Boric's team plans to reform Chile's controversial pension program next year

Reforming the current system was one of the biggest demands demonstrators had during the 2019 protests.

A demonstrator throws a stone to a Chilean Pension Fund Administrator (AFP) building during a protest at Providencia, a wealthy neighborhood, in Santiago, Chile November 6, 2019. Photo: REUTERS/Jorge Silva/ File Photo

The Chilean government will send a long-awaited bill to reform the country’s controversial private pension system to congress next year, Finance Minister Mario Marcel said on Tuesday.

Reforming the current system, Pension Fund Administrators (AFP), was one of the biggest demands demonstrators had during the 2019 protests. One of the biggest complaints against the system is its low-paying pensions.

Leftist President Gabriel Boric proposed eliminating the private system in favor of a public one in his government plan, but Marcel refrained from specifics during a presentation before deputies. 

READ ALSO: Boric kicks off a new phase for the left in Latin American politics

The finance minister pointed out that one of the problems of the current system is the low level of contributions from workers and companies compared to other countries. When it came to the reform, he said that the government was going to start a “social dialogue” to find governing principles for a new system.

“From there we are going to work on a reform project that can reach Congress during the next year,” Marcel said.

“We don’t want this consultation process to go beyond a couple of months, because we are aware that there is a lot of anxiety to finally see a proposal on the table.”

READ ALSO: Chilean economy grows 10.2% in 2021, says Central Bank

Congress has also approved three partial withdrawals of pension savings to help households during the pandemic, and a new withdrawal is currently under discussion.

Boric’s government, which took power on March 11, has a complicated agenda filled with promises of social reforms while struggling with a sputtering economy after it registered historic growth last year.

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