The Use of the Insurance Method in the Peru Pension System

The unique formula of the pension system in Peru consists of two competing schemes - a public pay-as-you-go scheme (SNP) and a privately funded scheme (SPP). However, only the SNP scheme can be considered as a solution using the insurance method due to the presence of a premium as a source of financing and a common risk fund. On the other hand, SPP uses an investment method to accumulate retirement resources. Using the example of Peru, it can also be stated that the influence of „black swans” (such as the COVID-19 pandemic) on human behaviour may lead to the complete annihilation of resources accumulated with rational justification intended for retirement purposes.