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India Coronavirus: in Chile, the Assembly votes the right to draw on their retirement savings

11:10  16 july  2020
11:10  16 july  2020 Source:   rfi.fr

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Les députés d'opposition chilien célèbrent le vote de la loi concernant les cotisations retraites. © AFP Photo / Francesco Degasperi Chilean opposition deputies celebrate the vote on the law concerning pension contributions.

This is a blow to the right-wing government in Chile: the deputies adopted on Wednesday at first reading a much-debated bill on pensions. The text provides for authorizing Chileans to recover part of their mandatory retirement savings to face the economic consequences of the pandemic.

With our correspondent in Santiago de Chile, Justine Fontaine

In the middle of the afternoon and in full confinement in Santiago, the approval of the text by the deputies was greeted by concerts of horns and saucepans. It must be said that the very popular bill was adopted at first reading thanks to the vote of right-wing deputies, members of the ruling coalition. And this while the government has weighed with all its weight in recent days to encourage them to vote against the text.

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A pension system criticized

The bill, which has yet to be examined by the Senate, provides that Chileans can recover around 10% of their pension contributions accumulated since the start of their professional life. Because in Chile, the pension system, privatized under the dictatorship of General Pinochet, works by capitalization. In other words, it follows the logic of individual and compulsory retirement savings, managed by private pension funds.

A system that has been strongly criticized in the streets by Chileans for years, because the pensions finally received are very low.

The opposition justifies its vote by the too late and insufficient aid decided by the government for the poorest and the middle classes, hard hit by the economic consequences of the health crisis. The government replies that the text, if adopted definitively, would greatly weaken the Chilean pension system.

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