Social Security & Medicare Notes

Chile's privatized system not a model for U.S.

The Century Foundation describes how Chile's privatized pension system adopted a quarter century ago under the dictator Pinichet has failed. Pensions are significanlty lower than were predicted, while costs to the government continue to be higher than hoped or promised. Transition costs from the older system are expected to average 4.3 percent from 1999 to 2037. Commissions, fees and other administrative costs have absorbed 28 to 33 percent of the money contributed by workers.

This is clearly not the model the American people want for funding their retirement. Of course, the banks and insurance companies don't agree with that judgment. They would receive those commissions, fees and administrative costs.

posted by Richard @ 11:19 AM