Pension Reform and Macroeconomic Stability in Latin America
IMF Working Papers, May 1, 2007
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- Pension Reform and Macroeconomic Stability in Latin America
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Bibliographic details
- Authors: Jorge Roldos
- Published: May 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451866728.001
Summary and scope
- Reviews macroeconomic aspects of pension reforms in Latin America with focus on financial market stability and fiscal sustainability.
- Emphasizes coordination between pension portfolio regulations, debt management policies, and development of securities markets.
Key findings
- Concentration of pension fund portfolios in government bonds remains high.
- 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.
Policy implications and recommendations
- Coordinate changes in portfolio limits with debt management policies.
- Implement measures to develop domestic securities markets to broaden investment alternatives for pension funds.
- Consider the foreign-currency market impact when liberalizing foreign investments.