January 16, 2020

Latin America’s Most Disliked President Kicks Off Pension Reform
(Bloomberg) -- President Sebastian Pinera is forging ahead with plans to overhaul Chile’s pension system as he seeks to appease mass protests that have battered the economy and sunk his approval rating to a record low.The government will send this week a bill to Congress requiring employers to contribute to workers’ individual savings accounts and also to a broader solidarity fund aimed at boosting pensions of the middle class. The proposal also increases competition among private companies, known as AFPs, that manage the savings accounts, Pinera said late on Wednesday.Pinera’s announcement comes as his approval rating plunges to an all-time low of 6% after three months of demonstrations against inequality rocked the country. Improving pensions that sometimes fall short of Chile’s $400 monthly minimum wage has emerged as a central grievance among protesters. The president’s low level of support may give him no option other than heeding those demands, according to Claudio Fuentes, a political science professor at Universidad Diego Portales.“The last survey confirms a demand for major transformations in conditions of living,” he said. “With an approval of just 6%, the government will have to side with groups that are more favorable to social reforms.”Chile’s unrest erupted in October over a proposed increase in metro fares before ballooning into a much broader social movement. The prolonged upheaval has left over 20 people dead and dealt a severe blow to economic activity.Read More: Chile’s Economy Contracts for Second Month Amid Wave of ProtestsPinera’s BrotherChile’s current pension system was designed by Pinera’s older bother, Jose Pinera, and implemented during the Augusto Pinochet dictatorship. It obliges workers to deposit 10% of their wages in the AFPs, many of which are owned by foreign groups such as U.S.-based Metlife Inc., Prudential Financial Inc., Principal Financial Group Inc., and Colombia’s Grupo de Inversiones Suramericana SA.If approved, the bill would allow both local cooperatives and nonprofit organizations to compete with those private companies. The entity in charge of the solidarity fund and also overseeing employer pension contributions would be run by the government.“The reform will be warmly welcomed by most of the population, in particular the measures aimed at increasing competition in the management of current pension funds,” economists Francisco de la Cerda and Leonardo Suarez from financial services firm LarrainVial wrote in a note to clients. They added that the bill will be well-received “in light of ill feelings of a large part of society toward AFPs.”To be sure, there was no shortage of criticism of Pinera’s proposal. One particularly contentious point of the proposal would require that AFPs pay back part of the commissions they charge in periods of negative returns.“AFPs will become very conservative with their investment strategies to avoid having very bad months,” said Jaime Achondo, head of trading at financial services firm Fynsa. “In the long run that will result in lower returns and lower savings.”Rolf Luders, an economist and former Pinochet minister, agrees that is a significant drawback of the proposal. Still, considering the months of unrest that have rattled the South American nation, he thinks it may be a relatively small concession to make.“It occurs to me that it’s the price that you have to pay in order to reach an agreement,” Luders said via email.\--With assistance from Valentina Fuentes.To contact the reporter on this story: Eduardo Thomson in Santiago at ethomson1@bloomberg.netTo contact the editors responsible for this story: Daniel Cancel at dcancel@bloomberg.net, ;Juan Pablo Spinetto at jspinetto@bloomberg.net, Matthew Malinowski, Walter BrandimarteFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Related Stories
Latest News
Top news around the world
Russo-Ukrainian War

The Russo-Ukrainian War has been ongoing between Russia and Ukraine since February 2014.

Russia's war in Ukraine has proven almost every assumption wrong, with Europe now wondering what left is safe to assume.

