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Piñera presents an alternative project for the withdrawal of money from pension funds

Santiago de Chile, Apr 25 (EFE) .- The president of Chile, Sebastián Piñera, presented this Sunday an alternative project to allow the citizens of the country to withdraw a third 10% of their savings in private pension funds, in an attempt to stop a similar measure passed in Congress that seeks to help the depleted middle class during the pandemic.

“Tomorrow we will send to Congress, and with the utmost urgency, a bill for the retirement and recovery of pension savings, which allows Chileans to withdraw 10% of their savings and which solves the problems of the bill recently approved by Congress”, announced the conservative president.

Unlike the congressional initiative, the new bill includes the payment of taxes “for those contributors belonging to the 10% of the highest income in the country,” who have a taxable income of more than 1.8 million pesos (2,500 dollars).

The new text also includes a bonus of 200,000 pesos ($ 280) for the 3 million people who were left without pensions with the two previous withdrawals of funds, in July and December, in addition to a restitution system to strengthen pensions with a 1% increase in contributions by the State and the employer.

In this way, Piñera explained, “the total contribution to workers’ pension savings will increase from 10% to 12% and future pensions will improve over time by 20%.”

“I have the obligation to act with sensitivity to the needs of my compatriots, but also with responsibility,” added the Chilean president, highly criticized for rejecting the congressional initiative.


Piñera’s announcement comes after a weekend of intense negotiations with the parties that make up the ruling coalition and after the request filed by the Government before the Constitutional Court to block the congressional project, which was approved by an overwhelming majority and counted even with votes from the ruling party.

“The reform approved by Congress does not respect our Constitution and our rule of law,” said the president, who warned that five million Chileans would run out of funds if the withdrawal of the third 10% of their savings were successful with parliamentary support.

If the Constitutional Court rejected the government’s appeal, the validity of that withdrawal would depend on the promulgation of Piñera, while if it accepted the governmental request, it would be necessary to wait for the highest Chilean court to issue a final resolution.

The opposition has not yet ruled on the announcement of Piñera, who resorts to this political strategy for the second time, after having challenged the second withdrawal of pension funds in December and presenting in parallel a new text that also included the payment of taxes. by the wealthiest classes.

To date, the 11 million members of the Chilean private pension system have withdrawn more than $ 36 billion.

The opposition and part of the ruling party argue that these savings withdrawals are necessary because the 18,000 million dollars announced by the Government for social assistance are insufficient and “are not reaching the population.”

Replicated in the 1990s in much of Latin America and a pioneer in individual capitalization, the Chilean pension model is strongly questioned today due to the pyrrhic pensions it grants, compared to the multimillion-dollar profits of the private companies that manage the funds, and More and more voices are asking to move towards a more supportive model.

(c) EFE Agency

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