The 12.7 percent average return between 1982 and 1995 coincided with boom years in Chile complemented by government's high borrowing costs. Today's rates on government securities are much lower. Predictions for future annual returns, which will determine pension benefits, range between 3 percent and 5 percent. Given the vast informal sectors in the region, the neediest members of the population remain outside of the social security system. Argentine economist Ruben Lo Vuolo estimates that given unemployment, underemployment, and the working poor, only 50 percent of the economically active population in Argentina are able to contribute regularly to the social security system.
Privatization also abandons the redistributive aspects of the public systems.
In a private system, benefits depend exclusively on the level of individual contributions and investment performance, so social security ceases to be an antipoverty program. Public systems tended to compensate for the intermittent work history characteristic of women. But the private social security systems in South America favor men by placing men and women in separate actuarial categories. Because they tend to earn less, spend more years of their lives in unpaid labor, and have greater longevity, women purchasing annuities upon retirement will systematically receive lower benefits than men. Furthermore, certain predominantly male occupations continue to receive special treatment.