9 August 2021
GFIA has highlighted its concerns to the Financial Stability Board (FSB) about worrying developments in Chile, where the government has defunded almost five million workers’ pensions in an effort to counter the economic shock the country faces due to the pandemic.
While GFIA appreciates efforts already undertaken by the FSB, insurers take the view that the FSB must increase its support for private capital-backed pension systems, which both contribute to the stability of pension systems and the adequacy of pension revenues and have a key role to play in underpinning economic recovery from COVID-19.
The FSB must therefore highlight the importance of private capital-backed pension systems in its policy suggestions for the G20 summit recommendations. Targeted suggestions would enable the Italian G20 Presidency to examine the role that long-term capital asset accumulation could play in facilitating the recovery from the pandemic.
The FSB should also raise these issues among members of the Regional Consultative Group for the Americas to highlight the damage being done to Chile’s financial stability and the possible knock-on effects for the region. The FSB should also encourage the International Association of Insurance Supervisors (IAIS), the International Organisation of Pension Supervisors (IOPS) and the Organisation for Economic Cooperation and Development (OECD) to further contribute towards discussions on the risks that COVID-19 poses to funded retirement systems.