Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

Chile’s Senate approves pension reform law

Chile’s Senate on Wednesday approved a measure allowing citizens to withdraw up to 10 percent of their pension funds to help mitigate the effects of the coronavirus pandemic.

Read also COVID-19 Relief Packages Help Fuel Ultra-Low Interest Rates

The bill, approved by a 29-13 vote with one abstention, will now return to the lower house Chamber of Deputies where it has already been given the green light for a final and decisive vote.

Read also Covid-19 May Destroy Chile’s Iconic Pension System

The change has been opposed by the government of President Sebastian Pinera but is supported by several senators from the country’s governing coalition. It would be the first major reform of the privatized pensions system that was installed under late former dictator Augusto Pinochet.

The program obliges workers to pay 10 percent of their salaries into an individual account that is managed by administrators of private pension funds.

These AFPs, as they are known, are deeply unpopular in Chile and were one of the focal points when widespread anti-government protests erupted in October 2019. Many people had seen their pensions fall to below the minimum wage of 301,000 pesos ($390) even though their pension plans were supposed to guarantee them 70 percent of their last salary.

When the Chamber of Deputies first approved the new measure last week, the sound of pots and pans being banged — a popular method of both protest and celebration in Latin America — could be heard throughout Santiago and other cities. If the bill passes the final hurdle, 10.9 million people will be able to withdraw up to 4.3 million pesos ($5,400) from their pension funds.

A similar measure in Peru passed in May saw hundreds of thousands of people withdraw up to $3,700 from their pension funds. Pinera has opposed the Chile law and tried to resist it by announcing a package of measures to support the middle classes including a $630 bonus and low-interest loans of $1,900. But he failed to sway a number of rebel legislators from the ruling coalition whose political futures depend on the middle classes, many of whom feel abandoned by the government.

Read more @RFI