Post by scumbuster on Dec 15, 2019 6:17:57 GMT -5
Working Past 70: Chileans Struggle to Get By on Meager Pensions
SANTIAGO – Carmen Aranguiz is 71 years old and looking for work.
She retired in 2010 but her pension is so low that she has been bouncing around from one occasional job to another to boost her income. Likewise, thousands of other Chilean retirees are struggling to get by in their later years due to a much-criticized pension system.
Last month, the average pension paid by Chile’s Pension Fund Administrators (AFPs), private entities that manage Chileans’ mandatory individual retirement accounts, was $221 for women and $384 for men.
“Every month I have to pay for the water, the electricity, the gas, food, gasoline ... and what I earn isn’t enough for all that,” Aranguiz, who earns $258 monthly, told Efe.
After contributing to her retirement plan for 20 years as a teacher at a school in Peñalolen, a suburb of Santiago, Aranguiz has been forced to work at different daycare jobs in her so-called “golden years.”
A portion of her income has evaporated due to the disruptions caused by mass anti-government protests that date back to Oct. 18 and have been described as the worst social unrest in Chile since the restoration of democracy in 1990.
But Aranguiz says she hopes the phone starts ringing at the start of a new school year in March.
Protesters have made pension reform, a topic of intense debate in recent years, one of their chief demands.
All Chilean workers are required to contribute 10 percent of their monthly salary into an individual retirement account managed by one of seven AFPs.
These private companies invest in capital markets and make hefty profits. Between January and September of 2019, their net income amounted to a combined $511 million.
The state participates in this model through a scheme known as the Pilar Solidario (Solidarity Pillar), which guarantees a basic pension regardless of the retirees’ contribution history.
Even so, eight of every 10 new Chilean pensioners are unable to cobble together a monthly retirement payout that is above the poverty line, according to a report by the Fundacion Sol think tank.
But the CEO of the AFP Association, Fernando Larrain, told Efe that the focus should not be placed on the pension fund administrators but rather on “improving the pensions.”
Increasing the pension payouts will mean “boosting saving rates, raising the age of retirement and the number of contributing workers.”
On Dec. 4, Chile’s Senate passed a bill that would gradually increase by up to 50 percent the basic monthly solidarity pension received by Chileans who have no alternative retirement income, an additional state contribution that is expected to benefit around 1.6 million retirees.
But Marco Kremerman, an economist with Fundacion Sol, said it is absolutely insufficient because it only provides relief to non-contributory retirees.
The expert said the current defined-contribution, privately managed fully-funded scheme based on individual accounts, a model established nearly 40 years ago during Gen. Augusto Pinochet’s 1973-1990 military dictatorship, has failed because it “hasn’t guaranteed dignified pensions for Chileans.”
He therefore advocates a model similar to the state-run, defined-benefit, pay-as- you-go contributive system that existed prior to 1981.
Cecilia Parraguirre, who is about to turn 68, works 45 hours a week at the telephone exchange of a hospital located in downtown Santiago.
When she retired seven years ago, she was surprised at her low monthly pension of just 170,000 pesos ($220) a month, which is around 30 percent of the salary she received as an insurance salesperson.
“I had the hope that by having a good amount of money accumulated my retirement would be decent,” Parraguirre told Efe.
But her “golden years” have been an illusion, as she went into debt due to health problems and also has been unable to pay for the university education of her two daughters.
“I’m not going to be able to keep working because of my health. I don’t know what I’m going to do then ... eat less?” Parraguirre lamented.
Aranguiz also imagined that she would enjoy a higher quality of life in her later years. “I never thought I’d be working. I imagined being surrounded by my granddaughters and friends, volunteering at some place where I could help.”
“I’ve always said I’ll work until I can’t anymore. Then I’ll have to rely on my family, but I want to be strong and dignified to the end,” she said.
www.laht.com/article.asp?ArticleId=2486809&CategoryId=14094
SANTIAGO – Carmen Aranguiz is 71 years old and looking for work.
She retired in 2010 but her pension is so low that she has been bouncing around from one occasional job to another to boost her income. Likewise, thousands of other Chilean retirees are struggling to get by in their later years due to a much-criticized pension system.
Last month, the average pension paid by Chile’s Pension Fund Administrators (AFPs), private entities that manage Chileans’ mandatory individual retirement accounts, was $221 for women and $384 for men.
“Every month I have to pay for the water, the electricity, the gas, food, gasoline ... and what I earn isn’t enough for all that,” Aranguiz, who earns $258 monthly, told Efe.
After contributing to her retirement plan for 20 years as a teacher at a school in Peñalolen, a suburb of Santiago, Aranguiz has been forced to work at different daycare jobs in her so-called “golden years.”
A portion of her income has evaporated due to the disruptions caused by mass anti-government protests that date back to Oct. 18 and have been described as the worst social unrest in Chile since the restoration of democracy in 1990.
But Aranguiz says she hopes the phone starts ringing at the start of a new school year in March.
Protesters have made pension reform, a topic of intense debate in recent years, one of their chief demands.
All Chilean workers are required to contribute 10 percent of their monthly salary into an individual retirement account managed by one of seven AFPs.
These private companies invest in capital markets and make hefty profits. Between January and September of 2019, their net income amounted to a combined $511 million.
The state participates in this model through a scheme known as the Pilar Solidario (Solidarity Pillar), which guarantees a basic pension regardless of the retirees’ contribution history.
Even so, eight of every 10 new Chilean pensioners are unable to cobble together a monthly retirement payout that is above the poverty line, according to a report by the Fundacion Sol think tank.
But the CEO of the AFP Association, Fernando Larrain, told Efe that the focus should not be placed on the pension fund administrators but rather on “improving the pensions.”
Increasing the pension payouts will mean “boosting saving rates, raising the age of retirement and the number of contributing workers.”
On Dec. 4, Chile’s Senate passed a bill that would gradually increase by up to 50 percent the basic monthly solidarity pension received by Chileans who have no alternative retirement income, an additional state contribution that is expected to benefit around 1.6 million retirees.
But Marco Kremerman, an economist with Fundacion Sol, said it is absolutely insufficient because it only provides relief to non-contributory retirees.
The expert said the current defined-contribution, privately managed fully-funded scheme based on individual accounts, a model established nearly 40 years ago during Gen. Augusto Pinochet’s 1973-1990 military dictatorship, has failed because it “hasn’t guaranteed dignified pensions for Chileans.”
He therefore advocates a model similar to the state-run, defined-benefit, pay-as- you-go contributive system that existed prior to 1981.
Cecilia Parraguirre, who is about to turn 68, works 45 hours a week at the telephone exchange of a hospital located in downtown Santiago.
When she retired seven years ago, she was surprised at her low monthly pension of just 170,000 pesos ($220) a month, which is around 30 percent of the salary she received as an insurance salesperson.
“I had the hope that by having a good amount of money accumulated my retirement would be decent,” Parraguirre told Efe.
But her “golden years” have been an illusion, as she went into debt due to health problems and also has been unable to pay for the university education of her two daughters.
“I’m not going to be able to keep working because of my health. I don’t know what I’m going to do then ... eat less?” Parraguirre lamented.
Aranguiz also imagined that she would enjoy a higher quality of life in her later years. “I never thought I’d be working. I imagined being surrounded by my granddaughters and friends, volunteering at some place where I could help.”
“I’ve always said I’ll work until I can’t anymore. Then I’ll have to rely on my family, but I want to be strong and dignified to the end,” she said.
www.laht.com/article.asp?ArticleId=2486809&CategoryId=14094