Protesters poured into the streets of cities across Chile on Sunday to call for a repeal of the country’s privatized pension system, which they say benefits the rich while leaving the poor with a monthly pension below the minimum wage.
Organizers said as many as 2 million people protested nationwide – more than 10 percent of the country’s population.
The march was the largest protest yet, said Carolina Espinoza, spokeswoman for the march’s organizers. “This shows that Chile is not going to stop until it regains a real pension system,” she said, according to news reports.
Chile’s pension model was first established in 1981 under the dictatorship of Gen. Augusto Pinochet. By requiring employees to set aside 10 percent of their income, it has provided a huge boost for savings, investment and growth, lifting millions out of poverty and helping transform Chile into the richest country in the region.
But the system, once copied by more than 30 countries around the world, is now heavily criticized by its own beneficiaries. While the private companies that manage the pension funds to earn disproportionately high fees, poorer Chileans receive less than $400 a month – often less than half of the income they earned during their working lives.
Critics say the problem is exacerbated by inconsistent payments and the country’s large informal economy. Women are disproportionately affected; the majority of Chilean women in retirement earn less than $235 per month in U.S. dollars – a figure less than the average retirement pension of $300, and a far cry from Chile’s monthly minimum wage ($385).
“If pensions are low overall, for women they are even more so because they either worked intermittently or simply didn’t work for pay,” Daniela Thumala, a researcher at the Center for Gerontology and Mental Health, told a Chilean radio station last year, “so the chances of social exclusion in old age are greater.”
The government of President Michelle Bachelet has offered to create a state system that would require companies to contribute 5 percent of workers’ pay to the solidarity fund, and implement measures to keep fund managers’ commissions under control. TeleSur reported that the government would announce the new reforms in a plan next month.
But protesters have called on the government to dismantle the system altogether and replace it with a public social security system funded by the government, employers and employees – a drastic move some economists warn would destroy decades of national saving and economic growth.
“(The pension system) is already a failure,” a protester told Chile’s Bio Bio TV at Sunday’s demonstration in Santiago, “and our political actors need to know that the social movements won’t stop.”