Thousands march against pension system in Chile

By Maria Paz Salas

SANTIAGO, Chile (AA) – Thousands of demonstrators marched here and across the country Sunday to reject the current pension system.

Police said 15,000 protesters participated in the capital, Santiago, against the private Administrators of Pensions Funds (AFP), a system that is targeted because of the modest pensions they offer in contrast to the huge profits the fund has earned. Demonstrations were held in 50 other 50 cities.

Protests were organized by the No+AFP movement that said 75,000 people participated in the nationwide protests, although organizers expected numbers close to the 1 million protesters who showed up for two previous demonstrations. They said the cold weather and intermittent rain have an effect on the turnout

The pension system was created in 1981 under the dictatorship of Augusto Pinochet and it manages benefits for about 10 million Chileans. The money is invested in equities or contributors make a fixed monthly payment. Losses are assumed by contributors.

When the AFP was created, it promised it would pay a pension equal to 70 percent of beneficiary’s last salary, but worsening economic conditions have seen benefits fall to an average monthly payment of $400 -- below the minimum wage of $420.

Demonstrations have placed the issue at the forefront of the national agenda. Following a massive protest in July, the government announced a series improvements to the system, including the creation of a state AFP.

One of them is the proposal of a bill that is going to be studied in the Congress to create a state AFP.

The leader of the movement, Luis Messina, said Sunday that it was “the beginning of the end of AFP” and urged customers to abandon the fund’s two largest managers, Cuprum and Provida.