The Government’s initiative seeks to eliminate the monopoly of the Pension Fund Insurers (AFP) and create a mixed system that allows for increased pensions, 72 percent of which are below the minimum wage, and a quarter of which are below the poverty line.

Among the relevant points of the bill that were adopted is the increase to 250 thousand pesos (about 294 dollars) of the Universal Guaranteed Pension, a benefit granted by the State for people aged 65 or over. However, the House rejected the creation of a State Pension Investor and the idea of distributing the additional six percent that employers must contribute to the retirement fund.

The Executive gave in and accepted the formula of allocating half of the money to the workers’ private accounts and the rest to a solidarity mechanism in order to increase the most precarious pensions as soon as possible.

Despite this, the right insists that the funds go to the employees’ accounts and continue to be managed by the AFPs, which for years profited from workers’ savings and provided measly pensions.

“This is not the reform that we would have liked, but it is the reform that can make pensions rise fore a majority,” Minister of Labor Jeannette Jara said.

The Minister of Finance, Mario Marcel, appreciated the progress of the initiative and said he hopes that the discussion in the Senate will be more “sensible, substantive and convergent, because that is what the country expects.”

The initiative will be reviewed by the Labor and Finance committees of the upper house before being put to a vote in the plenary session and, if approved, it will return to the chamber of deputies for a third procedure.

ef/llp/oda/car