2 million people protested nationwide – more than 10 percent of the country’s population - poured into the streets of cities across Chile to call for a repeal of the country’s privatized pension system, which they say benefits the rich while leaving the poor with a monthly pension below the minimum wage. Protesters have called on the government to dismantle the system altogether and replace it with a public social security system funded by the government, employers and employees.
Chile’s pension model was first established in 1981 under the dictatorship of Gen. Augusto Pinochet. It has been described as a “forced savings” scheme. The private companies that manage the pension funds earn disproportionately high fees, but poorer Chileans receive less than $400 a month – often less than half of the income they earned during their working lives. Women are disproportionately affected; the majority of Chilean women in retirement earn less than $235 per month in U.S. dollars – a figure less than the average retirement pension of $300, and a far cry from Chile’s monthly minimum wage ($385). Just three companies currently dominate Chile's market for retirement plans, providing coverage to 80 percent of workers with pensions.
"AFPs have failed, the pensions they provide are absolutely insufficient and they will continue to deteriorate," said the organizers, according to Radio Universidad de Chile. "AFP pensions are currently on average of 125,319 pesos (US$189 a month) and 91% of pensioners receive less than 151,353 pesos... with replacement rates [percentage of the last salary received as a pension] of 40% for men and 35% for women."