ABSTRACT
This chapter analyses the broad implications of alternative forms of pension design by comparing the main features of the reformed pension schemes in Latin America. It discusses the basic functions performed by pension schemes as a preliminary to the analysis of the reformed pension system in Latin America. Pension reform in Argentina, Chile, Colombia, Costa Rica, Mexico, Peru and Uruguay has been aimed at replacing, totally or partially, the existing social insurance pension schemes with individual capitalization pension plans. Pension reform involves a fundamental shift in pension provision. The chapter compares the key design features of final salary or defined benefit pension schemes as against defined contribution pension schemes, a distinction that is crucial in the analysis of pension reform in Latin America. It provides a more detailed examination of the key features of the reformed pension systems, first in Chile, and then in Latin America.
