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Abstract
This article describes and suggests the changes much needed to the University of Puerto Rico (UPR) Retirement System to improve its actuarial situation and analyzes the internal and external factors that affect it. The three main sources of income for this system are: (1) employer contribution, (2) individual contribution and (3) revenue from investments. In recent years, active participants are substantially less while debt and beneficiaries of the system have increased. Ironically, the increase in life expectancy becomes an additional aggravating element, being one of the factors that influence decisions regarding changes from a plan of defined benefits to a plan of defined contribution. In the past, two studies were conducted on the UPR Retirement System in which it was considered such change to improve the actuarial situation. The general tendency to eliminate defined benefit plans is motivated by the fact that they are costly. The article reaffirms the importance of adjusting retirement systems to their actuarial reality. It is concluded that the problem is not the type of plan, but the way in which it is managed. This article recommends changes to undertake the debt and strengthen the system‘s assets, while keeping the defined benefit plan.Copyright Notice:
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