The government set pension reform as their number one priority for March, and they have already announced that they will be able to discuss the bill that will be processed this week in the Senate. “The heart of the government’s social agenda is pensions,” said Segpres Minister Felipe Ward, who signaled the Executive’s distress by commenting that if they manage to approve the bill in March, “we are in a position to start paying these new pensions in April.”
The Coin put its foot on the accelerator for one of its flagship projects, however, not everyone agrees with the haste they carry. Despite the Government’s urgent intention to press the reform, the picture in the Senate is quite uncertain in the face of opposition. Socialist Party Senator Juan Pablo Letelier, who would chair the Senate Labor Committee from next month, spoke with irony to the strategy. “I don’t know what they smoked during the holidays,” he told La Tercera.
“70% of the pensions generated by AFPs are below the minimum wage, and 40% are below the poverty line. The Government believes that this is fixed by this pressure, in my view undue, to say that the reform must be approved in March, in order for pensions to increase in April. They don’t seem to understand anything that’s happened in these months,” the lawmaker said.
Letelier pointed out that the rush is necessary but the idea is to try to get it out before winter, not in March. “Let’s get it right and stop making announcements,” he cried.
The senator invited the government to dialogue and warned that “if we want to do something seriously, we need to address the issues we don’t want to talk about: privileges, that is, the pension system of uniformed people, and what happens with the retirement age.”
Socialist Party Senator Carlos Montes also criticized the rush and pointed out that the government has the wrong idea about what the agreements are. “They believe they have to be supported in projects and not open a dialogue,” Montes told La Segunda.
In the same vein, D.C. senator Jorge Pizarro countered that the Executive has not yet come close to talking to them and noted that the current proposal “does not guarantee a modicum of solidarity, is insufficient and does not touch the current administrators (AFP) at all”.
“If the government intends to insist on the same thing, the reform is not going to be approved in March,” Pizarro added.
“Background Changes”
For opposition lawmakers, there is still much to talk about pensions and there are even those who have already put forward proposals, such as Senator DC Ximena Rincón, who recalled that with her team they have put forward a proposal that solves the problem and in the The government has not had the intelligence to seriously analyze. “Frankly either there is no gray matter or no heart, ” he smeared.
It should be noted that Rincón’s proposal focuses on changing the calculation for scheduled retirement pensions, among other elements, by eliminating the Mortality Tables. With this, Pensions in AFPs could rise up to 79% for a 74-year-old and, to compete, insurers will need to improve their annuity offerings.
“We are not leaving the AFP industry on the same terms as the House project. We are going to make substantive changes,” added the president of the upper house, Jaime Quintana (PPD), who warned the Government that in this matter “cannot be acted on the basis of the pyrok (votes). The opposition is going to act together.”
“Not the times are there”
The president of the Party for Democracy (PPD) Heraldo Muñoz also referred to the deadlines that the government manages, the former minister of Michelle Bachelet told Emol TV that it is far more important to point to the content of the reform than to the times of the government.
“We have to worry about the pension reform fund, that there is a mixed system. I don’t know if the times are to pass it in March. That must be seen by Parliament,” he said.
Heraldo Muñoz noted that there are several outstanding issues, in addition to having a mixed social security system, noted that pensions for the middle class have to be higher and noted that there must also be a gender equity package because “it cannot be that women , simply by living longer, have the pension punishment much lower than men, because they are gaps that are explainable, some have to leave work to do unpaid activities.”
The DPP helmsman ended with the warning that senators will want “much more” than what came out of the deputies. “I’m not satisfied with what came out of the Chamber of Deputies,” he said. “There are a lot of outstanding issues and a lot of dialogue to be done,” he concluded.
