We can privatize without using the Chilean model.
I’d like to listen to some ideas.
We already have banks, savings accounts and there is no reason why management fees would have to be any more than a normal savings account IMO.
Create a law that lets any bank savings account become a DTI Account (Don’t Touch It) that receives the 12% or so normally going to SS. Any other activity before the person is, say 50, becomes a taxable event (just a little incentive to leave it alone) except for major medical expenses.
Just an idea.
Gee, you think therein might lie some of the problem? Do you suppose those management fees were put in place sometime after Pinochet's party was voted out of power and the socialists were put in charge?
Do you suppose the only competent managers the socialist government could find were crony capitalist allies who couldn't help but help themselves to a goodly portion of the returns? I'm not saying that that is the case, I'm just saying that if I'm near a fire hydrant with the smell of dog urine, I might suspect that a dog peed on it without actually catching the dog in the act.
Just for reference, what management fees are involved with the biggest and best professionally managed private retirement plans in the United States? I don't know the answer, but I know that our particular group won't even look at proposals with management fees over 2%.
Final question: What return are Chileans getting compared to their neighbors in Argentina who had a complete government takeover of their private pension plans?