of years
required to contribute to the PAYG system
before being eligible for benefits to improve
the accessibility of the system and ensure
that most people who contribute to the
system can expect to receive benefits in
return.
Establish a minimum level of pension that
increases with the number of years of
contributions so that individuals can see
merit in continuing to contribute. Coordinate
the minimum pension benefit with the
increased safety-net Pensión 65.
Remove duplication of disability and
survivor pension benefits. Benefits may
continue to be provided by the public and
private system for their respective portion of
retirement benefits. For those in risky
occupations, competition between the
public and private sector should be
removed for SCTR insurance.
Create a centralised platform to collect
contributions and manage information
collection for both the public and the private
components of the pensions system, and
capitalise on the efficiency gains brought
with the existing AFPnet platform. This will
facilitate the access to timely and accurate
data on the pension system and make the
processes to share information more
flexible and adaptable to ad-hoc needs.
Improve the coverage of the
system and the level of
pensions
Coverage of the contributory pension system is
low by international standards, at around 55% of
the working age population. High levels of informal
employment, relatively low contributions, low
contribution densities, and the possibility of
withdrawing assets before the legal retirement age
explain the low levels of pension benefits. Over
70% of the workforce is in informal employment,
and individuals affiliated to the private system
contribute less than half of the years in which they
have an account. Currently, individuals can
withdraw 25% of their assets before retirement for
the purchase of a first home, and retire from the
age of 50/55 for females/males if eligible for early
retirement. These factors result in a replacement
rate that is around 35-40% of final salary in the
best case scenario, and only 15-20% in more
realistic scenario.
Subsidise the social security contributions of
low-income workers. This would reduce the
costs for informal workers - the majority of
whom have low income - to become formal.
Provide incentives workers to voluntarily save
for retirement, particularly informal workers. In
order to ensure that low-income individuals
benefit from these incentives, consider
implementing a flat subsidy or matching
contributions that are paid directly into the
affiliate’s account. Such incentives could be
linked to contribution density to encourage
more frequent contributions. These incentives
could also be implemented to encourage
additional contributions beyond the mandatory
level for formal workers.
Nudge individuals to save for retirement in
addition to the other measures by, for example,
introducing as well automatic enrolment and
using other insights from behavioural
economics such as simplification of the
processes and improved communication.
Consider reintroducing the requirement that
independent workers contribute to the system,
while allowing for a flexible contribution
schedule and innovative collection
mechanisms such as through utility bills.
6. Increase the mandatory contribution rate. This
increase could be gradual and linked to wage
increases to prevent an immediate reduction in
nominal wages. However, this implies that
during the transition period there will be people
with different contribution rates. Alternatively,
or in parallel, additional contributions could
come from the employer.
Limit the early withdrawal of assets from
pension accounts. Early withdrawals for the
purchase of a home could be limited to
voluntary contributions, but any matching
contributions or subsidies provided on these
contributions would need to be removed to
avoid adverse incentives to game the system.
Limit access to early retirement. First, eliminate
the gender gap in the early retirement age.
While the legal retirement age is the same for
both genders, there remains a difference of five
years for early retirement, which puts women at
a disadvantage in retirement given their lower
average wages and higher life expectancies.
Secondly, make the criteria for early retirement
more restrictive for those who are able to
continue working. Also, impose minimum
income requirements, and adjust benefits
downward in an actuarially fair manner to
reflect the longer expected time in retirement.
Optimise the design and
improve the regulation of the
private funded system
Recent measures such as the introduction of the
tender mechanism have generated cost
reductions and improved competition, but further
improvements are necessary to promote better
investment outcomes for individuals and to ensure
that their best interests are of paramount
importance.
Adapt the default investment strategy to
provide a more optimal lifecycle approach by
gradually de-risking the investment rather than
doing so immediately when individuals reach
the specified age. Furthermore, individuals
could be allowed to invest different sources of
pension savings into different funds and
providers in order to better diversify their risk
exposure according to their preferences.
Introduce independent investment benchmarks
to assess the performance of the AFPs and
improve comparability.
7. Introduce a performance-based fee structure,
where providers receive more fees if the funds
outperform the market, to better align the
incentives of the fund managers with the
interest of the affiliates. The independent
performance benchmarks could be relied upon
to this effect.
