A Personal Burden -LAT (failure of Chile's private pension system)

[Rose Siding]

Weary from decades of working nights and weekends at a public hospital, nursing assistant Inelia Pardo Acevedo recently retired.

But the 64-year-old plans to look for a part-time job to pad the nest egg in her personal retirement account. The $225 a month she draws under Chile's privatized system doesn't stretch far. And what galls her is that colleagues who stuck with traditional pension plans get three times as much, guaranteed for the rest of their lives.

The government "painted this wonderful picture of private accounts," Pardo said. "They fooled me. They fooled us all."

As the Social Security debate heats up in the United States, many are looking south to Chile, where nearly a quarter century of experience with privatization hasn't settled the question of how to best construct an old-age safety net.

In 1981, Chile scrapped a pay-as-you-go system similar to the one in the U.S., in which the contributions of active workers were used to pay pensions of existing retirees. Instead, many Chileans began funneling 10% of their wages into professionally managed private accounts that allowed them to invest in stocks and bonds......

http://www.latimes.com/business/la-fi-chile13feb13,0,5035829.story?coll=la-home-business

[isit2008yet]

1. with out reading the story...

the British did the same, they privatized their retirement system in 1975. They now have a new welfare program for those seniors that don't have enough income...just another failure to add to his "miserable failure" resume...if it passes!

[SharonAnn]

2. Thanks, that's just the article I needed for a friend who's spent too

much time listening to Rush.

[Karenina]

3. Read and learn!

:kick:

[David__77]

4. They bribed workers to join the privatized system...

They gave them wage bonuses if they did. The free traders at Harvard were ecstatic--of course, it took a Nazi/fascist dictatorship to institute such a monstrosity.