Around the World

Celebrity News

> Latest News in Media

Watch It
Madonna’s most bizarre TikTok and Instagram videos of 2022 | Page Six Celebrity News
December 30, 2022
Ggk_RlohXuI
Teresa Giudice and Luis Ruelas stand by sex multiple times a day: It’s ‘normal’ | Page Six
December 30, 2022
AljKbtgRGnc
Lisa Hochstein shared video confronting Lenny Hochstein & girlfriend at Miami club #shorts | PageSix
December 30, 2022
j_JVk60r6EI
'Channel 5' Creator Andrew Callaghan Talks BTS of 'This Place Rules' Documentary Feature
December 30, 2022
dJit_YG5fjg
#brendanfraser on getting jacked to play 'George of the Jungle' after 'Airheads" with #adamsandler
December 30, 2022
bkwreE4eMRQ
Selena Gomez, Ryan Gosling and Julia Fox Top the List Of Variety's Best Red Carpet Moments Of 2022
December 29, 2022
pv2A-331cLg
Wiz Khalifa Joins Neek Bucks For Upcoming 'Shot Caller' Video | TMZ
December 26, 2022
TxkRr1jj-gk
Andrew Zimmern Says TikTok Recipes Need to Stop This Holiday Season | TMZ
December 26, 2022
DdlO88KfJoY
Top 7 WTF Moments of 2022 | TMZ
December 26, 2022
3JA-5abr6A4
Most HIGHLY ANTICIPATED Movies of 2023 | E! News
January 01, 2023
3-1K1VSRjys
22 Pop Culture Moments That Defined 2022: Link in Comments! #shorts | E! News
December 31, 2022
MNnChuudoSA
Suspect Charged With Murder in Idaho College Killings | E! News
December 31, 2022
aeonRlI5xL0
TV Schedule
Late Night Show
Watch the latest shows of U.S. top comedians

Sports

Latest sport results, news, videos, interviews and comments
Latest Events
01
Jan
ENGLAND: Premier League
Tottenham Hotspur - Aston Villa
01
Jan
ENGLAND: Premier League
Nottingham Forest - Chelsea
01
Jan
ENGLAND: Championship
Coventry - Bristol City
01
Jan
ENGLAND: Championship
Blackburn - Cardiff City
01
Jan
ENGLAND: Championship
Huddersfield - Luton
01
Jan
ENGLAND: Championship
Millwall - Rotherham
01
Jan
ENGLAND: Championship
Blackpool - Sunderland
31
Dec
ENGLAND: Premier League
Manchester City - Everton
31
Dec
ENGLAND: Premier League
Wolves - Manchester United
31
Dec
ENGLAND: Premier League
Brighton - Arsenal
31
Dec
SPAIN: La Liga
Barcelona - Espanyol
31
Dec
SPAIN: La Liga
Real Sociedad - Osasuna
31
Dec
ENGLAND: Premier League
Bournemouth - Crystal Palace
31
Dec
ENGLAND: Premier League
Newcastle United - Leeds
31
Dec
ENGLAND: Premier League
Fulham - Southampton
31
Dec
SPAIN: La Liga
Villarreal - Valencia
30
Dec
SPAIN: La Liga
Real Valladolid - Real Madrid
30
Dec
ENGLAND: Premier League
Liverpool - Leicester City
30
Dec
ENGLAND: Championship
Birmingham - Hull City
30
Dec
ENGLAND: Championship
Stoke City - Burnley
30
Dec
ENGLAND: Championship
Norwich City - Reading
30
Dec
ENGLAND: Premier League
West Ham United - Brentford
30
Dec
ENGLAND: Championship
Swansea City - Watford
30
Dec
SPAIN: La Liga
Celta Vigo - Sevilla
30
Dec
SPAIN: La Liga
Cadiz - Almeria
30
Dec
SPAIN: La Liga
Getafe - Mallorca
29
Dec
SPAIN: La Liga
Atletico Madrid - Elche
29
Dec
ENGLAND: Championship
West Bromwich Albion - Preston NE
29
Dec
ENGLAND: Championship
Blackpool - Sheffield United
28
Dec
ENGLAND: Premier League
Leeds - Manchester City
27
Dec
ENGLAND: Premier League
Manchester United - Nottingham Forest
27
Dec
ENGLAND: Premier League
Chelsea - Bournemouth
26
Dec
ENGLAND: Premier League
Arsenal - West Ham United
26
Dec
ENGLAND: Premier League
Brentford - Tottenham Hotspur
26
Dec
ENGLAND: Premier League
Aston Villa - Liverpool
Find us on Instagram
at @feedimo to stay up to date with the latest.
Featured Video You Might Like
zWJ3MxW_HWA L1eLanNeZKg i1XRgbyUtOo -g9Qziqbif8 0vmRhiLHE2U JFCZUoa6MYE UfN5PCF5EUo 2PV55f3-UAg W3y9zuI_F64 -7qCxIccihU pQ9gcOoH9R8 g5MRDEXRk4k
Copyright © 2020 Feedimo. All Rights Reserved.