Align the fees charged on voluntary
contributions with those for mandatory
contributions. The fees charged for voluntary
contributions remain significantly higher than
those for mandatory contributions on average.
These high fees may act as a disincentive for
individuals, especially those in informal
occupations, to contribute voluntarily to the
pension system. It also means that individuals
who do decide to save more are getting much
less out of their additional savings than they
would otherwise.
Eliminate the minimum guaranteed return.
Alternative mechanisms exist to achieve the
objectives of the minimum return, namely
independent benchmarks to judge investment
performance and more direct targets around
investment volatility.
Improve and standardise the disclosure and
reporting of AFPs’ cost and fees to encourage
better cost control. The resulting transparency
can increase competitive pressure on
providers as affiliates can more easily compare
the fees they are paying and change providers
if they choose. In addition, more providers
themselves to better understand all the costs
they incur, allowing them to take action to
reduce these costs.
Limit how often individuals can change funds
and providers to prevent negative
consequences such as excessive marketing
expenditure or market instability related to
frequent switching.
Provide the centralised platform managing the
contributions and information collection with a
mandate to enforce the payment of
contributions. AFPs are currently responsible
for this, but they do not have the mechanisms
to carry out this responsibility effectively.
The option to take 95.5% of assets as a lump sum
at retirement has undermined the role of the
pension system to provide a regular stream of
income in retirement. Short of removing this
option, policy makers should implement measures
to encourage people to have a pension in
retirement. The options they have to take their
accumulated assets need to be aligned with the
pension system’s objective of ensuring people’s
financial well-being throughout their retirement.
Require a minimum level of income in
retirement to be able to take a lump sum. This
minimum could be met through a combination
of both the public and private components, and
set at a level such as the minimum pension for
the contributory system.
Maintain tax incentives and matching
contributions (when introduced) aimed at
encouraging saving for retirement only when
people buy into a regular stream of income at
retirement. People taking lump sums should be
able to take only their contributions and returns,
but not the incentives received.
Discourage taking a lump-sum through
incentives linked to health coverage. Those
retiring early should be required to pay a higher
contribution from their lump-sum to account for
the longer time to be covered by EsSalud or not
allowed to take a lump-sum at all.
Continue to simplify and standardise the pay-
out options. The alternative options for pay-
present a risk of confusion and choice
overload.
Ensure the continued security of benefits by
regularly reviewing assumptions (e.g. mortality
tables) and establishing a procedure to protect
annuitants in the case of insolvency of the
insurer.
Extend the deferral period for deferred
annuities to increase the amount of income that
the deferred annuity will provide. The current
annuity purchased with 50% of accumulated
assets and a deferral period of five years will
result in a significantly lower income than
pensioners could otherwise obtain.
8. Improve trust and confidence
in the pension system
There is a lack of trust in the pension system. The
population does not fully understand how the
pension system works and how contributing to the
system will benefit them financially in old age. In
addition, there is a perception that the public and
private institutions involved do not operate in
people’s best interest.
Promote knowledge of how the pension system
works. More Peruvians expect to rely on
Pensión 65 in retirement than the contributory
pension system, demonstrating a significant
lack of understanding of the benefits that the
system can provide. Education about the
pension system should be incorporated into the
financial literacy programmes in schools. For
adults, public awareness campaigns should be
used to educate the public and encourage
them to save into the system.
Improve confidence in the financial institutions
of the pension system by establishing a
centralised platform as the main point of
contact for affiliates. This would help to mitigate
the public’s perception of who is responsible for
errors, and minimise the opportunity for
procedural failures.
Ensure the effectiveness of the rules in place
requiring AFPs to avoid and/or manage the
potential conflicts of interest they may face.
Compensate individuals for any contributions
that have been misdirected.
Strengthen the independence and
enforcement power of the SBS to show the
public that the institutions operating within the
pension system are subject to the rules in place
and that failing to act in the best interests of the
people may carry risks.
Establish an independent committee of experts
that will be responsible for the implementation
of the reform in an objective in a gradual
manner. They should ensure that the pension
reform achieves its long-term view of creating
a sustainable pension system.
oecd.org/pensions