Also, if benefits depend on amount and years of contributions, this sets up a category we might call the "partially insured" who receive only meager pensions.

For example, Chile provides a minimum pension guarantee of 25% of the average wage to workers who have contributed at least 20 years to their individual accounts in the second pillar, and many other countries have followed this example. Accumulations in the second pillar are supplemented by the government to bring the annual benefit to this level. This guarantee will protect low income covered workers, especially those who have contributed for only 20 years. It provides an incentive for low income workers to stay in the system for 20 years-and to evade thereafter (a guarantee that increased with years of contributions might have been more efficient and egalitarian). Because of this incentive, many workers may indeed strive to attain the 20 year minimum. But certain groups, such as the self-employed, are simply not eligible for coverage, and some women may, by custom or labor market structure, lack access to jobs outside of the household. A smaller social assistance benefit, about 12% of the average wage, is provided to the poorest among these groups (World Bank, 1994).

The Brazilian social security system has long included an "age" pension which, at a specified age (65 and 60 for urban men and women, 60 and 55 for rural men and women, respectively), pays 70% of the wage base to workers who have contributed for at least 5 years. The typical pension was one minimum salary, about 30% of the average wage. The Brazilian system also included a much more generous pension based on length of service, that required thirty years of covered employment and paid 5-6 minimum salaries to the average beneficiary. The "length of service" pension went mainly to urban men who worked in the formal labor force for most of their lives. The age pension went mainly to women, especially rural women. For example, in 1997 out of 5.2 million recipients of the age pension, 75% were rural dwellers and 62% were women, while 83% of the 2.9 million recipients of the length of service pensions were urban men (Instituto Nacional do Seguro Social, 1998).

Because of its low employment requirement, the age pension was a form of nearuniversal redistributive social assistance, targeted toward rural areas and women. However (as a consequence of this and other features), Brazil faces severe fiscal problems in its social security system, as benefits exceed contributions, and evasion problems as workers were increasingly tempted to escape to the informal sector, cease contributing, and collect the age pension. As part of the reform process that began in the mid 1990's and is on-going today, the contribution requirement for the age pension will gradually increase to fifteen years (World Bank, 1998). This change will likely improve compliance and sustainability, but rural women and others who do not have a chance to participate in the formal labor market for fifteen years may become destitute.

As another example, Uruguay previously had an age pension that required 10 years of covered employment, but the required contributory period was raised to 15 years in Uruguay's recent pension reform (Queisser, 1998; Law 16.713, Capitulo II, Article 68). Undoubtedly this will have the same beneficial effects on fiscal sustainability, but the fate of the uninsured is unclear. Means-tested assistance outside of the contributory plan is 7