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2011 Risk Management Conference Recap

2011 Risk Management Conference Recap
Reinventing Social Security for the 21st Century
An Interview with Dr. José Piñera
Former Minister of Social Security of Chile

Dr. Piñera was a keynote speaker at CBOE's 27th Annual Risk Management Conference

  • On the U.S.' $100 Trillion Problem:
    The U.S. government says the debt it has incurred by promising people pension, health, etc is $100 trillion -- seven times the GNP. "One way or another, the U.S. citizens will have to pay for this debt in the future. That's why it is so important to confront and to do a real entitlement reform in America."
  • On How Chile Reformed Their Retirement Program:
    "In Chile, we converted the social security system -- that was exactly the same as the U.S. -- into a system of personal retirement accounts... The system is managed by the private sector and is supervised and regulated by market friendly regulation."
  • On Whether on Not the Program Can Work in the U.S.:
    "Why can't an idea like this be exported to America? A country with the best capital markets in the world, with a tradition of individual savings, and a country based on a free market economy. It has worked so well in my country for 30 years that I believe it will work even better in the United States."
  • On the Program's Investment Philosophy:
    "This is long-term retirement money -- it has to be managed extremely prudently. No leverage, no speculation, no investing money in sophisticated financial instruments. We were very conservative in the execution of the system."
  • On Impact to Chile:
    "Chile has eliminated almost all its unfunded social security debt through this system and at the same time, has reduced its external debt to practically nothing. Chile today is an investment grade country. Its credit rating will go up and up. I'm sure, in a few years, Chile will have a better credit rating than France, Germany, the U.K., Japan and maybe even the U.S."

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