Private and public pension systems compared: an evaluation of the Latin American experience

Abstract

This article briefly explains the main features of public and private pension systems, as well as structural and parametric pension reforms. Its core compares performance, within Latin America, between private pension systems in ten countries and public pension systems in eight countries, based on nine indicators: labor force coverage, ages of retirement and pension levels, gender equality, administrative costs, wage contributions, compliance, portfolio diversification in investment of pension funds, rates of returns of investment, and financial equilibrium. Contrary to what is often maintained, the article concludes that public systems perform better than private ones in most of those indicators.