According to T13, deputies from the People's Party (PDG) proposed three alternatives for people who have been unemployed for more than six months to access their pension funds. The initiative reopens the debate in Congress over a fourth withdrawal from AFPs (Pension Fund Administrators).
The outlet reports that parliamentary pressure stems from unemployment, which affects close to a million Chileans. T13's report does not provide the unemployment rate or the figure for the previous period, so it is impossible to know how much unemployment has changed.
The first option is a self-loan system. It works like taking money from your own account with a commitment to repay it later. The second allows withdrawals in the event of a serious illness or a home foreclosure auction. The third is a withdrawal without repayment, similar to the three 10% withdrawals Chile approved during the pandemic.
According to T13, the lawmakers present these measures as a lifeline to ease families' financial circumstances. The outlet does not specify how much could be withdrawn or the maximum amount per person.
The proposal also faces resistance. Some political groups and experts warn that the measure would generate inflationary pressure, meaning a rise in prices. The reason is that a large amount of money would enter the economy at once. They also warn of damage to the capital market, where AFPs invest pension savings, and describe the initiative as populist.
For you, as a contributor, the most direct effect is on your pension. What you withdraw today stops earning returns during the years you have left before retirement. That is why a withdrawal without repayment reduces your final pension amount.
The government remains cautious in the face of pressure from Congress. According to T13, the executive branch is focusing on creating jobs and providing other direct aid. So far, no date has been reported for Congress to vote on the PDG proposals.
