Chile: Gabriel Boric will present his reform with a minimum pension of 300 dollars in August

the president of Chili, Gabriel Boricannounced this Wednesday that it will present its long-awaited reform of the pension system in August and promised a universal minimum retirement for all those over 65 years of 250,000 Chilean pesos (about 300 dollars).

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“The time has come to build a true social security system and where our legitimate ideologies do not hinder the need of Chilean men and women to have a decent pension,” said the progressive president during his first accountability in Congress, two months and half after taking office.

The Chilean pension system, established during the Augusto Pinochet dictatorship (1973-1990) and a pioneer in the region in individual capitalization, has been widely criticized in recent years for the few pensions it grants.

The model requires each worker to contribute 10% per month of their salary to a fund managed by the so-called Pension Fund Administrators (AFP), private entities that annually generate millionaire benefits.

People who obtain lower pensions or those who do not contribute receive a state participation, although half of the taxpayers did not receive an amount above the poverty line in 2021, according to data from the Sol Foundation.

The pension reform, Boric pointed out, will be presented after “a broad social dialogue process, with the participation of workers, employers and experts.”

A LONGING ON THE MARCHES

Low pensions were one of the great demands of the social crisis that began in 2019 and lasted for more than a year with massive marches for equality and for a less privatized system.

“We have spent decades debating a change in the AFP system,” said the government official.

Since he announced his intentions to change the system in the campaign, the right and the business community have sown fear of a possible nationalization of individual funds already saved, something that Boric again denied in his speech.

“To clear up any ghost, we are going to respect every peso of the pension savings accumulated in individual accounts and the possibility of Chilean men and women saving for their old age,” he added.

During the most serious moments of the pandemic, three early withdrawals of 10% of pension funds were approved in Parliament, a measure that helped the population to face the economic crisis and that involved a disbursement of more than 55,000 million dollars. for private entities that manage these monies.

For its defenders, the model has contributed significantly to the development of the national capital market and the investment of the funds, which total more than 200,000 million dollars -close to 8% of Chilean GDP-, has made it possible to finance numerous business projects.

Its detractors, however, consider that AFP investments have exclusively benefited the elites and that the system only works if you have a stable job and a high income, something unthinkable for the vast majority of workers.

Source: Elcomercio

Ronald Payne

I, Ronald Payne, am a journalist and author who dedicated his life to telling the stories that need to be said. I have over 7 years of experience as a reporter and editor, covering everything from politics to business to crime.