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# Table of Contents

|I.|Introduction............................................................................................................................ 1|
|---|---|
|II.|The structure of the Second Pillar.......................................................................................... 2|
|III.|Performance of the Second Pillar: Growth............................................................................ 4|
|IV.|Performance of the Second Pillar: Portfolios and Investment Return.................................. 7|
|V.|Performance of the Second Pillar: Costs and Fees .............................................................. 15|
||A. Operating Fees ............................................................................................................... 15|
||B. Asset Management Fees................................................................................................. 17|
||C. Total Fees....................................................................................................................... 19|
|VI.|Pension Reform and Capital Market Development ............................................................. 26|
|VII.|Regulation of the Accumulation and Payout Phases ........................................................... 30|
||A. Main Regulatory Issues in the Accumulation Phase...................................................... 30|
||Licensing........................................................................................................................ 30|
||Governance .................................................................................................................... 30|
||Investment Regulation ................................................................................................... 33|
||Minimum Return Guarantee .......................................................................................... 35|
||Accounting Standards and Valuation Rules .................................................................. 35|
||Auditing Standards......................................................................................................... 36|
||Disclosure Rules ............................................................................................................ 37|
||Supervision .................................................................................................................... 37|
||B. Main Regulatory Issues in the Payout Phase .................................................................. 39|
||Review of Main Payout Regulations ............................................................................. 39|
||The Main Deficiencies in the Payout Phase .................................................................. 40|
|VIII.|Conclusions and Reform Agenda ........................................................................................ 42|
||A. Review of Main Findings................................................................................................ 42|
||B. Improving the Regulatory Framework for the Accumulation Phase .............................. 44|
||C. Overhauling the Regulatory Framework for the Payout Phase....................................... 49|
||D. Promoting the Development of Financial Instruments ................................................... 50|
|Refe|rences..................................................................................................................................... 53|
|APP|ENDIX A............................................................................................................................... 55|
||Methodology for Estimating the Sources of Growth of Pension Fund Assets. ................... 55|
|APP|ENDIX B............................................................................................................................... 57|
||A General Framework for Comparing Fees During the Accumulation Phase .................... 57|
||The General Set-up .............................................................................................................. 57|
||No Interruptions in Service.................................................................................................. 57|