Sebastián Piñera, President of Chile.
(CNN Spanish) -
This Sunday, the president of Chile, Sebastián Piñera, announced in a speech that his government will send to Congress on Monday its own project for the "retirement and recovery of pension savings" due to the economic and social crisis caused by the coronavirus.
The decision comes after Congress approved - with official votes included - a project for the third withdrawal of up to 10% of the pension funds promoted by the political opposition. Piñera considers, among other things, that this project "would leave more than 5 million people without any pension savings."
This project «is a better project because it takes care of the urgent needs of families to access resources, because it provides benefits to 3 million contributors who today have a 0 balance and could not have withdrawn anything, and because it establishes a mechanism to recover these pension savings withdrawn, thus strengthening future pensions, which is a solemn commitment of our government. And very importantly, this project respects our Constitution and our Rule of Law, "said Piñera from the Palacio de La Moneda.
The president explained that the amount that affiliates can withdraw will have a maximum limit of 150 UF (approximately US $ 6,100) and a minimum of 35 UF (approximately US $ 1,400), as in the opposition project, but additionally the State will give a bond for about US $ 280 to all the people who no longer have funds.
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People who belong to the highest 10% of income, meanwhile, will have to pay taxes in case of withdrawing their money.
“To recover the pension savings withdrawn and to strengthen the future pensions of all contributors who withdraw their pension savings, we have a mechanism to recover these savings through 2 contributions: first, a contribution of 1% additional to the savings of each worker at the employer's expense.
And second, another additional and complementary contribution of an additional 1% that will be financed by the State.
In this way, the total contribution to the workers' pension savings will increase from 10 to 12 points, that is to say 20% ", which means over time that pensions will also improve by 20%, explained Piñera .
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