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The private pension system, created during the country’s right-wing dictatorship, has been described as a “forced savings” scheme.
Some 150,000 people according to organizers — 50,000 according to the Chilean police — gathered in Chile’s capital Santiago yesterday in demonstrations that were replicated in dozens of cities across the country to protest against the country’s private pension system and its low payouts from an entity known as Pension Funds Administrators (AFP).
Under the slogan “No + AFP” (No more AFP) organizers brought together people of different ages, retirees and parents with their children to demonstrate their opposition to the existing model which they say they condemns the elderly to poverty.
In Valparaíso, the march ended up being dispersed with water cannons and tear gas by police, television footage showed mothers running with their children to escape the gas.
“Stop ransacking the people,” “Chile wants decent pensions for the elderly,” “We do not lack resources, we have too many thieves,” read some of the banners carreid by protesters in the main streets of Santiago.
Citizens are upset over the private pension system that has regularly paid out pensions under the minimum wage, currently set at just over US$380 a month.
The current model, which was introduced on a mandatory basis during the dictatorship of General Augusto Pinochet (1973-1990), requires workers to save 10 percent of their gross income monthly, which is accumulated in an individual account from where retirement funds are drawn. Although women can retire at age 60 and men at 65, it is not compulsary and most Chileans continue working to slightly increase their paltry pensions.
The owners of the AFP earn “thousands and millions in a few days. Meanwhile, workers, pensioners receive pensions less than 150,000 pesos (about US$230). Eighty percent of Chileans’ pensions are less than 150,000 pesos and they don’t want a change. We march to demand change, to demand a united distribution system with tripartite participation — workers, employers and the state — to ensure our pensions are like those in most countries in the world,” Mario Villanueva, leader of the “No + AFP” group said yesterday.
Constitutional reform
Last Thursday, six lawmakers from the ruling New Majority coalition submitted a constitutional reform bill to Congress asking for an end to the AFP system and its replacement with a public solidarity contribution system.
The president of Chile, Michelle Bachelet, yesterday invited citizens over 14 years old to participate actively in local assemblies which are part of the process of drafting a new Constitution to replace the current Pinochet-era one.
“It is important that everyone’s voice is included in this discussion of the country in which we want to live and how that is expressed in a new Constitution,” said Bachelet in a ceremony in Peñalolén commune in Santiago Province yesterday
The drafting of a new Constitution is one of the cornerstones of Bachelet’s political agenda, who said that the reform will be developed with the people’s participation.
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