Chile Approves Bill for Early Retirement of Pension Funds

The Chilean Senate approved this Wednesday the bill that allows the early withdrawal of 10% of pension funds in this country, and which in previous days had been approved by the Chamber of Deputies.

Early retirement of pension funds in Chile Senate approves bill Chile passes bill for early retirement of pension funds Photo: Getty Images
The bill allowing the early withdrawal of 10% of private pension funds in Chile, to deal with the economic crisis stemming from the pandemic, took a firm step after general approval in the Senate on Wednesday night.

The regulation, promoted by the opposition to the government of the right-wing Sebastián Piñera, was approved by 29 votes in favor – including those of five senators from the ruling coalition – 13 against and one abstention. Now it must be reviewed article by article and then it will return to the Chamber of Deputies for a final vote of urgency.

The project that advanced at a safe pace in the Chilean Congress marks a historic defeat to the principles of the right in this country, where the strong economic crisis derived from the pandemic caused several deputies and senators of the Government coalition, Chile Vamos, to give a turn and they will secure the votes for approval this week.

The second process of the initiative began on Monday, July 20 in the Senate Constitution Commission.

Amid the pandemic and the delay in state initiatives to help the middle class, hit hard by the economic crisis, the early withdrawal of savings from pension funds has gained in popularity.

It may interest you: Is it feasible to withdraw part of the pension savings for the coronavirus?

Chile was a pioneer in establishing the individual capitalization system during the Augusto Pinochet dictatorship (1973-1990). In more than 30 years of democracy this was one of the pillars of the once successful Chilean model and no social democratic or socialist government promoted or supported any reform.

The latest survey by consulting firm Cadem showed that 82% of Chileans would withdraw 10% of their pension savings, despite the fact that economists have indicated that it will contribute to reducing the amount of pensions in a country where they are already very low.

The government, meanwhile, in an attempt to slow the progress of the initiative, presented in parallel a plan of measures for the middle class that includes the delivery of a bond for almost US $ 630 and a soft loan for US $ 1,900.

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Chile Approves Bill for Early Retirement of Pension Funds - /10

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The Chilean Senate approved this Wednesday the bill that allows the early withdrawal of 10% of pension funds

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