At the XIX International Seminar of the International Federation of Pension Fund Administrators (FIAP), organized in the Dominican Republic, concluded that Latin America and the Caribbean will face an unprecedented accelerated aging process.
Population aging will put the region’s pension systems in check, it is an issue that is said repeatedly, but we must be aware of it, it is essential to be able to implement policies that encourage the incorporation of older adults into the labor market, said Waldo Tapia, leader of the Division of Labor Markets and coordinator of pensions of the Inter-American Development Bank (BID).
The IDB analyst commented, at the conference “A vision of pensions in 2050”, that the search for solutions to the challenges that pension systems in Latin America and the Caribbean will face must have a more comprehensive vision.
“How can we close the gender gaps? How can we incorporate the elderly into the labor market? How can we incorporate climate change issues? The issue of institutionality is key, it is linked to the issues of digital transformation (. ..) Is the region prepared for this demographic tsunami that is coming?” Tapia questioned.
Data from the IDB explained that one in four inhabitants in Latin America and the Caribbean will be over 60 years of age in 2050. The population over 60 years of age will be the sector with the greatest weight in society in the region, said the IDB official.
Waldo Tapia explained that the region will not only have a longer-lived population, but also a better quality of life. In Latin America and the Caribbean, people who turn 60 have a life expectancy of 22 years, of which 16 years are in good health.
“In addition to living longer, a part will be in good health, so as long as this trend continues, there is a unique opportunity in pension systems to extend work periods and redefine the retirement stage in the following decades. “, said.
Payment of pensions will be 9.1% of regional GDP
Data from the IDB revealed that by 2050 the payment of pensions, contributory and non-contributory, in Latin America and the Caribbean will represent 9.1% of the Gross Domestic Product (GDP), at the end of 2020 the payment was 4.4% of GDP.
“The aging of the population will impose financial and social commitments on all pension systems. We have almost the perfect storm (…) We are going to have a greater number of pensions, we are going to have to pay for a greater number of time and also the relationship between the contributory base and the beneficiaries will decrease”, explained the IDB analyst.
In addition to the above, there is the informality of the labor market in Latin America and the Caribbean where five out of 10 workers are in informality. In addition, eight out of every 10 people working in the informal sector are 65 or older, Tapia pointed out.
santiago.renteria@eleconomista.mx
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