Research Presented at the Global Pensions Program & the Colloquium on Pensions and Retirement Research

Last week, Olga Fuentes, from the Pension Regulator in Chile, twice presented to global audiences our pension reform proposal that would introduce longevity risk sharing pools in Chile. The proposal is documented in a paper coauthored by Dr. Fuentes, Richard Fullmer, and Manuel Garcia Huitron.

The first presentation was to the Global Pensions Program, organized by the Interamerican Development Bank (IDB), Novaster, and the London School of Economics (LSE). The second was to the 2021 Colloquium on Pensions and Retirement Research, organized by Centre of Excellence in Population Aging Research (CEPAR).

The paper simulates several possible designs, including stand-alone traditional or deferred arrangements and combinations with existing pay-out products in Chile. It also compares the results with other reform proposals in Chile. Interestingly, the explored designs do not distort the Chilean annuity market. It, therefore, shows that these two products can be supplementary if annuity markets exist, like Chile, or enable efficient longevity risk sharing in places with thin or nonexistent annuity markets.

Dr. Fuentes' presentation (in English) to the 29th Colloquium on Pensions and Retirement Research is shown below starting at about minute 44: