Defraud in Pensions

International/ political

Indignant Chileans reject the system that maintains in poverty to 70% of retired

Defraud in Pensions

By: Carlos Damian                                           August 22, 2016

We will not rest until our savings let of be to the service of economic groups

México. -  Hundreds of thousands of Chileans marched on Sunday in Santiago and other 50 cities of the country to demand the end of the controverted pensions system, in a second multitudinous demonstration in less than a month, that gathered more than a million of Chilean, after that the government discarded to eliminate the current system, and on the other hand proposed to adjust it.  With slogans as " indignant Chileans" and "defrauded" the demonstrators expressed their rejection to the Administrative of Pension Funds (AFP, for their initials in Spanish), that deliver pensions very decrease to their affiliates, far away of their promise of remunerating them with 70 percent of the last salary. The individual capitalization system was established of obligatory way by the dictatorship of August Pinochet in 1981. It has been considered a model additionally countries, but the workers are complained of the weak pensions that are generated, in spite that the Afp obtain large benefits. The administrative company handle 170 billion of dollars, provided by 10 million of workers. Those resources are invested in actions or fixed revenue whose losses are assumed by they pay contribution.  After the first protest accomplished 24 of July, the chairwoman Michelle Bachelet announced 12 measures to modify the system, but not their complete dissolution to advance to a "public pensions system", as demand the Chileans in the streets. Between the measures proposed is increased in five points from the current 10 percent the quote rate with keeping to the employer. Also it outlines to strengthen the “solidary pillar", that permits the delivery of a minimal universal pension and to introduce greater regulations to the Afp, that they will have to return commissions when may have losses in the administration of the funds. The organizers warned that there will be new protests if the government no take keep in mind their demand.  Even, it began to be delineated the possibility of a national strike summoned by the Central Unitary of Workers. We call to prepare us for multiple activities and actions from here to the 4 of November, when we will have to make to feel all the force of our movement. If is not wanted us to listen, then the standstill of all the national territory will be unavoidable", warned the leadership.  The outstanding model compels to the workers to save 10 percent of their gross income each month, while large part of the retired receives in average smaller retired pension’s minimal salary (380 dollars monthly). In Santiago, thousands from families were added to the protest summoned by the Coordinators No-Afps, which from the tomorrow covered the central avenues toward the palace of government La Moneda. According to the organizers, only in the capital participated more than 300 thousand persons in rejection to the pension system that has in the misery to at least 40 percent of who peak their occupational life and to other 30 percent with income of their salaries while worked. "They are those which today we swear not to rest until achieving that our savings temporaries let of be to the service of the economic groups and that once and for all are put to the service of who are their real proprietary: the workers ", said Luis Mesina coordinator of No-Afps and directing of the banking personnel, (La Jornada, Enrique Gutierrez). After 19 years, Mexican Consar prevents that it will not have we retired worthy The Internal Revenue Service (SHCP, for their initials in Spanish) proposed to begin an opened discussion countrywide to reform the system of accounts pensions individual, due to the imminent defrauds Mexican upon promising a pension deigns, and in order to increasing the amount that will receive the workers generation that will be pensioned with the reached savings and deposited in the Administradoras de Fondos para el Retiro (Afore, for their initials in spanish). After 19 operation years of the pensions system, that in their beginning guaranteed a worthy withdrawal for the workers. The Comisión Nacional del Sistema de Ahorro para el Retiro (Consar, for their initials in spanish) it found that at the end of their occupational life, the Mexicans will not have saved what is sufficient to have a worthy retired. In the weekly report of the Treasure spokesman indicated that by the projections of the Consar is deduced that the "saving is insufficient to reach the retired that wish the Mexicans", and it said that the retirement would have to be of 70 percent the last salary. Referred that the accomplished international reforms include to increase the contribution rates and the quote years, "to incentivize" the voluntary saving and to increase the legal retired age, but it did not made  reference to the constant commissions collection of the administrative, their reduction or suspension when there are losses for the workers. The administrative has to their charge 54 million of accounts, in those which have been accumulated 2.8 billions of pesos, that equal to the 15 percent of the GDP, that through financial operations have generated net yields "in favor of the workers" by more than 1.2 billion of pesos. Estate argued that the expense for pensions of the Expenditures Budget 2016 ascended to 2 percent of the GDP, with 611 thousand 261 million of pesos or 17 percent of the programmable expense of the government, and warned that "this figure will grow quickly in the next years".  The cost of the pensions (IMSS, ISSSTE and companies of the state) will reach their maximum in 2017 and will reduce gradually, generating respect savings to the inertial stage, to disappear in 2029, according to the provisions from SHCP. Between 2001 and 2006 the amount as percentage of the annual GDP average destined pensions payment was of 1.8 percent; between 2007 and 2012 Increased to 2.4 and between 2013 and 2015 ascended to 3.1. According to this behavior, in 2013 were destined 505 thousand 690 million of pesos; in 2014, 545 thousand 345 million; in 2015, 560 thousand 309 million; in 2016, 595 thousand 807 million and of be maintained a proportion of 3.1 percent of the GDP, would reach in 2017, 633 thousand 404 million of Mexican pesos. In such a way that in the current administration the amount of pension’s payment (IMSS, ISSSTE, and companies of the state) has been equivalent to 3.1 percent of the annual GDP average. Of agreement to the document: Measures to continue encouraged the transparency in the public finances divulged by Estate.  The dependency indicates that in spite that the federal government has implemented reforms to the pension systems, from 1992 is observed an important increase in the expense of this line (of 1.7 percent of the GDP between 2000 and 2015), associated mainly with obsolescence of the population (and with the lack of creation of employment well remunerated in the formal economy). This set of reforms has encouraged the migration of allotment plans toward defined contribution plans, emphasizing between the principals: the Saving System for the Withdrawal - SAR - (1992), IMSS (1997), , Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado (2007),  PEMEX (2015), and CFE (2008,2016), strengthening thus the solvency of the public finances in the long run and restructured the expense dynamics in pensions to charge of the federal government. Furthermore, these reforms have contributed to the national development, underlines (La Jornada, economia, p. 25, August 22, 2016).