Incluye bibliografía

Contenido: Introduction -- 1. Costa Rica's old age insurance system and the need for reform -- 2. Reforming the public pillar -- 3. Introducing a multi-pillar system -- 4. How to get there: caveats, choices and transitions -- 5. Conclusions -- Annex 1: Simulation assumptions and results -- Annex 2: The mutual fund and voluntary pension fund industry in Costa Rica -- Annex 3: An illustrative option for the design of the second pillar -- Annex 4: Table on Latin American pension reforms: comparison of key characteristics

Costa Rica ' s present social security system contains many inequitable characteristics, including the fact that the highest ratio of benefits to contributions goes to workers with only 20 years of covered employment, while those who contribute for longer get a lower rate of return. In addition, the present pension system, which is largely PAYG (pay-as-you-go), is not well placed to make the maximum contribution to Costa Rica ' s economic growth. All these issues -- the financial nonsustainability of the present system, the inequities it contains, the danger that rising contribution rates would pose to economic growth, and the advantages of building long term national savings through a fully funded pension pillar - have been under consideration in Cost Rica in recent years. Public understanding has also increased about the necessary regulatory and financial structures that are preconditions or simultaneous conditions for pension reform. Section I of this report summarizes problems with the present system. Sections II and III outline a recommended reform model. Section IV discusses the actions that need to be taken to get there. The final section summarizes the next steps for moving ahead.