1. II International Conference of Pension Funds Santiago March 2001 Contribution Rates and Benefits of the Private Pension Systems in Latin America Jaime Cáceres Sayán Vicepresident FIAP

2.  FIRST PILLAR: The minimum pension, guaranteed by the government (for those workers whose contributions are not enough to achieve this pension level).  SECOND PILLAR: The compulsory contribution.  THIRD PILLAR: The voluntary contribution. Pension Financing

3. Main Objective: The Pension  The success of a pension system is measured by the income level obtained by the affiliate at the time of retirement. With the contributions and the return provided by the investment of the funds, the affiliate should be able to retire with a 70% to 80% of its remuneration. PENSION= f (CONTRIBUTIONS; RETURN; TIME; AGE) PENSION= f (CONTRIBUTIONS; RETURN; TIME; AGE)  The return rate plays a fundamental rol beside the contributions. About a 4% to 5% return is the minimum necessary to obtain a 70% to 80% replacement rate, with a 10% contribution rate.  All countries in the region have exceeded the 5% return.

4. The Contribution and Replacement Rate in Countries with pension reform CountryContribution Rate Age of Retirement Contrib. Years Male Contrib. Years Female Replace. Rate Male Replace. Rate Female Argentina 7.4%65/60403578%48% Bolivia 10%6540 105% Chile 10%65/604035105%65% Colombia 10%62/57373278%50% El Salvador 8.5%60/55353055%36% México 6.5%6540 68% Perú 8%6540 84% Uruguay 12.3%6035 80% Affiliation Age: 25 years Return: 5% real Life expectance: 80 years Cessation Rate: 10% Average: 82% 67% Assumptions:

5. COUNTRYEmployeeEmployerGovernment Argentina XX Bolivia XX Chile X Colombia XX El Salvador XX México XXX Perú X Uruguay X Brasil XX Costa Rica XXX Ecuador XXX Guatemala XXX República Dominicana XXX Private Systems Public Systems Contribution Financing

6. Types of Benefits in Countries with pension reform ARGBOLCHICOLEL SMEXPERURU Retirement Age Male65 626065 60 Female606560575565 60 Anticipated RetirementXXXXXX Discapacity PensionXXXXXXXX Survival PensionXXXXXXXX Deferred PensionX

7. Types of Benefits in Countries with an on-going pension reform BRASILC. RICAECUADORR. DOMINIC. Regular Retirement Public SystemXXXX Regular Retirement Private SystemXXXX Anticipated Retirement Public SystemX Anticipated Retirement Private SystemXX Discapacity Public SystemXXXX Discapacity Private SystemXX Survival Public SystemXXXX Survival Private SystemXXX Others Public SystemA,B Others Private SystemA,C A: Disease Pension B: Maternity Pension C: Special Pension, Deferred Pension

8. Beneficiaries of the new Capitalization Regimes CountryTotalService Absolut%DiscapacityRetirementSurvival Argentina57,281100.0%14.9%20.3%64.8% Bolivia629100.0%24.6%0.0%75.4% Chile322,234100.0%7.8%61.6%30.6% El Salvador1,279100.0%0.0% 100.0% México *70,354100.0%n.a. Perú17,618100.0%5.6%18.0%76.5% Uruguay1,491100.0%16.5%1.8%81.7% TOTAL470,886100.0%8.8%53.3%38.0% December 1999 * México: Accumulated to January 2001

9. II International Conference of Pension Funds Santiago March 2001 Contribution Rates and Benefits of the Private Pension Systems in Latin America Jaime Cáceres Sayán Vicepresident FIAP