In Chile, 200,000 March Against For-Profit Pensions

July 24, 2016.

Photo: EFE

Photo: EFE

A massive demonstration of approximately 200,000 people wound its way through the streets of the Chilean capital of Santiago on Sunday, with participants calling for an end to the country’s private pension system. 

The rally was organized by trade unions and received support from the country’s secondary and post-secondary students, who have organized their own large-scale mobilizations against the government of Michelle Bachelet in recent months. Smaller rallies were also held in a dozen other cities and towns.

The Bachelet government expressed a willingness to review the country’s pension system, which is dominated by private providers known as AFPs. The system was created in 1981 during Chile’s right-wing dictatorship.

However, the government abandoned its proposal to create a state-backed public pension system, withdrawing it from Congress earlier this month.

A state-owned pension provider would have provided workers with the option of plans with lower administrative costs than the for-profit providers. Just three companies currently dominate Chile’s market for retirement plans, providing coverage to 80 percent of workers with pensions.

The pension funds, which are invested in the market and vary according to conditions, have suffered a hit with the recent slow down in the Chilean economy.

Instead of providing a public alternative, Chile’s Congress has established a bicameral commission to analyze the pension problem and propose reforms. But workers’ representatives do not expect anything significant from the lawmakers.

“We are confident that nothing will happen, because the interests that are involved, in a country where the political class is funded by big business, makes it impossible for any changes that affect their business to happen,” Esteban Maturana, a leader from the Confusam union, told El Ciudadano. Confusam is one of the main organizations behind the protests against the pension system.

Protest organizers also say the current system is wholly insufficient, as the pensions do not provide a dignified income for retirees, and that the system invariably perpetuates inequality.

Camila Rojas, the spokesperson for the Confech student union confederation, told Radio Bio Bio that the current setup cannot even be considered a social security system, but rather is a “forced savings” scheme that should be eliminated.

Workers also became indignant when news broke that Myriam Olate, an official with the country’s gendarmerie and the ex-wife of the head of the lower house of Congress, was receiving an exorbitant pension.

According to El Ciudadano, Olate receives a monthly pension of approximately US$8,450 a month, while most retired workers received an average of just US$300 a month.

Workers also faced cuts to their pensions this month when the Superintendency of Pensions announced new rates due to the fact that people now have a longer life expectancy and the funds must now be distributed over a longer period of time.

That move was criticized as being arbitrary as other studies, including one by the World Health Organization; calculate that Chileans have a lower life expectancy than that used by the Superintendency of Pensions to calculate its rates.

The organizers of Sunday’s protest called for another demonstration on August 10, and said they intend to call for a national strike on November 4.

Source: Telesur