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LatinNews Daily - 15 January 2025

In brief: Deputies in Chile propose votes on pension reform

*Deputies in Chile’s lower chamber of congress have presented constitutional reform initiatives to enable citizens to decide on the pension system. One initiative proposes the inclusion of a fourth ballot in the November 2025 presidential and parliamentary elections to ask citizens whether they consider it appropriate for pension money to continue to be managed by the Administradores de Fondos de Pensiones (AFPs), privately-run pension fund managers. Under President Gabriel Boric’s proposed pension reform, which passed the lower chamber in January 2024, albeit with some major changes, and has since stalled in the senate, AFPs would continue to exist but a public entity would take over the entire pension-related administration, such as collecting contributions and paying out pensions. This idea was proposed by representatives of the Partido Socialista (PS), Frente Amplio (FA), Partido Comunista de Chile (PCCh), and Partido por la Democracia (PPD), all government allies. The other initiative would empower Boric to call a plebiscite on the destination of the 6% additional contribution included in his reform, which proposes an extra 6% employer-paid levy to finance a state-run fund that would help low-income workers and women with their contributions to the pension system, allowing them higher withdrawals when they retire.

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