Pension pains: The 5 hurdles facing LatAm AFPs
Not all Latin America’s pension woes can be blamed on the AFP system, but there are key issues that are at the heart of the attacks from the public and politicians.
US think tank Brookings Institute examined the big challenges facing pensions in the region on the 25th anniversary of the sweeping reforms that led to the birth of AFPs, a system first created in Chile in the 1980s.
The report highlighted the unsustainability of defined benefit public pensions, as shown by the crippling fiscal deficit Brazil is struggling to solve. It also praised the role of the private AFP system in helping develop financial markets, but it pointed to the misalignment of incentives and to a short-term focus as key items to work on.
Read More: City Wire
