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LatinNews Daily - 30 January 2025

In brief: Chile’s lower chamber approves pension reform

*Chile’s 155-member chamber of deputies has voted by 110 votes in favour and 38 against to approve President Gabriel Boric’s flagship pension reform. The vote by the lower chamber follows the approval the previous day by the 50-seat senate, where it passed with 40 votes in favour to seven against. The changes, which follow more than two years of discussion, now go to President Boric for promulgation, in what is a major victory for his leftist government. The reform, which the government says will allow pensions for 2.8m people to be raised, raise employer contributions from 1.5% of salaries to 8.5% over nine years – a period which can be extended by two years if tax take ends up being lower than expected. As regards the extra finance, 4.5% will be used for individuals’ saving accounts, while the remainder will be used to finance a state-run fund that would diminish gender inequality, as well as for a loan to boost existing pensions which would be transitory. The pension reform also raises the state-paid minimum guaranteed pension to Cl$250,000 (US$252), and modifies the country’s system of private pension fund administrators (AFPs), among other things.

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