"A heavyweight analysis of the Latin American pension revolution, which raises important questions about the optimal scale of compulsory saving when redesigning pension systems."--Paul Wallace, The Economist
"Although it maintains the fundamental principles of Averting the Old Age Crisis, published by the World Bank in 1994, Keeping the Promise takes a fresh look at the outcome of structural pension reforms implemented in 12 Latin American countries during the 1990s, and proposes new, sometimes bold policies. This is an important and controversial book that must be read by experts on pensions, social security, and Latin America."--Carmelo Mesa-Lago, Distinguished Professor Emeritus of Economics and Latin American Studies, University of Pittsburgh

"A heavyweight analysis of the Latin American pension revolution, which raises important questions about the optimal scale of compulsory saving when redesigning pension systems."--Paul Wallace, The Economist
"Although it maintains the fundamental principles of Averting the Old Age Crisis, published by the World Bank in 1994, Keeping the Promise takes a fresh look at the outcome of structural pension reforms implemented in 12 Latin American countries during the 1990s, and proposes new, sometimes bold policies. This is an important and controversial book that must be read by experts on pensions, social security, and Latin America."--Carmelo Mesa-Lago, Distinguished Professor Emeritus of Economics and Latin American Studies, University of Pittsburgh

Countries throughout the world are increasingly relying on individual pension savings accounts to provide income replacement in old age for their citizens. Although these have now been in place for several decades, the metrics for the measurement of their performance has not always meaningful from the perspective the long term objectives of pension funds. The recent financial crisis has highlighted the need to establish meaningful performance measures that consider pension funds in relation to the ability to effectively provide income replacement at retirement age. The book discusses the theoretical basis and a number of implementation issues related to the emerging view that at meaningful evaluation of the investment performance of pension funds requires the design of life-cycle benchmarks against which performance can be evaluated. The composition of these benchmarks would depend on a number of factors, including the presence of other sources of retirement income; the age of individuals; the rate of contributions; the target replacement rate; the expected density of contributions; the type of retirement income in the payout phase, and the risk aversion of policymakers and individuals. This book provides an evaluation of the financial performance of funded pension systems within the standard mean variance framework. It then provides a discussion of the limitations inherent to applying these methods to pension funds and proceeds to review the many other issues that should be addressed in developing more useful and meaningful performance measures through the formulation of pension specific benchmark portfolios. Evaluating the Financial Performance of Pension Funds concludes with commentary and observations about the need for and application of this new approach to performance measurement and the impact of the recent global financial crisis on the pension funds.

Empirical analysis of two decades of pioneering pension and social security reform in Latin America and the Caribbean shows that much has been achieved, but that critical challenges remain. In tackling this unfinished agenda, a great deal can be learned from the reform experience of countries in the region. Keeping the Promise, produced by the chief economist's office in the Latin America and Caribbean Region at the World Bank, evaluates policy reforms in 12 countries, points to successes and shortcomings, and proposes priorities and options for future reform. ""Keeping the Promise provides a timely assessment of two decades of pension reform experience-with a wealth of new data, and empirical evaluation of reformed social security systems. Many economists and policymakers will not be persuaded by some of the main conclusions and recommendations-such as the supposed failure to increase coverage, and the call for strengthening a pay-as-you-go defined-benefit scheme for poverty prevention-but they will welcome the book's critical appraisal. This is required reading for pension specialists and policymakers in Latin America and beyond.""-Klaus Schmidt-Hebbel, Chief of Economic Research, Central Bank of Chile ""A heavyweight analysis of the Latin American pension revolution which raises important questions about the optimal scale of compulsory saving when redesigning pension systems. "" -Paul Wallace, The Economist