In 1981, Chile replaced a mature, traditional, government-run, pay-as-you-go defined benefit system with a new multipillar system that included a defined contribution plan along with a public benefit in the form of a minimum pension guarantee (MPG). The old system was insolvent, having promised benefits that increasingly exceeded contributions. Many workers and employers evaded the payroll tax, exacerbating the fiscal problem. The objectives of the reform were to make the system largely funded and therefore fiscally sustainable; to manage the funds privately in order to avoid political manipulation; to link benefits more closely with contributions, thereby reducing the tax element and the vulnerability of the system's finances to evasion; and to make the redistributive element explicit and better targeted. This chapter analyzes whether women in Chile were helped or hurt by this reform.
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