Let me say something about the transition to the new system. Pension reform should not damage those who have contributed all their lives. If that takes a constitutional amendment, so be it. Second, the workers already in the workforce, who had contributed tothe state system, were given the option of staying in the system even though we thought its future was problematic. When those workers retire, the government will cash the bonds.
New workers have to go into the new private system because the old system is bankrupt.
Thus, the old system will inevitably die on the day that the last person who entered that system passes away. On that day the government will have no pension system whatsoever. The real transition cost of the system is the money the government ceases to obtain from the workers who moved to the new system, because the government is committed to pay the pensions of the people already retired and of those who will retire in the future. That transition cost can be calculated. In Chile it was around 3 percent of gross national product.