Chile's UNDERFUNDED Social Security System

[JayHecht@xxxxxxx]

Folks,

The former chief actuay of our Social Security Administration, Robert Myers
points out in the latest issue of "Contingencies" (an actuarial trade
publication) that Chile's SS system is in deep actuarial do-do:

Their vaunted "Personal Savings Account System" supposedly avoids unfunded
liabilities because a worker only gets a return only on what they contribute.
 However, the system is way underfunded because of 1) it grants prior-service
credits (i.e. credit before there was a private ss system), and 2) grants a mi
nimum pension guarantee of 85% of the legal minimum wage for those under 70
and a 90% benefit for those over.  Privatized, yeah once they realize that
this program represents a "mammoth unfunded liability," they'll really need
to privatize!!

Bottom line:  While Pinochet's Chicago boys "won the war", the old dictator
had to throw a healthy dose of collectivized $'s to make it "work."

Jason