Chile’s Solidarity Pillar : A Benchmark for Adjoining Zero Pillar with DC Schemes
In 2008, Chile introduced a New Solidarity Pillar (NSP) designed to eliminate the incidence of poverty among elderly adults by setting a floor at around forty percent of the minimum monthly income for the poorest sixty percent of the population. Th...
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/598991556882045322/Chile-s-Solidarity-Pillar-A-Benchmark-for-Adjoining-Zero-Pillar-with-DC-Schemes http://hdl.handle.net/10986/31638 |
| Summary: | In 2008, Chile introduced a New
Solidarity Pillar (NSP) designed to eliminate the incidence
of poverty among elderly adults by setting a floor at around
forty percent of the minimum monthly income for the poorest
sixty percent of the population. This paper describes the
NSP’s main characteristics and the main results achieved
during its first seven years of operations: coverage, fiscal
cost, poverty reduction, and the system’s role in reducing
the significant gender gap in pensions. Its effects on
incentives to contribute are discussed, as well as the
literature that has attempted to measure these effects.
Finally, the main challenges facing the NSP and the
implications for other countries under defined contribution
pension schemes are summarized. |
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