Chile’s Pension Reforms in Place
By Giovanni Legorano, Global Pensions
October 2, 2008
Chile's employer-sponsored pension scheme Ahorro Previsional Voluntario Colectivo (APVC) has opened today, the Labour and Social Security Ministry has announced.
The ministry said the new provisions were mainly intended to perfect the system of individual capitalisation run by the Pension Fund Administrators (AFP).
The system would allow young workers to save “the highest possible amounts to have a good pension”, as well as improve the profitability of funds.
It also said the system would correct the pension status of women, who were, for several reasons, less protected than men and received much lower pensions.
Osvaldo Andrade, minister of labor and social security, said: “We are implementing a number of provisions which are either oriented to achieve more equality or enlarging the coverage of the pension system.”
In addition, the provisions eliminated the fixed commission that has paid to AFP previously. The ministry explained it intended to increase workers savings through this decision and, as a result, to increase pension benefits.
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