Chile pension reform will not tackle retirement age

Subject

Pension reform.

Significance

On May 22, Chile’s Chamber of Deputies voted in favour of discussing a government bill to reform the country’s pension system. The initiative would require Chilean workers to contribute more towards their own retirement as well as improving the safety net for those unable to do so.

Impacts

• If existing AFPs are barred from managing the extra 4% pension contribution, it will mark a real change to the current system.
• If the reform passes, pensioners in the poorest 60% of families will receive increased state subsidies.
• Pinera’s challenge will be to get enough support from the opposition to pass the bill without upsetting his own coalition's right wing.