Borek announces pension reform and allows the state to manage the money

The change in the law had been expected in the country for 15 years and it has suffered from two failed attempts recently; The final decision will be made by the Congress, as the Chilean president’s party does not have a majority

Juan Barreto / Agence France-PresseGabriel Borek is the left-wing president of Chile

president ChileAnd the Gabriel Borekannounced this Wednesday, 2, and promised her Social Security reformWhich provides for the creation of a mixed model with an increase from 10% to 16% of the contribution to be paid by the employer and the possibility of managing funds for the state. The president explained that the affiliate marketers “will be the owners of their savings and will be able to choose freely between managers of private investors or a public investor.” Borek explained that the system consists of three pillars: Current single capitalization, which will maintain the mandatory contributions belonging to each worker; The 6% social security contributionpaid by employers; and the State contribution Through the guaranteed universal pension (PGU). The latter will be increased with this reform to 250,000 pesos (about 1,360 Brazilian reals), once the tax reform is approved by Congress. Borek announced that there will be new private investment managers with the exclusive aim of investing in pension funds, in addition, there will be a general alternative that will enhance competition with the entry of new players.

The head of state insisted that “the current pension system is in crisis” and that the current pensions “are not enough” for people “to maintain a decent life in old age, no matter how hard they work during their lifetime.” “There have already been two failed attempts in recent years and the public will not forgive another political failure,” he reiterated. Borek, who noted that this reform “has been waiting and postponed for more than 15 years”, called on parliamentarians, employers, Agence France-Presse, workers and organizations to “feed” the debate that will ultimately be decided in Congress, where his party does not have a majority.

* With information from EFE