{
  "id": "RL34006",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "RL34006",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 348479,
      "date": "2007-05-17",
      "retrieved": "2016-04-07T18:08:05.746029",
      "title": "Social Security: The Chilean Approach to\u00a0Retirement",
      "summary": "Over the past few years, there has been intense debate about Social Security reform in the United States. A number of options, ranging from changing the benefit formula to adding individual accounts, has been discussed. The policy debate takes place against the backdrop of an aging population, rising longevity, and relatively low fertility rates, which pose long-range financial challenges to the Social Security system. According to the 2007 Social Security Trustees Report\u2019s intermediate assumptions, the Social Security trust funds are projected to experience cash-flow deficits in 2017 and to become exhausted in 2041.\nAs policymakers consider how to address Social Security\u2019s financing challenges, efforts of Social Security reform across the world have gained attention. One of the most oft-cited international cases of reform is Chile. Chile initiated sweeping retirement reforms in 1981 that replaced a state-run, pay-as-you-go defined benefit retirement system with a private, mandatory system of individual retirement accounts where benefits are dependent on the account balance. As a pioneer of individual retirement accounts, Chile has become a case study of pension reform around the world. Although Chile\u2019s experience is not directly comparable to the situation in the United States because of large differences between the countries, knowledge of the case may be useful for American policymakers.\nThis CRS report focuses on the Chilean individual retirement accounts system. It begins with a description of the U.S. Social Security policy debate, along with a brief comparison of Chile and the United States. Next, the report explains what Chile\u2019s individual retirement accounts system is and how it works. The pension reform bill sent to the Chilean Congress for debate in 2007 is also discussed. The report does not address other components of Chile\u2019s social security system, such as maternity, work injury, and unemployment.\nThe final section provides an assessment of Chile\u2019s now 26-year-old individual retirement accounts system. Pension reforms have contributed to the rapid growth in the Chilean economy over the past two decades and returns on pension fund investments have been greater than expected. Administrative costs, however, have been high and participation rates have been modest at best. There is concern that the system does not cover the entire labor force and provides inadequate benefits to low income workers.\nThis report will not be updated.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
      "formats": [
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          "format": "HTML",
          "encoding": "utf-8",
          "url": "http://www.crs.gov/Reports/RL34006",
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          "filename": "files/20070517_RL34006_f83c380498cd488a971ecdd33d38498369bedb2a.html",
          "images": null
        },
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          "url": "http://www.crs.gov/Reports/pdf/RL34006",
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          "images": null
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      ],
      "topics": []
    }
  ],
  "topics": [
    "Domestic Social Policy",
    "Economic Policy"
  ]
}