Chilean Senate rejects fourth early withdrawal of pension funds

The Senate of Chile rejected this Tuesday to enable a new early withdrawal of pension funds; a mechanism already applied three times to mitigate the damage caused by the pandemic to the pockets of families.

The project had already been approved by the Chamber of Deputies and required the favorable vote of 25 senators but lacked one. Now it will be considered by a mixed commission made up of members of both chambers.

“The room of the Senate rejected the idea of ​​legislating the draft Constitutional reform that allows the early withdrawal of 10% of pension funds and annuities, “said the Camera it’s a statement.

The text had been approved by the Chamber of Deputies at the end of September despite opposition from the ruling party and the conservative government itself Sebastian Piñera.

Since the first partial withdrawal of pension funds was approved in July 2020, these measures were intended as an emergency economic relief given the lack of social policies of the Executive in the toughest moments of the pandemic of Covid-19.

After the rejection in the Senate, the initiative must be dealt with by a commission made up of five senators and five deputies “which should settle the differences around the initiative,” they said from the Senate.

The socialist senator José Miguel Insulza, who voted in favor, pointed out during his speech that “withdrawals may not be a good Public politics, but they are an option “for families affected by the crisis of the Covid-19.

On the side of the legislators who rejected the project, the official senator Rafael prohensHe noted: “What we are really doing is creating tremendous damage to our workers’ pensions,” he said on Twitter.

Since the middle of last year the Congress has already approved three withdrawals of 10% of the funds accumulated in individual accounts in private ones Pension Fund Administrators (AFP), criticized by Chileans for paying low pensions.

The government affirmed that this new withdrawal is not justified, because the worst of the economic crisis is over and the measure may fuel the inflation when entering circulation between 12,000 and 16,000 million dollars.

According to the most up-to-date data from the Superintendency of PensionsUntil November, close to 50,000 million dollars have been withdrawn from the AFPs among the three previous withdrawals approved as an urgent liquidity measure.

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