In essence, the proposal, approved by a great part of the opposition, establishes a social security system that seeks to take charge of the increase in longevity rates and the gap in retirement between men and women. It also plans to increase the Universal Guaranteed Pension (PGU) to 250 thousand pesos (about 248 dollars), given to people aged 65 or older and who do not receive a pension from any grant scheme.
Although the system of Pension Fund Administrators, created in 1980 during the dictatorship of Augusto Pinochet, will be maintained, public tenders will be allowed, greater competition between companies will be introduced and new players will be allowed to enter.
The new bill could benefit some 2.8 million senior citizens with an increase in pensions of between 14 and 35 percent.
According to the Minister of Labor and Social Security, Jeannette Jara, the political agreement reached between the government and the opposition is a step forward for the country because it unlocks a door that has been blocked for a decade. Among the achievements, she mentioned that the employer has to contribute to pensions, a role that had stopped being fulfilled for 43 years, the creation of social security, and the benefits to reduce inequalities in the pension system.
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