Dayoub, MariamLasagabaster, Esperanza2012-06-042012-06-042008-09https://hdl.handle.net/10986/6972Following Chile's pension reform in 1981, a wave of multi-pillar pension reforms took place in Latin America (LAC). Their implementation has revealed new policy challenges. To shed light on these issues, this paper reviews the structure and performance of mandatory DC pillars in LAC. The review highlights three important points. First, it suggests overall positive outcomes from reforms in the LAC countries that implemented multi-pillar pension systems. There is, however, scope for increasing efficiency. Second, management fees have declined but remain relatively high whereas decreases in operational costs have only been partially passed through to consumers reflecting inadequate competition. Limits on transfers and related measures have been ineffective in curtailing management fees but created new barriers to entry. In recent years, a few countries in LAC introduced or are in the process of introducing a combination of new measures that focus more directly on the two root causes of inadequate competition - the inelasticity of demand to fees and selective elimination of barriers to entry by facilitating unbundling of services. These new measures show some promise. Third, the paper's review indicates that a greater diversification of pension fund portfolios in LAC appears to be necessary. Portfolio concentration owes to the adoption of strict quantitative investment regulations, underdeveloped capital markets and volatile macroeconomic environments. A gradual relaxation of these restrictions is now in progress in several countries. Regulators have become more conscious of the costs imposed by such regulations and macroeconomic conditions have improved. Greater overseas diversification seems inevitable given the development stage of local capital markets.CC BY 3.0 IGOASSET ALLOCATIONASSET CLASSASSET CLASSESASSET MANAGEMENTASSET MANAGERSASSET PORTFOLIOSBANK BONDSBARRIERS TO ENTRYBASIC PENSIONBASIS POINTSBONDBOND FUNDSBORROWINGCAPITAL MARKETCAPITAL MARKET DEVELOPMENTCAPITAL REQUIREMENTSCENTRAL BANKCOMMERCIAL BANKINGCOMMERCIAL BANKSCOMPETITIVE MARKETSCONFLICTS OF INTERESTCONSUMERSCONTRIBUTIONCORPORATE BONDSDEBTDEBT FINANCINGDEBT INSTRUMENTSDEBTSDEPOSITSDERIVATIVESDEVALUATIONDISABILITYDISABILITY INSURANCEDIVERSIFIED MARKETDOMESTIC BONDDOMESTIC BOND MARKETDOMESTIC BOND MARKETSDOMESTIC CAPITALDOMESTIC CAPITAL MARKETDOMESTIC CAPITAL MARKETSDOMESTIC EQUITIESDOMESTIC EQUITYEARLY RETIREMENTEARNINGSECONOMIC SHOCKSEMERGING ECONOMIESEMERGING MARKETSEMPLOYER CONTRIBUTIONSENTRY BARRIERSEQUITY MARKETSEXPENDITURESFINANCIAL ASSETFINANCIAL ASSETSFINANCIAL DEVELOPMENTFINANCIAL HEALTHFINANCIAL INSTITUTIONFINANCIAL INSTITUTIONSFINANCIAL MANAGEMENTFINANCIAL MARKETSFINANCIAL SUSTAINABILITYFISCAL DEFICITSFISCAL POLICIESFISCAL SUSTAINABILITYFOREIGN INSTRUMENTSFOREIGN INVESTMENTFOREIGN INVESTMENTSFUND MANAGEMENTFUND MANAGERFUND MANAGERSGOVERNMENT BONDSGOVERNMENT SECURITIESHOLDINGHOLDINGSHOUSING FINANCEINCOMEINCOME INSTRUMENTSINCOME SECURITIESINDIVIDUAL ACCOUNTSINDIVIDUAL RETIREMENTINDIVIDUAL RETIREMENT ACCOUNTSINDIVIDUAL SAVINGSINFLATIONINSTITUTIONAL INVESTORSINSTRUMENTINSURANCEINSURANCE COMPANIESINSURANCE PREMIUMSINTEREST RATEINTERNATIONAL BANKINTERNATIONAL SETTLEMENTSINVESTMENT ALTERNATIVESINVESTMENT CHOICESINVESTMENT FUNDSINVESTMENT MANAGEMENTINVESTMENT OPPORTUNITIESINVESTMENT PERFORMANCEINVESTMENT REGIMEINVESTMENT REGIMESINVESTMENT REGULATIONINVESTMENT REGULATIONSINVESTMENT RESTRICTIONSINVESTMENT RETURNSIRAIRA CONTRIBUTIONISSUANCESLABOR MARKETLACK OF COMPETITIONLEGAL FRAMEWORKLEGAL REFORMLEGAL REFORMSLEVYLIQUIDITYLITERACYLONG-TERM INVESTMENTSLONG-TERM SAVINGSLOW INCOMELOW-INCOMELOW-INCOME WORKERSMACROECONOMIC CONDITIONSMACROECONOMIC ENVIRONMENTSMACROECONOMIC POLICIESMACROECONOMIC STABILITYMANDATORY PENSION FUNDMARKET CONCENTRATIONMARKET DEVELOPMENTSMARKET SHAREMARKET STRUCTUREMARKETINGMARKETS DATABASEMATURE MARKETSMATURITYMINIMUM CAPITAL REQUIREMENTSMINIMUM PENSIONMONEY MARKETMORAL HAZARDMORTGAGEMORTGAGE BONDSMULTI-PILLAR PENSION SYSTEMMULTI-PILLAR PENSION SYSTEMSMUTUAL FUNDMUTUAL FUNDSOCCUPATIONAL SCHEMESPENSIONPENSION ARRANGEMENTSPENSION ASSETSPENSION COVERAGEPENSION FUNDPENSION FUND ADMINISTRATORSPENSION FUND ASSETSPENSION FUNDSPENSION PROVIDERSPENSION REFORMPENSION REFORMSPENSION SCHEMEPENSION SCHEMESPENSION SYSTEMPENSION SYSTEMSPENSIONSPERSONAL PLANSPOLITICAL UNCERTAINTIESPOOR INVESTMENTPORTFOLIOPORTFOLIO ALLOCATIONPORTFOLIO DIVERSIFICATIONPORTFOLIO PERFORMANCEPORTFOLIOSPRICE VOLATILITYPRINCIPAL-AGENT PROBLEMSPRIVATE BONDPRIVATE BONDSPRIVATE PENSIONPRIVATE PENSION FUNDPROPERTY RIGHTSPUBLIC PENSIONPUBLIC SECTOR BONDSRATE OF RETURNRATES OF RETURNREGULATORY FRAMEWORKREGULATORY FRAMEWORKSREPAYMENTREPLACEMENT RATESRESERVERESERVE FUNDRESERVESRETIREMENTRETIREMENT BENEFITSRETIREMENT INCOMERETIREMENT SAVINGRETURNRETURNSRISK FACTORRISK PROFILESRISK SHARINGSAFETY NETSALESSALES AGENTSSELF-EMPLOYMENTSHARE OF ASSETSSHAREHOLDERSSOCIAL ASSISTANCESOCIAL SECURITYSTOCK MARKETSTOCK MARKET CAPITALIZATIONSTOCK MARKETSSTOCKSSUPERVISORY AGENCYTAXTAX RATETIME DEPOSITSTRANSPARENCYUNDERDEVELOPED CAPITAL MARKETSUNEMPLOYMENTVOLUNTARY SAVINGSWAGEWITHDRAWALWORKING AGEZERO COUPONZERO COUPON BONDSWorld Bank10.1596/1813-9450-4720