“A system where there is a complete separation between private industry that does business and the pensions people earn and the results of the pension funds. It is a tremendous lack of legitimacy, and a pension system must have legitimacy for the contributors to see that their contributions are used to have a pension that allows them to live more calmly “, assures Jara.
The Minister of Labor, Jeannette Jara, questioned this Wednesday that, despite the fact that the Administrators of the Pension Funds (AFP) had great profits during the first quarter, all the pension funds in their affiliates suffered losses.
The Secretary of State pointed out that “the AFPs had 77% more profits and all their pension funds collapsed.”
“The profits of the AFP that we saw, where in the first quarter they grew by 77%, while all the pension funds fell, is another reason to agree on a later pension reform process,” said Minister Jara.
And he added: “A system where there is a complete separation between the private industry that does business and the pensions people earn and the results of the pension funds. It is a tremendous lack of legitimacy, and a pension system must have legitimacy for the contributors to see that their contributions are used to have a pension that allows them to live more calmly”.
The Secretary of State also said that he does not believe that the right will say his position regarding the pension reform if he achieves a good result in Sunday’s election, because “more pro AFP (could not) be there.”
“More than what he already presented, where he presented guidelines rather than a proposal Chile Vamos, in which he proposed that all 6% go to individual capitals, I do not know what is left,” he said.
“The proposal in Chile Vamos was more AFP and the Republicans have not presented a proposal, there is no will to reach an agreement on pensions on the part of the Republicans,” he added.
Jara stressed that “if someone asks what can happen after this election, the first thing is that this election is to elect advisers to write the Constitution, not for the reforms; and secondly, regarding the attitude of the opposition, I don’t know who could be more pro AFP, knowing that it doesn’t work and we should wait about 40 years (for an improvement in pensions)”.
“The government does not consider forgiveness for pension debt in SMEs”
Jara also expressed his optimism on Wednesday that an agreement will be reached this week between the leaders of the unions of small and medium enterprises (SMEs) and the Ministry of Economy to unlock the readjustment of the minimum wage, although he specified that an eventual Forgiveness for pension debts in the sector is not considered by the Government.
After participating in a new meeting of the political committee in La Moneda, the Secretary of State recalls that there is an ongoing conversation between the Minister of Economy, Nicolás Grau, and PME “which not only addresses the minimum wage subsidy to accompany them in this significant increase to reach $500,000, and support 906,000 families, but also to catch up on pension debt”.
Minister Jara pointed out that the debts incurred during the pandemic as a result of the economic difficulties experienced by many SMEs “is part of the heritage of the workers. Therefore, thinking about tolerating them completely is not possible. On the contrary, it contributes as much with a payment method and reviews the forgiveness of fines, but the debt itself is not State income, it is not income from employers, it is income from workers “.
The Secretary of State emphasized that he hopes that this week the conversation will be resolved, “which is very possible, restart the legislative process on Monday of next week.”