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How Could Leftists Change Chile’s Pension System?

Protesters, including the ones pictured from 2019, for years have demanded changes to Chile’s pension system. // File Photo: Contramet.

Among the major changes that could emerge from a new constitution in Chile is a reform of the country’s pension system. The current constitution gives the private sector a central role in managing pensions for millions of Chileans. What will the relatively high number of independents and leftists elected to the constitutional assembly mean for the country’s pension system? What are the main problems with Chile’s current pension system, and what changes are most needed to make it function better for retirees? What role should the private sector have in the reform process?

Alfonso De Urresti, member of the Chilean Senate: “Undoubtedly, the pension system will be one of the issues that the Constitutional Convention will discuss. The main problems have more to do with the fact that it is a forced savings system that has been used as a permanent source for the capital market, rather than simply a social security system. As socialist senators have been proposing since 2018, we believe that what is needed is a new mixed pension system, with an incentive to save, but framed in a social security scheme. This would initiate a transition to a pension system transforming the current individual capitalization system into one made up of four pillars: a basic solidarity pillar, a collective solidarity capitalization pillar, an individual capitalization pillar and a voluntary savings pillar, all with intergenerational solidarity. The political conformation of the Constitutional Convention should not be a problem for the substantive discussion that allows moving toward a new system, which will undoubtedly have a state component, in which it is feasible to contemplate some…”

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Covering Latin America’s banking and insurance sectors, remittances trends and data, micro lending issues, new technologies in the industry, anti-money laundering regulations, and much more, the Inter-American Dialogue’s biweekly Financial Services Advisor, a sister publication of the Latin America Advisor, gives readers fresh insight and diverse viewpoints from financial sector leaders. To subscribe or for more information, contact Erik Brand, publisher of the Advisor, at

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Erik Brand

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Anastasia Chacón González

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