The diagnosis is clear in the country: 72 percent of pensions are lower than the minimum wage and one in four retirees receive amounts below the poverty line, a problem that is more acute among women, who are paid less due to their longer life expectancy.

The pension model in Chile was established in 1980 during the dictatorship of Augusto Pinochet and for more than 40 years the Pension Fund Administrators (AFP) have used workers’ savings to obtain millionaire profits.

After intense debates, the Government and the opposition reached an agreement which, according to the Minister of Labor, Jeannette Jara, is an important advance because it fulfills the objective of improving current pensions and raising the projections for future retirees.

The document debated in the Senate Labor Committee will benefit some 2.8 million senior citizens, with an increase in pensions of between 14 and 35 percent.

The proposal will guarantee that at the same age and with equal savings men and women will receive the same, and insurance will cover old age and disability risks.

It also provides for the creation of a Social Security Fund financed by a percentage of the employer’s contribution, which will be 8.5 percent.

However, the initiative generates criticism, especially because it does not fulfill the initial objective of putting an end to the AFPs, which have enriched themselves at the expense of the workers while providing their members with inadequate amounts.

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