Disability System Sorely in Need...(are only made by the applicant not Socia...),Health

only go up, never down, during the appeals process.

Chile replaced its traditional social security system 25 years ago with a system of personal retirement accounts. Workers now put 10 percent of their wages into personal retirement accounts in pension funds of their choice and pay an additional 2.4 percent for survivors' and disability insurance and administrative fees.

Depending on the number of years they have participated and the degree of their disability, Chilean workers are guaranteed to receive as much as 70 percent of their wages -- a higher percentage than disabled workers in the U.S. Although workers have a lifetime to save for retirement, they can become disabled at any age. If a disabled worker's retirement account balance is insufficient to purchase an annuity that replaces a guaranteed percentage of his wages, he receives the rest from a group insurance policy purchased by the worker's pension fund. On the average, workers' own savings are projected to cover about 50 percent of the cost of their disability benefits; insurance covers the rest. Due to this reform, Chile's disability system will cost only a fourth of what it otherwise would have been, in the long run.

According to the NCPA's study, several features of Chile's disability system reduce costs and provide workers with incentives to continue working. For example:

-- Part of the benefit is financed by the worker's retirement account and

investment earnings on the annuity premium.

-- Since disabled workers draw on their own retirement accounts to fund

their benefits, workers have less of an incentive to claim disability

as a form of early retirement.

-- Pension funds in Chile participate in the disability assessment

procedure and can challenge disability determinations made by

independent medical boards.

-- Once workers in Chile
'/>"/>