Boric announces reform of the pension system in Chile that aims to put an end to the AFPs

President Chilean, Gabriel Boricannounced this Wednesday his fiancée pension reformwhich contemplates the creation of a mixed model with an increase in the contribution from 10 to 16% by the employer and the possibility for the State to manage the funds.

affiliates “They will be the owners of their savings and will be able to decide freely between the managers of private investors or the public investor”explained the president.

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borik He explained that the system is made up of three pillars: the current individual capitalization that will maintain the obligatory contributions that belong to each worker; the contribution from Social Security of 6% by employers; and the contribution made by the State through the Universal Guaranteed Pension (PGU).

The latter will be increased with this reform to 250,000 pesos (about 264 dollars), once Congress approves the Tax Reform.

“The AFPs (private pension fund administrators), in this reform, are finished”, Boric sentenced.

“There will be new private investment managers with the exclusive purpose of investing pension funds and, in addition, there will be a public alternative, which will allow promoting competition with the entry of new actors,” he added.

The head of state insisted that “The current pension system is in crisis” and that today’s pensions “not enough” for people “maintain a decent life in their old age, no matter how hard they worked during their lives”.

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“There have already been two failed attempts in recent years and the public will not forgive a new policy failure,” he reiterated.

borikwho recalled that this reform “has been expected and postponed for more than 15 years”, invited parliamentarians, businessmen, AFPs, workers and organizations to the discussion –“to all the actors”said- for “feed” the debate that will end up being defined in Congress, where the ruling party does not have a majority.

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.