The pension reform once again took up Parliament’s legislative agenda. After the Chamber of Deputies approved in January – but without the essential indicators of the amendment – the pension reform promoted by the Government, it will now go to the Upper House to be discussed through the Labor Commission during the first week of March; an instance that until recently was chaired by Senator Loreto Carvajal (PPD) from Ñublensina.
The controversy arose with the approval of the legislative project delivered by the Executive from the Lower House, because this week the government again came out to debate for the “three by three” formula (3% for individual capitalization and 3% directed to a national solidarity fund), which was once proposed by former President Sebastián Piñera as a way to “remember” his legacy, as indicated by the Government spokesperson, Camila Vallejo.
However, the opposition accuses the Government of “crafty use” of the legislative amendment that the late president once proposed in March 2021 in the context of the pandemic, when the Universal Guaranteed Pension (PGU) had not yet been created.
Along these lines, parliamentarians from Chile Vamos blamed the Government for not reaching a consensus on its legislative initiatives and are firm in rejecting what they consider “an additional distribution system.” They add that the Executive wanted to dispatch the pension reform project “without thinking about the details or the real needs of the people.”
Right-wing parties seek to implement a direct individual contribution of 6% to workers, added to the rescue of at least three initiatives proposed in the latest reform project of former President Piñera (dependency insurance, loophole insurance, proposal on the inclusion of new players in the industry to encourage competition and reduce commissions). These measures, they affirm, plus the integration of the PGU (which is currently at almost $214,300 and legislation is intended to increase the total amount to $250,000), “would significantly improve the quality of life of the country’s pensioners.”
From Pilar Solidario to PGU
In March 2008, under the auspices of Law No. 20,255 and during the first administration of President Michelle Bachelet, the Pilar Solidario was born, which began to operate thanks to the Pension Reform carried out in the same year. The social protection instrument initially sought to support older adults aged 65 or over who belonged to the lowest-income 60% of the population. In addition to the above, the Child Bonus would be created, and also two instruments for the most vulnerable population: the Basic Solidarity Pension (PBS) and the Solidarity Pension Contribution (APS). Coverage at that time would grow from 40% to 60% of the lowest-income population.
The PBS benefited people who never contributed to an AFP. The APS was a complement to those who once contributed to an AFP, but whose pensions were very low. Both the PBS and the APS had an old-age version (men and women who turn 65 with PBSV and APSV) and a version for those who must retire earlier due to disability (PBSI and APSI).
14 years had to pass, so that during the second government of Sebastián Piñera, everything was renamed the Universal Guaranteed Pension (PGU), created under Law No. 21,419, during January 2022. Currently the PGU covers the most vulnerable 90% today of the population over 65 years of age, and it is a state benefit for all adults over 65 years of age, whether they are retired or not, working or not, and who are part of a family group belonging to up to 90% of the lowest income. the total population of the country. Likewise, it should be kept in mind that the PGU did not replace the benefits of the Solidarity Pillar of Disability, but it did improve its coverage and amount.
The position of local deputies
When asked about the position that their parties will have regarding the reform project, added to the possibility of extending the legislative debate in the Upper House until the month of July (as mentioned by Senator Moreira this week), deputies Frank Sauerbaum (RN) and Sara Concha (PSC) delivered their responses to La Discusión.
“In the Chamber of Deputies this project was generally voted favorably, but everything that has to do with the approval of this distribution system that the government intends to establish was rejected. In general, parliamentarians, deputies and senators alike, do not share the idea of the Executive, which is to set up a distribution system with workers’ funds and keep their property, and therefore, I believe that in the Senate That idea will not prosper either, so I would focus on things that can make a rapid improvement to the pension system,” said Sauerbaum.
“For example, from Chile Vamos we intend to increase the pension contribution so that it goes to individual accounts, as well as fight against pension gaps; Today, one of the big problems that the system has is that workers contribute for a short time and contribute little, because of the total salary we contribute only 10%, but on top of that, of our entire working life, only a very minor percentage is contributed. . On average, one works for 40 years and does not contribute beyond 12 years, therefore, it is very unfeasible in the long term to establish a system that does not have pension contributions from workers, therefore, the pension gap that exists is “What needs to be fought, that was previously fought with a loophole insurance that was called in President Piñera’s project that had been approved and is now in the Senate, therefore, we are going to insist on some of those ideas,” he exemplified.
“Also, we must greatly improve the AFP system that we have, for example, establishing a commission system that is charged only when there are profits and not when there are losses, then, we must increase competition between the AFPs by adding more actors so that there are more investors, more account managers, and that way people can choose better and have greater profitability in the long term, but as I say, I believe that the government’s idea of establishing a pay-as-you-go system will not prosper and the government “He should give up his initial project, to be able to execute concrete things for pensions quickly and not get involved in this ideological discussion that we had for 14 months here in the Chamber of Deputies,” he added.
“Here he has to sit down and talk and assume that he does not have any majority to take on his project, because it is a bad idea. Imagine that all political sectors, only the sectors closest to the government approved it, that is, the Frente Amplio, the PC and the PS, however, the vast majority of us reject it because it is simply a bad idea; then the government has to renounce that legislature and simply carry out another one that leads to a great national agreement that leads to rapid approval, but for that the Executive has to give up on that initial idea of establishing a distribution system that the workers do not they share,” the deputy decreed.
For her part, the deputy of the Social Christian Party, Sara Concha, pointed out that “I believe that it is a position that we must evaluate depending on how the proposal turns out, because the truth is it would be a bit hasty to provide an answer at this time,” she estimated. deputy.
“I consider that, for example, in the discussion some proposals appeared that could provide a good solution to the obstacle that the pension reform currently has,” he added.
“I hope that the reform can be discussed as soon as possible, as long as it is a reform that generates a positive response to what people expect to hear from this pension reform, not just a reform where most of the initial proposal presented by the Executive, since it did not generate certainty about what would happen with the pension funds, so as long as a good proposal is not generated from the Senate, it is difficult for this to move forward,” Concha remarked.
Senator Sanhueza
Senator Gustavo Sanhueza (UDI) also gave his point of view.
“Well, although this only recently reached the Senate, there was a lot of previous conversation where finally the government presented a series with at least 300 indications, and that was legislated in a week,” he said.
“I believe that we must put things in their context in the sense of being clear that the government on the one hand says it wants to talk, but in the end, this was legislated quickly without the depth or conversation necessary to reach a consensus.” ; Let us remember that they made their majority prevail in the (Lower House Labor) commission, this was voted on by chapters, it was not even voted on indication by indication and it was without discussion, at first point,” he stated.
“On a second point, we have clearly established that what we want is for that 6% contribution to go 100% to individual capitalization and nothing to a distribution system that, we believe, solidarity should be done with general taxes. , because that is true solidarity for all Chileans who do not contribute to the system, the other thing is to be supportive only with those who are contributing, so it is misleading because they are a part of Chileans who would be showing solidarity with the pensions of our adults older people, those are like the premises,” he indicated.
Text: Luciano Gallardo
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