This is “Roadmap 555”, specifically a second version of the one already launched in 2023.
The new document from the AFP Association revolves around five major sets of proposals, which state that, if all of them were implemented, “the average pensions of men could increase by 116% and of women by 127% in the long term, with significant increases in replacement rates” by nearly 70 percentage points.
This is “Roadmap 555”, specifically a second version of the one already launched in 2023.
The president of the association, Paulina Yazigi, pointed out in this context that “we need policies that not only respond to the needs of today, but also prepare our society for the challenges of the future.”
“Every additional year of contributions is an opportunity for workers to secure a more secure future. If we get more people to do so on a continuing basis, we will not only increase individual pensions by almost a third, but we will also strengthen the entire system for future generations.”
PROPOSALS BY THE AFP ASSOCIATION FOR INCREASING PENSIONS
The first point is to “resolve the low density of contributions and gaps in pensions”, where it is proposed to implement measures that force everyone with an income to contribute, including independent and self-employed workers.
The second set of measures aims to “raise the contribution rate to the average level of OECD countries”, i.e. 18% over a period of 16 years.
“The different element is to raise the contribution rate in a differentiated way, keeping the contribution of the lowest-income workers at 10%.” They add that a mechanism is being analyzed to “gradually postpone the legal retirement age for those under 40 years of age, in order to improve the sustainability of the system.”
This set of proposals also emphasizes the need to modernize the regulation of the investment regime, in order to optimize the "risk-return" profile of pension funds.
In this regard, it is proposed to “increase the investment limits on alternative assets and improve multi-funds, which could increase the expected profitability by an average of 0.7% per year.”
PGU AND FINANCIAL EDUCATION
The fourth proposal is to increase the Universal Guaranteed Pension (PGU) through the creation of a “PGU Objective”. According to the AFP Association, this would strengthen the solidarity pillar.
Finally, there is the promotion of financial education, especially from an early age. The aim is to “raise awareness about the importance of the social security system and use new technologies to reach younger generations with financial education.”
"Although these initiatives are difficult to quantify in terms of immediate impact, it is projected that they could improve understanding and participation in the pension system, contributing to the social sustainability of the system," the union concludes, regarding the last point.
