HOW CHILE GOT IT RIGHT

THE "TWO-TIER SYSTEM'' THAT MANY EXPERTS ON SOCIAL Security recommend for the U.S. was pioneered in Chile. Having passed through years of military dictatorship before becoming a democracy, that country isn't normally regarded as a showcase of social policy. Yet its 14-year-old retirement system is being adopted by a number of other nations, including Argentina, Australia and Sweden, that have graying populations and overburdened pension plans. The enforced savings and investment features of the new system are already credited with one remarkable outcome: the net worth of the average Chilean--$21,000--is almost four times the worker's average annual salary. By comparison, the...

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