The project seeks to allow members to withdraw up to 15% of the money accumulated in their pension savings accounts despite the fact that 12% already have a zero balance.
In recent days, the debate about a seventh withdrawal from pension funds in Chile has resurfaced strongly, especially given the similar movements observed in countries like Peru. The Peruvian Government has allowed formal workers to withdraw up to US$5,500 from their pension accounts, exacerbating the pension crisis in the country due to previous withdrawals and high labor informality.
In Chile, this debate goes beyond speculation. The independent deputy Enrique Lee presented the project for a new withdrawal on March 19, seeking that those who contribute compulsorily can access a percentage of their pension savings.
Although the proposal has already been admitted for processing, it is expected that it will only begin to be discussed during the first week of July. This, since you must wait at least a year since the sixth withdrawal project was rejected, given the similarities between the two.
It should be noted that the eventual seventh withdrawal is not the same as the AFP Self-Loan. The latter implies that the person must return the funds, while withdrawal does not imply such an obligation.
What does the project of the seventh AFP withdrawal say?
The seventh retirement bill, presented as a “constitutional reform”, aims to give the possibility to all people who are obliged to make mandatory pension contributions by law, to be able to have a direct impact on them, being able to have, at most, of an amount equivalent to 15% of the total savings accumulated in their individual capitalization accounts.
“There are people who could carry out an administration as efficient or more efficient than pension fund administrators, allowing them to positively impact their future quality of life,” said Representative Lee in the document presented in Congress.
The parliamentarian also alluded to the fact that a person could have up to 15% of their pension savings to purchase their own home. Either in addition to a housing subsidy or using it for the foot, when the acquisition is through a mortgage loan.
This “would clearly imply a positive impact, by not having to worry that, during retirement, they will have to allocate income to the payment of rental fees,” he said.
So... How much money could be withdrawn according to this project?
Assuming that a person has accumulated 10 million Chilean pesos (US$ 10,475) in their individual savings account, with this project, if it is maintained as it is, they could withdraw 1,500,000 pesos or US$ 1,571 (that is, 15% ).
As revealed by Ciedess at the beginning of this month, with data as of December 2023, with an eventual seventh withdrawal, around 4.16 million active members could be left without a balance in their accounts. This is 35.5% of the total members.
The above, taking into account that 23.8% of affiliates have a balance of just between $1 (US$ 0.00105) and $1,000,000 (US$ 1,047.5) and 12% already have a zero balance.
