The Government of Chile introduced a bill to prevent a new withdrawal of pension funds

President Gabriel Boric sent an alternative and limited project to the proposal for the fifth retirement of the Pension Fund Administrators (AFP). This was urgently admitted by the president to the Working Committee of the Chamber of Deputies.

The proposal considers social security criteria by establishing terms for members to disburse money from their pension savings. The document is far from the project presented by parliamentarians that would give direct money to contributors, but which is rejected by the Boric Government.

The government proposal establishes a year to withdraw funds for cases of delinquency in the payment of basic services, alimony debts, health debts, for the increase of savings from housing subsidies for social housing, mortgage debts and financial debts.

The proposed law does not establish a tax for withdrawing money from AFPs, as it was with previous withdrawals, of 10% of the savings from their health forecasts.

On Monday, until late at night, the president and a group of ministers met with parliamentarians from his coalition of the Broad Front, Socialist Party and Communist Party to discuss the Government's project.

Government spokeswoman Camila Vallejo said that “we have been holding these dialogues to avoid at all costs taking actions that increase the situation we are experiencing with high costs of basic inputs.”

The Government's initiative seeks to halt the proposal for the fifth recall, under discussion in the Lower House in the Constitution Committee which met on Tuesday and was attended by the Minister Secretary General of the Presidency, Giorgio Jackson, the Secretary of State for the Labour Portfolio, Jannette Jara, and the Minister of Finance, Mario Marcel.

In the instance, the minister in charge of the country's fiscal wallet said that the project means 3 billion dollars and would benefit more than 3 million people, associated with debts of different kinds.

Jackson stated that “we have said that it can be tremendously harmful to the very people who are going to withdraw funds and even more so to those who are not doing so because the cost of living rises and rises and we don't want that to continue to spread exponentially, and that is why we have presented an alternative.”

The Minister of Labor spoke at the session and explained that withdrawals will not be taxed “since what is estimated is that there is a compensation between an asset that the worker has in his pension fund versus a liability that is in a debt or belief, and therefore, there is no movement, generation of income, proper, which was a situation other than free - availability withdrawals”.

Following the session in the Working Committee of the Lower House, the Government's draft was approved by 11 votes in favor and 2 against.

From the PC bench they announced their support for the president's proposal. “We believe that this is a project that replaces the other project, so we will support,” said Communist MP Karol Cariola.

Proposals for the sixth retreat

Different parliamentarians have already announced that they will present a bill for the sixth pension withdrawal, considering that the fifth is still under discussion in the Lower House. Deputy Rubén Oyarzo, from the People's Party, said he would be looking for the signatures to present the project.

“Unfortunately, what the Executive presented is very insufficient, very focused and does not reach all Chileans. We want something more globalized,” Oyarzo said.

At the moment, we are awaiting the discussion of the draft of the fifth retreat in the Chamber of the Lower House. Likewise, the proposal noted by the Government, which must also be resolved in the chamber of the Chamber of Deputies.

KEEP READING