Regarding the CISS annual meeting in Guatemala (fifth report)

Hernando Pérez Montas main messages were: i) we should not discuss whether DB or DC system is the best, both have good and bad things; ii) we should focus our attention on the effect that global crises is having on pension plans: a) decrease in the value of reserves, b) low rate of return of reserves or investments and c) lower density of contributions; iii) by scheme in the DB the periods of equilibrium of the Systems will decrease which will imply a higer deficit, for DC the replacement rates will not be above 25%. Finally Hernando rephrased the statement of specialist Barr in the sense that it is important that all countries have a long term strategic definition, with replacement rates of 30% complemented with a complementary second pilar and an individual voluntary third pillar. Hernando urges the audience to promote reforms on this lines and to avoid political use of reserves/funds.