Chilean Senate approves withdrawal of 10% of pension funds

The initiative that does not have the support of the Piñera administration, was previously approved by the Chamber of Deputies.

The Chilean Senate generally approved, on Wednesday, July 22, the Bill that seeks to empower Chileans to withdraw 10% of the money deposited with the Pension Fund Administrators (AFP).

The regulation, which was celebrated throughout the Chilean territory with saucepans, would allow access to the early withdrawal of 10% of private pension amounts, with the aim of counteracting the economic crisis caused by the coronavirus pandemic.

With 29 votes in favor, 13 against and one abstention, the initiative promoted by the opposition to the government of Sebastián Piñera, is armored with a possible presidential veto, however it must return to the Lower Chamber of Deputies for a final vote. .

On July 23, the regulations must be reviewed by the Chamber of Deputies, since the addition of certain sections forces the legal initiative to return to the lower chamber, for what would be its third legislative process.

However, the project is expected to be ratified again, with the support of the majority of parliamentarians.

The initiative that was approved on July 15 by the Chamber of Deputies with 95 votes in favor, 36 against and 22 abstentions, does not have the support of the Piñera administration, which it considers to be an impediment to attacking a reform of the pension system.

For some experts, the approval of the new legal regulations is a strong political blow for the ruling party.

The current law empowers private institutions to manage the pension funds of citizens, that is, a monthly contribution of 10% of the salary of each Chilean worker. The so-called AFP’s manage the individual savings of each contributor so that they have a retirement within the period that Chilean law provides.