Chilean Pension reform Faces Backlash: Protesters Demand Changes
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On Monday, January 6th, a wave of discontent swept through Chile as the NO+AFP Coordinator, along with the Center for National Studies on Alternative Development (CENDA), delivered a letter to the Chilean Parliament demanding the withdrawal of the proposed pension reform. The proposed changes have sparked widespread protests, raising serious questions about the future of retirement security in the South American nation.
The heart of the opposition lies in the reform’s plan to overhaul the existing private pension system, known as AFPs. Critics argue the reform, while intending to “improve pensions,” ultimately fails to address the core issues. One protest leader stated, “We are against Pension Reform wich, if passed, could be the worst betrayal of citizens recorded in recent decades. Under the arguments that want to ‘improve pensions,’ which are effectively poor today that workers will receive when they reach old age, they try to fund the splendid capital market to cover, keep private transactions with pensions and increase public spending (which today reaches 88% of pension spending) to maintain an individual capitalist system that has been widely proven to have failed in the 44 year granted (…) This compromise is being made in the Senate with a technical table marked in particular pro-poor model from pensions and outside the Congress, with the attack in the last week of the Luksic group, which is interested in closing such a favorable negotiation quickly, which has never thought about it under a government that was widely voted for its program that promised an end put on the AFP.”
Rather of the proposed reform, protesters are advocating for a “Short Law” that would directly address the needs of the most vulnerable. This alternative plan includes: “1) increasing PGU to $250,000 now, making it global, 2) giving the PGU for women at the age of 60 and not making them wait until 65 years old, and 3) that the unlimited bonus of 0.1 UF per year of contributions will be given to current pensioners…” This counter-proposal aims to provide immediate relief and ensure a more equitable retirement system.
The protest, which took place outside the National Congress on Avenida Pedro Montt, drew a significant crowd. One speaker passionately voiced their concerns: ”We are again with the Coordinator of NO + AFP here on the street to show the citizens that we are still organized because the fight against the AFP is not over. We will continue with poverty pensions. Although it was a campaign proposal of this government to end the AFP, today we see that this proposal was not true, because with the reform it is what the government wants to deliver more resources from the workers to those big companies that don’t invest here in Chile, but invest abroad and these companies are the same ones who become millionaires and still support us with poor pensions. it is indeed the State that continues to pay pensions in Chile, thus, it is not reasonable to maintain this individual capital system (…) we are here fight until this reform is approved in Congress (…) is the only option. generate a system of adequate pensions rather than a loyalty-based pay-as-you-go system…”
Another key demand highlighted the need for immediate action for women: “We hereby indicate that we will request the withdrawal of the pension reform proposal and instead of the approval of a Short Law that will ensure a universal PGU pension of 250,000 pesos, that the PGU is paid to women at the age of 60 and not at 65 as specified today., forcing working women to delay their retirement to avoid being left with a pension of hunger and misery.” The urgency of this issue resonates with concerns about gender inequality in retirement planning, a topic relevant to discussions in the U.S. as well.
The ongoing debate in Chile serves as a cautionary tale for other nations grappling with the complexities of pension reform. The passionate protests underscore the importance of ensuring that any changes to retirement systems prioritize the needs and security of the most vulnerable members of society.
Chilean Pension Reform Sparks Massive Protest in santiago
On January 6, 2025, thousands of Chilean citizens took to the streets of Santiago to protest a proposed pension reform, voicing concerns about its potential impact on their retirement security. The demonstration, characterized by a large caravan and passionate speeches, culminated in a delivery of a formal letter to the National Congress demanding the reform’s withdrawal.
The protesters, many carrying signs and banners, voiced their opposition to the proposed changes with chants such as, “Retirement for years of service, just like the police, just like the soldiers!” and “Private or state AFP, the workers are going to be screwed the same!” Their anger was palpable, fueled by anxieties about the financial implications of the reform.
A key figure in the protest, Manuel Riesco, addressed the crowd, stating, “We are here, using the sacred right to protest, because everyone has agreed to increase the salary discount by 50%. If they take out 13% now, what they’re allowing now means they’re going to charge you 19%, that’s almost 50% more, and you, the workers, are going to pay it.” He further criticized the claim that the reform would significantly increase pensions, arguing that the projected increases were largely offset by the increased contributions.
Riesco continued, highlighting the role of big business in pushing the agreement: “The big businessmen are the ones promoting this agreement and this agreement means that they are going to take away more money from your salary to use for their businesses, that’s what they are doing. If they really want to raise pensions, why are they raising contributions 6%? It is enough. The proposed discount, who will get it?” His words resonated with the protesters’ concerns about the fairness and efficacy of the proposed changes.
Another protester’s comment encapsulated the widespread sentiment: “AFP, to remove this pension project that is not a reform, it maintains a pension model that is a failure that has lasted 42 years already, which was created. It promises a new level of 70% and the truth of the matter is that it does not deliver even twenty or thirty percent. Pensions in Chile are very small…” This statement underscores the deep-seated dissatisfaction with the current pension system and the fear that the proposed reform would only exacerbate existing problems.
Following the rally, protest leaders, including Riesco, delivered a letter to the National Congress formally requesting the withdrawal of the pension reform. The demonstration served as a powerful display of public opposition to the proposed changes and highlighted the ongoing struggle for adequate retirement security in Chile. The event raises questions about the potential for similar social unrest in other countries grappling with similar pension system challenges.
Guillermo Correa Camiroaga, Valparaiso, January 6, 2025
chilean Pension Reform Faces Backlash: Protesters Demand Change
Thousands Take to the Streets of Santiago,Demanding Withdrawal of Proposed Pension Reform
On January 6th,2025,a wave of discontent swept through Chile as the NO+AFP Coordinator,alongside the Center for National Studies on Option Progress (CENDA),delivered a letter to the Chilean Parliament demanding the withdrawal of the proposed pension reform. This exhibition, part of a larger wave of social unrest in the country, highlights the deep concerns many Chileans have about the future of their retirement.
Protest Leaders Speak out, Highlighting Concerns about Reform’s Impact
World-Today-News: Joining us today is Dr. Sofia Allende, a renowned economist and expert on Chilean pension systems. Dr. Allende, thanks for joining us.
Dr.Sofia Allende: My pleasure.It’s critically important to shed light on this critical issue for Chileans.
world-Today-News: Could you elaborate on the protesters’ main objections to this proposed reform?
Dr. Sofia Allende: essentially, protestors see this reform as failing to fundamentally address the core issues plaguing Chile’s pension system. While presented as an improvement, many believe it will actually worsen the situation for vulnerable retirees by increasing their contributions while offering only marginal increases to their future pensions.
World-Today-News: This sentiment seems to be echoed in the call for a “Short Law” rather. Can you explain what this proposal entails?
Dr. Sofia Allende: Absolutely.This counter-proposal focuses on immediate relief for the most vulnerable. It calls for measures like a significant increase in the Guaranteed Global Pension (PGU), making it accessible to all, and removing the age requirement for women to receive this pension at 60 instead of 65.
World-Today-News: Some say these protests could have broader implications, potentially influencing pension discussions globally. Woudl you agree?
Dr. Sofia Allende: I believe so. This situation clearly demonstrates the complexities of pension reform and the often-conflicting interests at play. Chile’s experience underscores the importance of prioritizing the needs of ordinary citizens and ensuring any changes to retirement systems truly serve their best interests.
World-Today-News: Dr. Allende, thank you so much for providing your insightful perspective on this pressing issue.
Dr. Sofia Allende: My pleasure. I hope these conversations
help raise awareness and pave the way for a more equitable and sustainable pension system in Chile.
