Latin America

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


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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