The Congress of Chile approved a reform to the pension system, promoted by the president Gabirel Boric, which establishes social security, proposes an increase the basic pension, introduces some changes to the actors of the industry and grants compensation for quoted years and gender
Text: VOA / Reuters
The Chilean Congress on Wednesday approved a reform to the controversial private pension system, a campaign promise of the leftist president Gabriel Boric.
The adjustment to the Chilean model, based on individual capitalization of the workers already responsible for the questioned pension fund managers (AFP), is an old social demand for the low retirement it delivers.
After a long session, the Chamber of Deputies approved the last adjustment to the initiative, which has had various reform attempts in recent years.
The change establishes Social Security, proposes an increase the basic pension, introduces some changes to the actors of the industry and grants compensation for contributed years and gender.
It also sets funds for age affiliates from those in force per risk level, and establishes affiliate portfolios tenders.
In recent weeks, the Government reached an agreement with the opposition of center -right to support the project, which includes an increase in the 7 % price on behalf of employers.
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The Chilean pension system, which has been widely praised and replicated by other countries, promised solid payments when it was implemented in the early 1980s, during the dictatorship of Augusto Pinochet.
The Minister of Finance, Mario Marcel, said that at a fiscal level the adjustment is responsible, has a sustainable financial design and with periodic review mechanisms, and that it would also help savings and investment improvements that would support economic growth.
On criticism made by investors of the current AFP, the official stressed that the adjustment allows the entry to new actors to the system, including foreign signatures.
The Chilean government has recognized that the reform would cause loss of jobs due to the rise in the hiring costs of companies, but argues that the impulse that will be made to domestic savings will result in financing investment, which will support economic growth.
“With that greatest growth, jobs will be generated to largely compensate for the negative effect that inevitably has an increase in labor costs through the contribution rate on hiring,” he said to deputies.
*Journalism in Venezuela is exercised in a hostile environment for the press with dozens of legal instruments arranged for the punishment of the word, especially the laws “against hatred”, “against fascism” and “against blockade.” This content is being published taking into account the threats and limits that, consequently, have been imposed on the dissemination of information from within the country.
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