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[url=http://www.thebusinessonline.com/Document.aspx?id=9396717C-AC86-44E6-AA37-FA4DB7F644BB&doc_page=1]The Business..[/url] said:'...A spectre is haunting the world. It is the spectre of bankrupt, government-run social security systems.' Thus spoke Jose Pinera, Harvard economist and Chile's radical former social security minister, who has championed the biggest, the boldest and arguably the most successful pension privatisation of modern times.
It was the young Pinera who inaugurated the reform of Chile's bankrupt state pension scheme a quarter of a century ago. It remains a central pillar of the rescue and transformation of Chile's economy. As with so much associated with that country under the regime of Augusto Pinochet, who died this week, it is seen as a tainted reform, relevant only to the specific problems of Chile at that time and of no relevance to the rest of the world.
In fact, more than 25 years on, countries from Mexico to Sweden have adopted the system, or elements of it. Some 6m Chilean workers, more than 90% of the regularly employed labour force, now have their own Personal Retirement Account nest eggs.
The value of these accounts has been growing at an average annual rate of 10.3% in real after-inflation terms; and the savings in aggregate now total more than $50bn (£25.5bn, E37.5bn) with pay-outs commonly reaching between 50% and 70% of final salary...
Makes you think...