Pension Reform and Macroeconomic Stability in Latin America

Author/Editor:

Jorge Roldos

Publication Date:

May 1, 2007

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper reviews macroeconomic aspects of pension reforms in Latin America, focusing on financial market stability and fiscal sustainability. Concentration of pension fund portfolios in government bonds remains high, and the lack of new investment alternatives has distorted asset prices. Countries have gradually liberalized investments abroad, but remain wary of the impact on foreign currency markets. The fiscal costs of the transition to funded systems have been higher than expected, and have contributed to high debt levels. The paper highlights the importance of coordinating changes in portfolio limits with debt management policies and measures to develop securities markets.

Series:

Working Paper No. 2007/108

Subject:

Pension reform Pension spending Pensions Public debt Sovereign bonds

English

Publication Date:

May 1, 2007

ISBN/ISSN:

9781451866728/1018-5941

Stock No:

WPIEA2007108

Pages:

32

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