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Pros and cons of Chile's privatized pension plans

To sell privatized pension plans to workers, Chile's fund managers hired miniskirted marketers to troll outside factories and office buildings. The marketers' wages got passed on to workers who signed up, however, and dragged down returns.

Here are some other pros and cons:

Pro: From 1981 to 2001, a 10.9 percent average return on savings.

Con: Critics say the number is inflated because it doesn't deduct administrative fees.

Pro: Retirement plan administrators offer menus of mutual funds with varying degrees of risk.

Con: Poor initial oversight allowed fund managers to lure workers into switching plans, then charge them for the switch.

Pro: Retirees expect payments equal to at least 40 percent of their salaries.

Con: The plan covers only retirees who've worked 20 years or longer and is optional for part-time workers and the self-employed, who rarely participate.

Caveat: Chile, with 15 million people and an economy the size of Louisiana's, may not be comparable to the United States.

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(c) 2005, Knight Ridder/Tribune Information Services.

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