The Labor Commission approved and sent the Pension Reform bill to its Treasury counterpart on Monday night.
After an extensive day, the parliamentary group concluded the vote on the articles of the regulations, highlighting the distribution of 6% of additional contributions.
On the occasion, the indication entered by the Executive, which divides this figure into equal parts, for individual capitalization and the distribution system, was supported by eight votes in favor, four once morest and one abstention.
Thus, 3% will go to this individual capitalization with intragenerational solidarity. The other 3% will go to social security, which will allow the guarantee of 1 UF to be paid for every 10 years of contributions.
During the day, other pending issues were also approved, such as the increase of the PGU to 250 thousand pesos. This will be done on the basis of a scheme with fiscal responsibility, associated with mining collection, through the establishment of non-metallic tax taxes.
Likewise, the creation of the Integrated Pension Fund Manager, the body in charge of putting out to tender the investment portfolio to one or more entities, up to a period of 10 years, was supported.
The same occurred with pending modifications to other laws, linked to the aforementioned Integrated Fund.
Among other regulations approved by the body in previous sessions is the termination of the AFPs as they are known today, the change from the current multi-funds to generational funds, and the adjustment to life annuities.
Added to this is the Pension Information System, which will be administered by the Superintendency, as well as the self-loan figure, which allows up to one million pesos to be withdrawn from individual accounts.
The project is now being analyzed by the Finance Commission, the body that will rule on the rule, before it is seen by the court, probably next week.
A new tax?
Among the deputies of the Labor Commission who rejected the proposal, was the representative of Ñuble, Frank Sauerbaum (RN).
“The government is running the same risk that it ran in the tax reform, because it tried to rush the discussion in the House to reach an agreement in the Senate, and it did not even make it to the floor. The same might happen to the pension reform, because it did not listen to the opposition, we spent months talking, we told them that we were not available to establish a pay-as-you-go system, and although we are in favor of raising the current pensions, the government refused to increase the universal guaranteed pension to $250,000 as had been his campaign promise,” he stated.
He added: “We consider it very serious that the government makes and raises an illusion that will not be able to be fulfilled, and people believe that their pensions are going to be raised a lot, and that everyone is going to benefit, when finally with this system of distribution that the government proposes of 3%, a very minor part of the workers will benefit, and the vast majority of the middle class sectors will be harmed in the long term, because they will have to pay this benefit that the government has not wanted to take over.”
Sauerbaum highlighted that “it is misleading to say that it is a 3-3, because of the 3% that is supposed to go to your individual account, only 2.1% will, and the other 0.9% goes to a distribution account that is It is called intragenerational, that is, among those who are contributing in the same month as you. Therefore, of the 6%, the government will finally give the workers only 2.1%, harming the youngest and middle class sectors in the medium and long term,” he stated.
The UDI deputy, Cristóbal Martínez, does not share the project either. “The majority of Chileans have indicated that 6% of the additional contribution should be allocated to their individual accounts, because it is the result of their years of effort and sacrifice. Any other alternative, as proposed by the government, is to take away workers’ own savings. Unfortunately, technical opinions were excluded from this reform, and what the government is proposing is nothing more than a pay-as-you-go system that has failed in all the countries where it has been applied. We would have expected the authorities to listen more to the technicians, instead of relying on their own ideology. Here there is a desire of the majority of the workers that was not heard or respected,” he asserted.
Meanwhile, the deputy of the Social Christian Party, Sara Concha, reiterated that her party “is not going to support the 3-3, because this measure proposes taking part of the contribution from each Chilean man and woman, to hand it over to the State. Savings belong to the people and should continue that way, because it is the fruit of their effort, and it should not be given away to the state coffers.”
Beyond 6%
The ind.-DC deputy, Felipe Camaño, has a different opinion. “The 3-3 formula is being the most shared by the different political forces to unblock the 6%. But even so, there are still other important issues to unblock in the reform, so that it can be approved next week in the House of Representatives. In my opinion, the most important thing is the table of factors, since with some deputies we are promoting that the table of factors be modified and the 110 years be eliminated, which is an absurd figure, since no one lives to that age, lowering the table at 85 years of age and establishing longevity insurance for those who live over 85 years of age. In this way, we will be able to automatically raise pensions by 17%, an effective measure to raise the pensions of all Chileans,” he mentioned.
He added that “for that, we need the government to open itself to listening and give us sponsorship to improve the current pension reform, since it is not certain that it will be approved as it is. As I have mentioned, there are other issues outside of the 6% that might complicate the approval of the reform, and that it is important to resolve before the vote in the room.”
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