Global pension reform initiatives that got underway prior to the coronavirus outbreak must continue – but implementation needs careful reconsideration.

That, along with concerns over the potential long-term impact of pension freedom and contribution relief measures, was among the key points raised during a webinar hosted by industry organisation the International Federations of Pension Funds Administrators (FIAP). Chile – which has a defined-contribution, or private scheme, and a solidarity pillar – is among those that have embarked along the reform path to boost pension size, a hot topic in the country.

Reform is also on the agenda in Peru and Uruguay and seen as necessary in Argentina and Colombia, largely to address sustainability issues. Chile’s government already has a bill in congress, which establishes a complementary public scheme and also gets employers to start contributing to the savings pots of workers.

“The process should not stop,” said Pablo Antolin, principal economist at the private pension unit of the OECD financial affairs division. Citing demographic and economic pressures, he said workers needed to save more and for longer, and that fee and commission structures needed to be analyzed.

However, citing the example of Chile, he said lawmakers may need to reconsider how any new rules that involve introducing employer contributions are implemented, suggesting they could be phased in first in sectors of the economy that are more resilient to the COVID-19 fallout. Chile’s labor minister, María José Zaldívar, recently said the government was open to changing how employer contributions are phased in, local paper Diario Financiero reported. The stance of the OECD, which is working on a new pension report, is that combining private and pay-as-you-go pensions, automatic adjustment mechanisms and a strong social safety net for pensioners improves retirement outcomes.

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