Pensiones in Chile: A National Challenge

Current national debate in Chile revolves around a number of distinct issues that are not only affecting the general public, but also the authorities and the private sector. Clearly, Chilean society and its traditions have undergone numerous changes in recent years. In particular, the second decade of the twenty-first century is playing host to an increasingly active and participatory public, which is more engaged than ever in issues related to the economy, security, culture, education, health and, especially, the role of the family and quality of life. The backdrop to this debate is that discussions are taking place in a country that is seeking to achieve developed-nation status.

These issues are today being debated and discussed across all sections of society, from the media, to people at work, in their homes and on the street. It is in this context that Chileans are becoming increasingly conscious about their futures, for which the importance of ensuring dignity in old age is a key part.

Probably, one of the most frequently discussed issues in recent months has been the challenge facing the pension system in meeting the needs and expectations of contributors. This is particularly the case regarding the importance of improving overall pension amounts; an area on which there appears to be widespread consensus.

In order to adequately address this issue, the promotion of dialogue between the public and private spheres is essential. Furthermore, it is crucial that this is done in a sensible yet ambitious way that seeks genuine and sustainable opportunities for long-term improvement. Despite the fundamental importance and urgency of this matter for thousands of Chileans, the process itself implies that the necessary time is duly taken to achieve an in-depth analysis and comprehensive dialogue between all the relevant stakeholders.

Today, Chile has a solid base from which to begin this work. For example, the country’s pension system has been emulated by a number of other nations around the world. Nevertheless, following 35 years of operation in an increasingly evolving Chilean society, a number of changes are still required to the system. It is, however, important not to ignore the contribution of the pension model to Chilean development and to the wider quality of life among the general public. This has been achieved primarily through the impetus the system has provided to the national capital market with the creation of savings funds totaling approximately US$173 billion; equivalent to 70% of GDP. Thanks to this injection of resources, a large number of jobs have been created and salaries have increased.

In line with the philosophy of the Chilean-American Chamber of Commerce, AmCham Chile, dialogue between the public and private sectors is fundamental, particularly when it concerns issues of public policy. As a result, The Chamber’s board has created a technical working group to analyze the situation regarding the Chilean pension system and the distinct variables that affect how it works. The aim of this working group is to devise a document detailing observations and recommendations that will be submitted to the relevant authorities in order to assist the critical process of pension reform.

Similarly, the main article of this edition of Business Chile lends support to this dialogue with a thoughtful look at the Chilean pension system, including the views of international experts in the field. We invite you to join this national dialogue, since pensions are the responsibility of each and every Chilean. As contributors to our retirement schemes, we are all owners of our savings and are responsible for ensuring our monthly payments into our individual capitalized accounts, beginning from the moment we become active in the world of employment. As a consequence, being informed is fundamental in helping the country reach a consensus on this issue.