Boric announces pension reform: State will be able to manage funds

O presidente chileno, Gabriel Boric, em encontro na Colômbia na semana passada com seu homólogo, Gustavo Petro:.
Chilean President Gabriel Boric meeting in Colombia last week with his counterpart Gustavo Petro:.| Photo: EFE/Mauricio Dueñas Castañeda
18081113The President of Chile, Gabriel Boric, announced on Wednesday (2) his promised pension reform, which provides for the creation of a mixed model with an increase of % for % of the contribution to be paid by the employer and the possibility for the State to manage the funds.1808111318081113Affiliates “will own their savings and can decide freely between managers of private investors or the public investor”, explained the president.

Boric explained that the system is made up of three pillars: the current individual capitalization, which will maintain the mandatory contributions that belong to each worker; the 6% Social Security contribution, which is paid by employers; and the contribution made by the State through the Universal Guaranteed Pension (PGU). This pension will be increased with this reform to 250 thousand pesos (about R$ 1.250) as soon as Congress passes the tax reform.

18081113″The AFPs (private pension fund administrators), in this reform, end. There will be new investment managers with the exclusive objective of investing pension funds and, in addition, there will be a public alternative, which will promote competition with the entry of new players”, declared Boric.

18081113The head of state insisted that “the current pension system is in crisis” and that current pensions “are not enough” for people “sustain a dignified life in old age, no matter how hard they have worked during their lives”.

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

Boric, who recalled that this reform “has been awaited and postponed for more than 16 years”, invited parliamentarians, employers, AFPs, workers and organizations to “feed” the debate that will end up being defined in Congress, where the ruling party does not have a majority.

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