Latin America

Chile’s pension withdrawal law could expose extent of social security deficit

Withdrawal

Congress allowed Chileans to make withdrawals from individual pension funds as an emergency measure during the Covid-19 pandemic. This could spell trouble for the Piñera government. With over 360,000 confirmed cases and pushing 10,000 Covid-19 deaths, Chile has the eighth highest infection tally in the world, despite having only the 63rd highest population. In response, Congress approved a law allowing citizens to make a 10-percent withdrawal from their individual pension funds, called Pension Fund Administrators (AFPs).

The move was pushed through without the consent of right-wing President Sebastián Piñera, but was supported by the majority of Chile’s lower...

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