Gaps in the welfare State and reforms to pension systems in Latin America

Pension systems in Latin America are organized as tripartite
contributory schemes paid into by employers, employees and the State.
Their coverage has always been segmented and very low because a
significant percentage of the labour market is composed of subsistence
sectors with low productivity and unstable, uncertain access to
commercial and financial networks (associated with a lack of employment
protections, low income levels and a high incidence of poverty);. As a
result, contributory systems exclude a large proportion of workers and
their families from protection against the risks of disability, old age and
death, with large differences in coverage between the formal and informal
sectors. The main challenge now is to incorporate solidarity financing
into pension systems in an efficient way, so that contributory and noncontributory
schemes can be combined in accordance with the logic of
social security.