Chile's pension fund system has left the 10 million Chileans enrolled in it with extremely low retirement benefits, opponents say
Hundreds of thousands of people protested yesterday against Chile's privatised pension system, a legacy of late dictator Augusto Pinochet that opponents say is leaving many retirees destitute.
Launched in 1981, Chile's "pension fund administrators" have been held up by pro-market politicians and pundits worldwide as a model of how to privatise a national pension system. But opponents say the system has left the 10 million Chileans enrolled in it with extremely low retirement benefits - far short of the Pinochet regime's original promise of 70 per cent of workers' last paychecks, they maintain.
Waving Chilean flags and banners calling for reform, a sea of demonstrators swarmed Alameda Avenue in central Santiago, in one of the largest marches of recent years in Chile - a country that has seen a succession of major protests calling for education and labor reforms.
Organisers put the turnout in the capital at 500,000 to 600,000 people. Smaller protests were held in other cities around the South American country.
Facing pressure to overhaul the system, President Michelle Bachelet announced a package of 12 planned reforms two weeks ago. They include a universal minimum pension, cuts to fund administrators' commissions and a requirement for employers to contribute to the system for the first time, taking the total contribution from 10 to 15 percent.
The average pension is currently around $400 a month, less than the minimum wage. The private administrators manage about $170 billion. Any losses on investment are borne by the contributors.
Pinochet's dictatorship, which lasted from his 1973 military coup until 1990, remains heavy baggage for Chile.
Despite the atrocities committed by his regime, which killed an estimated 3,200 people and tortured 38,000, Chile's constitution and much of its policy framework still date to his rule.
Chile's first female president, Bachelet won a second term in 2013 promising deep reforms. But the center-left leader's popularity has since tumbled to 15 per cent amid a corruption scandal involving her son, and it is unclear whether she still has the political capital to deliver on her reform agenda.