The Chilean reform pioneered a shift in old-age security systems away from public pension schemes on the pay-as-you-go (PAYG) basis towards individual pension schemes on capital basis and found followers in the 1990s, mostly among other Latin American countries and in Central and Eastern Europe. However, nowhere was the change so embracing as in Chile. The early 21st century saw retreat from the pension funds created on mandatory basis. Also in Chile the 2008 crisis echoed with reforms of 2008 and 2015 under the socialist president, Michelle Bachelet, which extend the social safety net as well as re-introduce publicly-administered programmes. The change seems to be internationally meaningful, also for Poland being one of the follower-countries.
This article reviews the performance of the system up to the most recent reform and presents results of pension engineering in a systematic way in attempt to estimate the scope of change.
Bringing the state back into Chile ‘s pension system can be viewed as a plan to subsidise total retirement benefits in order to improve the distressing rates of replacement and, in such indirect way, to support the longevity of privately-managed pension funds.