Pensions at a Glance in Latin America and the Caribbean provides for the first time an ample range of indicators for comparing pension system design of 26 countries in Latin America and the Caribbean. The indicators are comparable with those of OECD countries and selected G20 members, published by the OECD.
The biggest pension policy challenge faced by most countries in Latin America and the Caribbean (LAC) today is low coverage of formal pension systems, both in terms of the proportion of workers participating in pension schemes and the proportion of the elderly receiving some kind of pension income.
Efforts to close the coverage gap, for example, through non-contributory pensions, are therefore at the heart of the pension policy debate in the region. However, these policies might pose significant fiscal challenges in the next decades as the population ages.
Chapter 2 presents three main indicators describing the demographic conditions relevant for pension policy, namely fertility rates, life expectancy and old-age support ratios. This is followed by a systematic comparison, in Chapter 3, of system designs across countries using the standard OECD Pensions at a Glance typology and presenting several key indicators of adequacy, including gender-specific gross and net replacement rates and pension wealth at different income levels. Finally, Chapter 4 provides the profiles of each pension system in Latin America and the Caribbean in terms of their architecture, rules and parameters.
Active coverage, i.e. contribution payments of workers to mandatory pension schemes, is low in LAC countries.
A key determinant of pension coverage in LAC is the type of employment.
A large share of older people in LAC will have to rely on other sources of income than contributory pensions
The role of social pensions in LAC is expanding and, in some countries, they are already a major element of the pension system.
In sum, a two-pronged approach will be needed in order to deal with the coverage gap.