The Pension system in Guatemala

Abstract

The desire to understand pension arrangements in a country with a comparatively high proportion of young people in the population was the inspiration for this article. The aim of the research is to present past and present solutions and to find in the Guatemalan pension system ideas that are worth using in the international after-equations. The author hypothesizes that in a country with a very high share of the shadow economy there is low population coverage of participation in the pension system. The article is structured in the following manner: 1. General information about the country, 2. The historical development of the pension system, 3. The present state of the pension system and 4. Challenges and anticipated changes in the pension system. In conclusion, the author states that the pension system in Guatemala is different from other systems in Latin America, above all, by the absence of the second, funded pension pillar. In addition, the country has not created such system solutions as voluntary retirement savings as one’s characteristic for the third pension pillar. In international comparisons, you should pay attention to the formula used in the Guatemala indexation of pensions granted. Basing the valuation on actuarially justified the possibilities of the pension scheme being assessed very positively. Placed at the outset the hypothesis that in Guatemala, a country with a very high share of the shadow economy, there is low coverage of the population participating in the pension system, was confirmed.